Document:

Exhibit 10.58

 

This
Taxation Management Agreement

 

is made on 24th May 2004 between the following parties:

 

1                                        Genworth Financial, Inc
, a company
incorporated in the State of Delaware, United States of America, and having its
principal place of business at 6620 West Broad Street, Richmond, Virginia 23230

(Genworth)

 

2                                        General Electric Capital Corporation
, a company
incorporated in the State of Delaware, United States of America, and having its
principal place of business at 260 Long Ridge Road, Stamford, CT, 06927

(GECC)

 

Recitals

 

(A)                             The Board of Directors of
GE Company has determined that it is in the best interest of its subsidiaries
and shareholders to divest the Genworth Group into a separate business and to
divest a portion of its interests in the Genworth Group through a public share
offering.

 

(B)                               Pursuant to a Master Agreement dated 24
May 2004 between, inter alia, GE
Company, GECC and Genworth (the “Master Agreement”), Genworth has agreed to
acquire the outstanding shares of stock of certain subsidiaries of GE (the “Acquisition”) and will thereby become the
parent entity of the Genworth Companies..

 

(C)                               Pursuant to the US Tax Management Agreement
dated 24 May 2004 between,
inter alia, GE Company and Genworth, (the “US
TMA”), GE and Genworth have entered into an arrangement governing
the US Tax liabilities and affairs of the subsidiaries acquired under the
Acquisition.

 

(D)                              Pursuant to the Global Transition Services Agreement dated 24 May
2004 between, inter alia, GE Company
and Genworth, GE Company and its subsidiaries will provide or cause to be
provided certain administrative and support services and other assistance to
Genworth and its subsidiaries on a transitional basis and Genworth and its
subsidiaries will provide or cause to be provided certain administrative and
support services and other assistance to GE and its subsidiaries (the “Global TSA”). The GE Aust Companies
and NEW GEMICO entered into the Business Transfer Arrangements on 23 February
2004 to effect a transfer of the Business conducted by the GE Aust Companies to
NEW GEMICO, which were completed on 31 March 2004.

 

(E)                                The purpose of this Agreement is to record
the parties’ agreement with regard to the Tax liabilities and affairs of the GE
Aust Companies and Genworth Companies.

 

The
parties agree

 

in
consideration of, among other things, the mutual promises contained in this
agreement:

 

1

 

1                                        Definitions
and Interpretation

 

1.1                              Definitions

 

Act
means Corporations Act 2001 (Cth).

 

Business
means the lenders mortgage insurance business of GEMI
and GEMICO which has been  transferred
to NEW GEMICO pursuant to the Business Transfer Arrangements and the business
of GEMICO HOLDINGS.

 

Business
Day means a day on which trading banks are open for business
in Sydney other than a Saturday or Sunday;

 

Business
Transfer Arrangements means the:

 

(a)                                  GEMI Business Transfer Agreement dated 23 February 2004 between GEMI
and NEW GEMICO for the transfer of certain assets from GEMI to NEW GEMICO;

 

(b)                                 GEMICO Business Transfer Agreement dated 23 February 2004 between
GEMICO and NEW GEMICO for the transfer of certain assets from GEMICO to NEW
GEMICO; and

 

(c)                                  the Schemes,

 

which took effect on the Transfer Date.

 

Consolidated
Tax Group has the meaning set out in the Income Tax
Assessment Act.

 

GECFA
means GE Capital Finance Australasia Pty Limited ACN 070 396 020

 

GEMICO
means GE Capital Mortgage Insurance Corporation
(Australia) Pty Limited ABN 52 081 488 440.

 

GE
Company means
General Electric Company, a company incorporated in the United States of  America and having its principal place of
business at 3135 Easton Turnpike Fairfield, CT 06828

 

GE
Group means GE Company and its subsidiaries (other
than Genworth and its subsidiaries).

 

GE
Group Company means any company in the GE Group.

 

GE
Aust Companies means GEMI, GEMICO and GEMICO HOLDINGS
and GE
Aust Company means any one of them.

 

NEW
GEMICO means GE Mortgage Insurance Company Pty Limited
ABN 60 106 974 305.

 

GEMI
means GE Mortgage Insurance Pty Limited ABN 61 071 466
334.

 

GEMICO
HOLDINGS means GEMICO Holdings ABN 95 099 020 694.

 

Genworth
Companies means:

 

(a)                                  NEW GEMICO Holdings; and

 

(b)                                 NEW GEMICO;

 

and Genworth
Company means either one of them.

 

2

 

Genworth Group means
Genworth and its subsidiaries

 

Group
Liability has the meaning defined in section 721-10 of
the Income Tax Assessment Act.

 

Head
Company has the meaning set out in the Income Tax
Assessment Act.

 

Income
Tax Assessment Act means the Income Tax Assessment Act
1997 (Cth).

 

Initial
Public Offering  or IPO has the meaning specified in section
1.1 of the Master Agreement.

 

Losses
means all losses, liabilities, costs (including
without limitation reasonable legal costs), charges, expenses, actions, proceedings,
claims and damages.

 

Net
Tax Contribution Amount has the meaning set out in the
Taxation Management (Stub Period Payments) Agreement.

 

NEW
GEMICO HOLDINGS means GE Mortgage Insurance Holdings
Pty Limited ABN 89 106 972 874.

 

Public
Authority includes:

 

(a)                                  any government in any jurisdiction, whether federal, state,
territorial or local;

 

(b)                                 any minister, department, office, commission, delegate,
instrumentality, agency, board, authority or organisation of any government or
in which any government is interested;

 

(c)                                  any non-government regulatory authority;

 

(d)                                 any provider of public utility services, whether or not government
owned or controlled;

 

(e)                                  any regulatory organisation established under statute or any stock
exchange; and

 

(f)                                    judicial body or administrative body.

 

Relevant
Tax Matters means:

 

(a)                                  the preparation and filing of all Tax returns, forms or statements;

 

(b)                                 any dealings with or making of any Tax assessments;

 

(c)                                  any audit or other administrative or judicial proceedings regarding
any Taxes payable; and

 

(d)                                 any other matter that may result in any Tax liability,

 

in relation to the GE Aust Companies or the
Genworth Companies in so far as such things relate to matters where Genworth or
the Genworth Companies have agreed to indemnify or pay an amount under this
agreement.

 

Schemes
means:

 

(a)                                  a scheme pursuant to Part III Division 3A of the Insurance Act 1973
(Cth) for the transfer of the lenders mortgage insurance business of GEMI to
NEW GEMICO; and

 

(b)                                 a scheme pursuant to Part III Division 3A of the Insurance Act 1973
(Cth) for the transfer of the lenders mortgage insurance business of GEMICO to
NEW GEMICO.

 

3

 

Supplemental Payment Deed means
the agreement of the same name dated 31 March 2004 between NEW GEMICO HOLDINGS,
GECC, GEMICO and GEFA International Holdings, Inc. a corporation organised
under the laws of Delaware, providing for an additional payment from NEW GEMICO
HOLDINGS to GEMICO in respect of the transfer of the Business.

 

Taxation
Management (Stub Period Payments) Agreement means the
agreement of the same name between GECFA and NEW GEMICO, dated the same day as
this agreement.

 

Tax  includes
any tax, levy, impost, deduction, charge, rate, duty, compulsory loan or
withholding which is levied or imposed by a Public Authority, and any related
interest, penalty, charge, fee or other amount.

 

Tax
Expert means a Sydney barrister who specialises in tax
law:

 

(a)                                  as agreed between the parties; or

 

(b)                                 failing such agreement, upon application of either the Recipient or
the Payer, as nominated by the President for the time being of The NSW Bar
Association.

 

Tax Matters Agreement means the agreement dated [insert date] between GE Company, GECC, GEI, Inc. (a
Delaware Corporation), GE Financial Assurance Holdings, Inc. (a Delaware
Corporation) and Genworth.

 

2003 Tax Provision means the amount provided in respect of Tax in the annual accounts
for the GE Aust Companies and GECFA (insofar as it relates to the Business) for
the year ended 31 December 2003.

 

2004 Tax Provision means GE Group’s estimate (determined acting reasonably and as soon
as reasonably practicable after the Transfer Date) of the aggregate amount of
Tax payable by GECFA in respect of the Business for the period 1 January 2004
to the Transfer Date as if that period were an income year.

 

Transfer
Date means the “Transfer Date” as defined in the
Schemes, being 31 March 2004.

 

1.2                               Interpretation

 

Headings are for convenience only and do not
affect interpretation. The following rules of interpretation apply unless the
context requires otherwise.

 

(a)                                 The singular includes the plural and conversely.

 

(b)                                A gender includes all genders.

 

(c)                                 Where a word or phrase is defined, its other grammatical forms have
a corresponding meaning.

 

(d)                                A reference to a person includes a body corporate, an unincorporated
body or other entity and conversely.

 

(e)                                 A reference to a clause or schedule is to a clause of or schedule to
this agreement.

 

(f)                                   A reference to any party to this agreement or any other agreement or
document includes the party’s successors and permitted assigns.

 

4

 

(g)                                A reference to any agreement, deed or document is to that agreement,
deed or document as amended, novated, supplemented, varied or replaced from
time to time, except to the extent prohibited by this agreement.

 

(h)                                A reference to any legislation or to any provision of any
legislation includes any modification or re-enactment of it, any legislative
provision substituted for it and all regulations and statutory instruments
issued under it.

 

(i)                                    A reference to dollars or $ is to Australian currency.

 

(j)                                    Each schedule to this agreement forms part of the agreement.

 

(k)                                 A reference to conduct includes any omission and any statement or
undertaking, whether or not in writing.

 

(l)                                    A reference to writing includes a facsimile transmission and any
means of reproducing words in a tangible and permanently visible form.

 

(m)                              Mentioning anything after include, includes or including does not
limit what else might be included.

 

(n)                                A reference to a right or obligation of any two or more persons
confers that right, or imposes that obligation, as the case may be, jointly and
severally.

 

(o)                                No provision of this agreement will be construed adversely to a
party on the ground that the party was responsible for the preparation of this
agreement or that provision.

 

1.3                               Business Days

 

Where the day on or by which anything has to
be done under this agreement is not a Business Day, that thing must be done on
or by the preceding Business Day.

 

2                                        Indemnities

 

2.1                               GECC Indemnity

 

(a)                                 GECC indemnifies Genworth in respect of and must pay Genworth an
amount equal to any Tax payable by the Genworth Companies to the Commissioner
of Taxation:

 

(1)                                 under Division 721 of Income Tax Assessment Act in respect of a
Group Liability of GECFA that is not paid or otherwise discharged in full by
the time the liability became due and payable; and

 

(2)                                 under section 53 of the Taxation Administration Act 1953 in respect
of GST.

 

(b)                                The indemnity given by GECC under this clause 2.1 does not affect
the obligation of NEW GEMICO to pay any Net Tax Contribution Amount to GECFA
under clause 2.1 of the Taxation Management (Stub Period Payments) Agreement.

 

(c)                                 Where a Genworth Company:

 

(1)                                 receives a refund of Tax; or

 

5

 

(2)                                 pays a reduced amount of Tax as a result of the application of a
benefit or credit arising from an earlier payment of Tax,

 

and the Tax giving rise to the refund,
benefit or credit is Tax in respect of which GECC has paid an amount to
Genworth  under the indemnity given by
GECC pursuant to this clause 2.1, Genworth must procure that the relevant
Genworth Company repays to GECC, to the extent of the refund or reduced amount
of Tax, the amount paid by GECC under this clause 2.1 within 30 days of receipt
of the refund or reduced payment.

 

(d)                                GECC indemnifies Genworth in respect of and must pay Genworth an
amount equal to any stamp duty (including penalties and interest) on the
execution, delivery and performance of the Supplemental Payment Deed.

 

2.2                               Genworth Indemnity

 

(a)                                 Genworth indemnifies GECC in respect of and must pay GECC an amount
equal to:

 

(1)                                 any increases in Tax payable by the GE Aust Companies in respect of
the Business up to 31 December 2002;

 

(2)                                 any Tax payable by the GE Aust Companies and GECFA (insofar as it
relates to the Business) in respect of the carrying on of the Business in
excess of the 2003 Tax Provision; and

 

(3)                                 any Tax payable by GECFA in respect of the carrying on of the
Business in excess of the 2004 Tax Provision.

 

(b)                                For the avoidance of doubt, any reference to Tax payable by GECFA or
any GE Aust Company in respect of the carrying on of the Business in excess of
the 2004 Tax Provision (for which Genworth has given an indemnity under clause
2.2(a)(3)) does not include any Tax (including stamp duty) payable by GECFA or
any GE Aust Company in respect of the Business Transfer Arrangements or the
Supplemental Payment Deed.

 

(c)                                 Where a GE Aust Company or GECFA:

 

(1)                                 receives a refund of Tax; or

 

(2)                                 pays a reduced amount of Tax as a result of the application of a
benefit or credit arising from an earlier payment of Tax,

 

and the Tax giving rise to the refund,
benefit or credit is Tax in respect of the periods referred to in clause
2.2(a)(1), (2) or (3), GECC must pay to Genworth an amount equal to the refund
or reduced amount of Tax.

 

2.3                               Limitations on Liability

 

A party will not be liable for any Tax, Loss
or other amount under or relating to this agreement to the extent that the Loss
arose or was incurred as a result of breach of any obligation under this
agreement or the Master Agreement.

 

2.4                               Taxation Effect

 

If a payment that is required to be made by one party (the “Payer”)
to any other (the “Recipient”) under this agreement is liable
to Tax in the hands of the Recipient, or in appropriate cases an affiliate of
the Recipient, the amount payable

 

6

 

shall be increased by such amount as will leave the Recipient and the
relevant affiliate in the same net after tax position as it would have been in
had the payment not been so liable to Tax.

 

3                                        Control of Tax Matters

 

3.1                               Control by GE Group

 

(a)                                 The GE Group has sole control over:

 

(1)                                 the preparation and filing of all Tax returns, forms or statements;

 

(2)                                 any dealings with Tax assessments;

 

(3)                                 any audit or other administrative or judicial proceedings regarding
any Taxes payable; and

 

(4)                                 any other matter that may result in any Tax liability,

 

in relation to the GE Aust Companies
(including any Relevant Tax Matter).

 

(b)                                Without limiting clause 3.1(a), GECC must keep Genworth fully
informed, must consult with and must permit Genworth to participate in any
Relevant Tax Matter.

 

(c)                                 In respect of a Relevant Tax Matter, GECC  must procure that each GE Group Company must not file any Tax
returns or settle any proceedings or other matters which may result in any Tax
liability in a manner that would materially adversely affect Genworth or the Genworth
Companies without the consent of Genworth, which consent may not be
unreasonably withheld.

 

(d)                                If a GE Group Company unreasonably fails to accept any proposal by
Genworth or a Genworth Company in relation to a Relevant Tax Matter, then any
relevant amount payable by Genworth or a Genworth Company pursuant to this
agreement will be determined as if such proposal had been accepted.

 

(e)                                 If a GE Group Company otherwise acts unreasonably (or unreasonably
fails to act) in dealing with any Relevant Tax Matter, then any relevant amount
payable by Genworth or a Genworth Company pursuant to this agreement will be
reduced to the extent that the unreasonable act (or failure to act) of that GE
Group Company has increased the amount the subject of the payment.

 

3.2                               Control by Genworth

 

Except as provided in section 3.1, Genworth
will have exclusive right to control:

 

(a)                                 the preparation and filing of all Tax returns, forms or statements;

 

(b)                                any dealings with Tax assessments;

 

(c)                                 any audit or other administrative or judicial proceedings regarding
any Taxes payable; and

 

(d)                                any other matter that may result in any Tax liability,

 

of the Genworth Companies.

 

7

 

4                                        Disputes

 

If a dispute arises between the parties with respect to this agreement
and the parties are unable to reach an agreement on the matter in dispute, then
any party to the dispute may refer the dispute to the Tax Expert for
determination.

 

(a)                                 The Tax Expert shall be deemed to act as an expert and not as an
arbitrator.

 

(b)                                The Tax Expert shall have the right to call for information from any
party relevant to any determination it may be required to make.

 

(c)                                 Each of the parties shall be entitled to submit written
representations to the Tax Expert in connection with the matter or matters in
dispute.

 

(d)                                The parties shall provide to the Tax Expert all such information and
documentation as it may reasonably require.

 

(e)                                 The decision of the Tax Expert is, in the absence of manifest error,
to be conclusive and binding on the parties for the purposes of determining the
dispute and the time for any payment.

 

(f)                                   The costs and expenses in connection with the reference will be
borne by the parties in a manner determined by the Tax Expert (and either party
may request that determination) and in the absence of such a determination will
be borne by the parties to the dispute equally.

 

5                                        GST

 

(a)                                 Any reference in this clause or
otherwise in this agreement to a term defined or used in A New Tax System (Goods and Services Tax) Act 1999
is, unless the context indicates otherwise, a reference to that term as defined
or used in that Act.

 

(b)                                Any amount referred to in this
agreement which is relevant in determining a payment to be made by one of the
parties to the other is exclusive of any GST unless indicated otherwise.

 

(c)                                 If GST is payable on a supply
made under or in connection with this agreement then the consideration provided
for that supply is increased by the rate at which that GST is imposed. The
additional consideration is payable at the same time as the consideration to
which it relates.

 

(d)                                The supplier must issue a tax
invoice to the recipient of the supply at the time of payment of the GST
inclusive consideration or at such other time as the parties agree.

 

(e)                                 If one of the parties to this
agreement is entitled to be reimbursed for an expense or outgoing incurred in
connection with the agreement, then the amount of the reimbursement will be net
of any input tax credit which may be claimed by the party (or its
representative member) being reimbursed in relation to that expense or outgoing.

 

8

 

6                                        Trusts

 

6.1                               Trust of Genworth’s promises

 

GECC holds the promises given by Genworth under this agreement for
itself and also on trust for the GE Group Companies, with the intent that if
GECC refuses or fails to enforce any of those promises then any GE Group
Company may enforce them against Genworth.

 

6.2                               Trust of GECC’s  promises

 

Genworth holds the promises given by GECC
under this agreement for itself and also on trust for the subsidiaries of
Genworth, with the intent that if Genworth refuses or fails to enforce any of
those promises then any subsidiary of Genworth may enforce them against GECC.

 

7                                        Interest

 

In the event that any payment required to be
made under this agreement is made after the date on which such payment is due,
interest will accrue on the amount of such payment from (but not including) the
due date of such payment (and including) the date such payment is actually made
at the rate determined under section 12 of the Tax Matters Agreement,
compounded on a daily basis.

 

8                                        General

 

8.1                               Notices

 

(a)                                 Any notice or other communication including any request, demand,
consent or approval, to or by a party to this agreement:

 

(1)                                 must be in legible writing and in English addressed as shown below:

 

(A)                             if to Genworth

 

	
  Address:

  	
   

  	
  6620 West Broad Street,
  Richmond, Virginia

  23230

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Michael Schlessinger

  
	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
  (804) 662 7900],

  

 

(B)                               if to GECC

 

	
  Address:

  	
   

  	
  260 Long Ridge Road, Stamford,
  CT, 06927

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Richard D’Avino

  
	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
  (203) 967 5084 , and

  

 

or as specified to the sender by any party by
notice;

 

(2)                                 must be signed by the sender (if a natural person) or an officer or
under the common seal of the sender (if a corporation);

 

(3)                                 is regarded as being given by the sender and received by the
addressee:

 

9

 

(A)                             if by delivery in person, when delivered to the addressee;

 

(B)                               if by post, 3 Business Days from and including the date of postage;
or

 

(C)                               if by facsimile transmission, whether or not legibly received, when
transmitted to  the addressee,

 

but if the delivery or receipt is on a day
which is not a Business Day or is after 4.00pm (addressee’s time) it is
regarded as received at 9.00am on the following Business Day; and

 

(4)                                 can be relied upon by the addressee and the addressee is not liable
to any other person for any consequences of that reliance if the addressee
believes it to be genuine, correct and authorised by the sender.

 

(b)                                A facsimile transmission is regarded as legible unless the addressee
telephones the sender within 2 hours after transmission is received or
regarded as received under clause 8.1(a)(3) and informs the sender that it
is not legible.

 

(c)                                 In this clause 8.1, a reference to an addressee includes a
reference to an addressee’s Officers, agents or employees.

 

8.2                               Waiver

 

(a)                                 A party waives a right under this agreement only if it does so in
writing.

 

(b)                                A party does not waive a right simply because it:

 

(1)                                 fails to exercise the right;

 

(2)                                 delays exercising the right; or

 

(3)                                 only exercises part of the right.

 

(c)                                 A waiver of one breach of a term of this agreement does not operate
as a waiver of another breach of the same term or any other term.

 

8.3                               Whole agreement

 

This agreement replaces any previous
agreement, representation, warranty or understanding between the parties
concerning the subject matter and embodies the entire agreement between the
parties.

 

8.4                               Variation

 

A variation of any term of this agreement
must be in writing and signed by the parties.

 

8.5                               Further action

 

Each party must promptly sign any document or do anything else that is
necessary to give full effect to this agreement.

 

8.6                               Enforceability

 

If all or any part of a provision of this
agreement is invalid or unenforceable, it may be severed to the extent of the
invalidity or unenforceability, without affecting the validity or
enforceability of the balance of that provision or any other provision which
remains after severance.

 

10

 

8.7                               Counterparts

 

This agreement may be executed in any number
of counterparts and all counterparts, taken together, constitute one
instrument.

 

8.8                               Governing Law

 

This agreement is governed by the laws of New
York.

 

11

 

	
  Executed as an agreement:

  	
   

  
	
   

  	
   

  
	
  Signed by

  	
   

  
	
  Genworth Financial, Inc

  	
   

  
	
  by:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
    /s/ Ward E. Bobitz

  	
   

  	
   

  
	
  Authorised
  Representative

  	
   

  
	
   

  	
   

  
	
    Ward E. Bobitz

  	
   

  	
   

  
	
   

  	
  Name (please
  print)

  
	
   

  	
   

  
	
  Signed by

  	
   

  
	
  General Electric Capital Corporation

  	
   

  
	
  by:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
    /s/ James A. Parke

  	
   

  	
   

  
	
   

  	
  Authorised
  Representative

  
	
   

  	
   

  
	
    James A. Parke

  	
   

  	
   

  
	
   

  	
   

  	
  Name (please
  print)

  

 

12Exhibit
10.5

 

Execution Copy

 

 

 

AMENDED AND RESTATED AGREEMENT AND 

CONSENT TO ASSIGNMENT

 

by and among

 

WENDY’S INTERNATIONAL, INC.,

DAVCO ACQUISITION HOLDING INC.,

DAVCO RESTAURANTS, INC.

and Others

 

 

April 16, 2004

 

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  Transactions; Wendy’s
  Consent

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Certain
  Representations, Warranties and Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Control Block

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Right
  of First Refusal.

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Consent
  Required

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Expenditures;
  Limitations on Distributions and Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Noncompetition

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Purchase Option

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Control of DavCo
  Restaurants

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Letter of
  Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Certain Restaurant
  Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Additional
  Representations and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Limitations
  on Granting Liens; Indebtedness; Guaranties

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  General Release

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Modification
  of Franchise Contracts; Breach or Default

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Future Consents;
  Follow-on Offering

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Offering
  and Prospectus

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Notice

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  Limitation
  of Consent

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  Notice and
  Approvals of Third Parties

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  Reliance

  	
   

  
	
   

  	
   

  	
   

  
	
  23.

  	
  No Representations by
  Wendy’s

  	
   

  
	
   

  	
   

  	
   

  
	
  24.

  	
  Receipt
  of Circular

  	
   

  
	
   

  	
   

  	
   

  
	
  25.

  	
  Conflicts

  	
   

  
	
   

  	
   

  	
   

  
	
  26.

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  
	
  27.

  	
  Jurisdiction;
  Service of Process; Waiver of Jury Trial

  	
   

  
	
   

  	
   

  	
   

  
	
  28.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  29.

  	
  Entire
  Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  30.

  	
  Amendment;
  Waiver

  	
   

  

 

i

 

	
  31.

  	
  Binding
  Nature; Assignment; Third Party Beneficiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  32.

  	
  Joint and Several; Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  33.

  	
  Time of Essence

  	
   

  
	
   

  	
   

  	
   

  
	
  34.

  	
  Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  35.

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  36.

  	
  Legal Opinions; Deliveries

  	
   

  
	
   

  	
   

  	
   

  
	
  37.

  	
  Effectiveness

  	
   

  
	
   

  	
   

  	
   

  
	
  38.

  	
  Continuous
  Disclosure

  	
   

  
	
   

  	
   

  	
   

  
	
  39.

  	
  Limitation on
  Liability of Citicorp.

  	
   

  

 

EXHIBITS

 

	
  EXHIBIT A

  	
  -

  	
  Form of Amended and
  Restated Certificate of Incorporation of DavCo Restaurants

  
	
  EXHIBIT B

  	
  -

  	
  Form of LTIP

  
	
  EXHIBIT C

  	
  -

  	
  Form of Reinvestment
  Plan

  
	
  EXHIBIT D

  	
  -

  	
  Outstanding Obligations

  
	
  EXHIBIT E

  	
  -

  	
  Description of
  Subordinated Notes and Guarantees

  
	
  EXHIBIT F

  	
  -

  	
  Format of Standard
  Business Plan

  
	
  EXHIBIT G

  	
  -

  	
  Indebtedness and Liens

  
	
  EXHIBIT H

  	
  -

  	
  Form of General Release
  of All Claims

  
	
  EXHIBIT I

  	
  -

  	
  Forms of Legal Opinions
  to be Delivered at Signing of Amended and Restated Consent to Assignment

  
	
  EXHIBIT J

  	
  -

  	
  Forms of Legal Opinions
  to be Delivered at Transaction Closing

  

 

ii

 

AMENDED AND RESTATED AGREEMENT AND 

CONSENT TO ASSIGNMENT

 

This AMENDED AND RESTATED AGREEMENT AND CONSENT TO
ASSIGNMENT (this “Amended Consent to Assignment” or this “Agreement”)
is made in Dublin, Ohio, effective as of April 16, 2004, by and among
WENDY’S INTERNATIONAL, INC., an Ohio corporation (“Wendy’s”); DAVCO ACQUISITION
HOLDING INC., a Delaware corporation (“DavCo Restaurants”); DAVCO RESTAURANTS,
INC., a Delaware corporation (“DavCo Operations”); HARVEY ROTHSTEIN,
individually (“Rothstein”); RONALD D. KIRSTIEN, individually (“Kirstien”);
DAVID J. NORMAN, individually (“Norman”); JOSEPH F. CUNNANE, III,
individually (“Cunnane”); RICHARD H. BORCHERS, individually (“Borchers”);
HARVEY ROTHSTEIN, in his capacity as sole trustee of each of the JONATHAN
ROTHSTEIN TRUST, the PATRICK DREWS TRUST and the SEAN DREWS TRUST (individually
and collectively, the “Rothstein Trusts”); RONALD D.
KIRSTIEN, in his capacity as sole trustee of the KIRSTIEN FAMILY TRUST (the “Kirstien
Trust” and collectively with the Rothstein Trusts, the “Trusts”);
and CITICORP VENTURE CAPITAL, LTD., a New York corporation (“Citicorp”).

 

R E C I T A L S

 

A.                                   DavCo
Operations and DavCo Restaurants (individually and collectively, the “Franchisees”)
and Wendy’s are parties to the Restaurant Franchise Agreement dated
October 20, 1993 for the franchise and licensed rights to the Wendy’s Old
Fashioned Hamburgers Restaurant located at 1433 Tappahannock Blvd.,
Tappahannock, Virginia (the “Restaurant Franchise Agreement”).

 

B.                                     Wendy’s
and the Franchisees (or Franchisees’ predecessors) are parties to Development
Agreements dated June 19, 1978, which were combined into a single
development agreement by an Addendum Agreement dated November 14, 1980,
and which were amended by an Agreement and Consent to Assignment dated
December 4, 1987; an Agreement and Consent to Recapitalization dated
February 10, 1993; a Consent and Waiver Agreement dated August 3,
1993; an Agreement and Consent to Merger dated September 26, 1994; a
Letter of Intent dated April 28, 1997; an Agreement entered into as of
January 7, 1998; and a Modification Agreement dated October 30, 2000
(all of which are hereinafter individually and collectively referred to as the
“Development
Agreement”), for the developmental rights within the franchised area
of the City of Baltimore, Maryland; Anne Arundel, Baltimore, Calvert, Caroline,
Carroll, Cecil, Charles, Dorcester, Frederick, Harford, Howard, Kent,
Montgomery, Prince Georges, Queen Annes, St. Marys, Talbot, Washington,
Wicomico and Worcester Counties, Maryland; the District of Columbia; and
Arlington, Fairfax, Loudoun, Prince William and Stafford Counties, Virginia
(collectively, the “Territory”).

 

C.                                     Pursuant
to the terms of the Development Agreement, unit franchise agreements were
executed for the 152 Wendy’s Old Fashioned Hamburgers Restaurants (the “Unit
Franchise Agreements”) opened under the Development Agreement.

 

 

D.                                    The
Restaurant Franchise Agreement, the Unit Franchise Agreements, the Development
Agreement and the Waiver Agreement dated as of April 27, 1999, and any and
all amendments and modifications to any of said agreements made prior to
August 13, 2003 (the “Initial Consent Date”), are hereinafter
individually and collectively referred to as the “Existing Franchise Agreements.”

 

E.                                      All
of the Wendy’s Old Fashioned Hamburgers Restaurants referenced above (including
all such restaurants opened after the Initial Consent Date pursuant to the
Performance Schedule of the Development Letter, as hereinafter defined)
are hereinafter individually and collectively referred to as the “Restaurants.”

 

F.                                      As
of the Initial Consent Date and as of the date hereof, (i) all of
the outstanding capital stock of DavCo Restaurants is owned by Rothstein,
Kirstien, Norman, Cunnane and Borchers (collectively, the “Current Principals”), the
Trusts, Citicorp, together with Byron L. Knief and certain other employees (and
their wholly-owned subsidiaries) and affiliates of Citicorp (Citicorp, Byron L.
Knief and such other employees, subsidiaries and affiliates, individually and
collectively, “CVC”), and certain de minimus amounts are held by other
current management of DavCo Operations, and (ii) all of the
outstanding capital stock of DavCo Operations is owned by DavCo Restaurants.

 

G.                                     In
connection with certain transactions previously contemplated and proposed by
the DavCo Parties (as hereinafter defined) involving a restructuring and
conversion of DavCo Restaurants and DavCo Operations into a Canadian income
fund trust structure and an offering in Canada of units of such fund (the “Income Fund
Transaction”), Wendy’s and the DavCo Parties (and CCT PARTNERS V,
L.P., a Delaware limited partnership (“CCT”)) entered into an Agreement and
Consent to Assignment dated August 13, 2003 (the “Initial Consent”) pursuant to
which, among other things, Wendy’s consented to the Income Fund Transaction, on
the terms and subject to the conditions contained in the Initial Consent.

 

H.                                    In
connection with the Initial Consent, on the Initial Consent Date, Wendy’s and
the Franchisees entered into the following agreements, each in the form
attached to the Initial Consent and each dated as of the Initial Consent
Date:  (i) the Wendy’s new
Unit Franchise Agreement (collectively referred to as the “New Franchise Agreements”)
for each Restaurant existing at the Initial Consent Date (and which will be
entered into for each Restaurant to be opened pursuant to the Performance
Schedule of the Development Letter), (ii) a Development Letter
(the “Development
Letter”), and (iii) the Franchise Addendum Agreement
(the “Addendum”)
(the New Franchise Agreements, the Development Letter and the Addendum
individually and collectively hereinafter referred to as the “Franchise
Contracts”).

 

I.                                         It
was the intent and agreement of Wendy’s and the Franchisees that, from and
after the Initial Consent Date, whether or not the Income Fund Transaction
actually occurred, the Franchise Contracts and the applicable provisions of the
Initial Consent would govern all of the rights and obligations of the
Franchisees with respect to the franchise and licensed rights pertaining to the
Restaurants and the development rights described in the Recitals hereto, and,
therefore, effective as of the Initial Consent Date, the Franchise Contracts
and the applicable provisions of the Initial Consent replaced the Existing
Franchise Agreements in their entirety,

 

2

 

except as otherwise
specifically provided in the Franchise Contracts, in the Initial Consent or,
following the date hereof, herein.

 

J.                                        The
Income Fund Transaction was not consummated and, in lieu thereof, the DavCo
Parties have now proposed to enter into and effectuate the transactions
described in Section 1.A hereof and,  pursuant to the terms of the Franchise
Contracts and the Initial Consent, the Franchisees have requested Wendy’s
consent to and waiver of any rights of first refusal or option to purchase with
respect to such transactions.

 

K.                                    In
order to induce Wendy’s to grant such consent and waiver, DavCo Operations,
DavCo Restaurants, the Current Principals, the Trusts and Citicorp
(collectively, the “DavCo Parties”), each of whom or which will
benefit from the consent and agreements set forth herein, are willing to agree
to the terms and conditions contained herein.

 

L.                                      Wendy’s
is willing to grant its consent to and waiver with respect to the transactions
described in Section 1.A hereof, on and subject to the terms and
conditions contained herein.

 

M.                                 Accordingly,
Wendy’s and the DavCo Parties desire to amend and restate the Initial Consent
in its entirety, on the terms and subject to the conditions contained herein.

 

NOW, THEREFORE, in consideration of the
premises and the respective covenants, agreements and promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties, the parties hereto, intending to be
legally bound, hereby amend and restate the Initial Consent and agree as
follows:

 

1.                                       Transactions; Wendy’s Consent.

 

A.                                   The
DavCo Parties hereby propose to enter into and effectuate the following
transactions (collectively, the “Transactions”):  (i)  the issuance of up to 14,000,000 shares of Class
A Common Stock, par value $.01 per share, of DavCo Restaurants (the “Class A
Common Stock”) and up to $125,000,000 aggregate principal amount of
up to 13% senior subordinated notes due 2016 of DavCo Restaurants (the “Subordinated
Notes”), of which all of such shares of Class A Common Stock and up
to approximately seventy-five percent (75%) of such aggregate principal amount
of the Subordinated Notes together will form up to 14,000,000 enhanced income
securities (“EISs”) to be offered to the public in the United States,
together with up to approximately twenty-five percent (25%) of such aggregate
principal amount of the Subordinated Notes to be offered to the public
separately from the EISs, all in an initial public offering pursuant to a
Registration Statement on Form S-1 (and related prospectus) to be filed
with the Securities and Exchange Commission (the “Offering”) and such EISs to
be listed and traded on the American Stock Exchange; (ii) the
issuance immediately prior to the closing of the Offering of up to 2,800,000
shares of Class B Common Stock, par value $.01 per share,  of DavCo Restaurants (the “Class B
Common Stock,” and together with the Class A Common Stock, the “Common
Stock”) to

 

3

 

the Current Principals,
the Trusts and CVC in exchange for all of their existing shares of common stock
(of all classes) of DavCo Restaurants and all accrued and unpaid dividends
thereon (the “Recapitalization”), and the subsequent issuances to the
Current Principals, the Trusts and CVC of EISs (consisting of shares of Class A
Common Stock and Subordinated Notes) upon the exchange by them of shares of
Class B Common Stock for EISs (provided that such exchange does not result in a
violation of Section 3.A); (iii) the unsecured guaranty by
DavCo Operations of the Subordinated Notes and the obligations under the Note
Indenture (as hereinafter defined), subject to the restrictions contained
herein with respect to such guaranty and Note Indenture; (iv) the
borrowing by DavCo Operations from third party lenders on a senior secured
basis of up to $20,000,000 in principal amount under a three-year revolving
credit line with a floating interest rate of LIBOR plus 1.5% (the “Senior
Credit Facility”) to pay existing debt, fund capital expenditures
and for working capital purposes, and the senior secured guaranty (the “Senior
Credit Agreement Guarantee”) by DavCo Restaurants of such borrowings
and related obligations under a senior credit agreement (the “Senior
Credit Agreement”) governing such borrowings; (v) the
grant by DavCo Operations of a first priority security interest in some of its
assets to secure its obligations under the Senior Credit Agreement and the
grant by DavCo Restaurants of a first priority interest in some of its assets
to secure its obligations under the senior secured guaranty referred to in
clause (iv) above, subject, in each case, to the restrictions contained herein
with respect to the granting of such security interests; (vi) the
repurchase by DavCo Restaurants of shares of the Class B Common Stock to be
held by CVC with cash on hand and a portion of the proceeds of the Offering;
and (vii) the continued ownership by DavCo Restaurants of all of
the outstanding equity interests in DavCo Operations.  If the Offering occurs, prior to the closing thereof, DavCo
Restaurants will change its name to “DavCo Restaurants Inc.” and DavCo
Operations will change its name to “DavCo Operations Inc.”  As used herein, “Transaction Closing” means
the closing of the sale to the underwriters of EISs in the Offering (without
regard to any subsequent sales pursuant to an over-allotment option).

 

B.                                     Effective
as of the Transaction Closing, Wendy’s hereby consents to the Transactions as
described in Section 1.A and waives any right of first refusal in respect
of, and any option to purchase, any shares of capital stock or assets of DavCo
Operations or DavCo Restaurants in connection with the consummation of the
Transactions as described in Section 1.A; provided, however,
that the foregoing consent of Wendy’s is subject to and conditioned upon the
terms and conditions hereof, including each of the following:

 

(1)                                  the
compliance by the DavCo Parties with all of their obligations under this
Amended Consent to Assignment that are required to be satisfied prior to or contemporaneously
with the closing of the Offering and the consummation of the Transactions;

 

4

 

(2)                                  the
delivery to Wendy’s immediately prior to the Transaction Closing of a
certificate executed by each of the DavCo Parties certifying to Wendy’s that
each of the representations, warranties and agreements of the DavCo Parties
contained herein were true and correct as of the date hereof and are true and
correct as of the Transaction Closing and that each of the covenants,
obligations and conditions to be performed or satisfied by any of the DavCo
Parties prior to the Transaction Closing has been performed or satisfied in
full (which certificate shall specifically certify the actual amounts of the
following:  the number of EISs to be
issued in the Offering, the aggregate principal amount of the Subordinated
Notes, the interest rate applicable thereto, and the equity capitalization of
DavCo Restaurants, all as of the Transaction Closing, and such actual amounts
of EISs, principal and interest rate of the Subordinated Notes and equity
capitalization of DavCo Restaurants shall be as described in Section 1.A
and Section 2.B(3));

 

(3)                                  each
of the Amended and Restated Certificate of Incorporation of DavCo Restaurants,
in the form to be filed as of the Transaction Closing, the Stockholders
Agreement, the Note Indenture and the Guaranty (as each such term is
hereinafter defined), each in the form to be entered into as of the Transaction
Closing, shall have been reviewed and consented to by Wendy’s pursuant to the
provisions of Section 2.B(3) and Section 2.M,  respectively;

 

(4)                                  prior
to or contemporaneously with the Transaction Closing, Leasehold Mortgages (as
hereinafter defined) satisfying the requirements of Section 2.O shall have
been recorded and the title insurance policies, landlord waivers and all other
requirements of Section 2.O shall have been complied with, all to the
satisfaction of Wendy’s; provided, however, that Franchisees
shall have thirty (30) days following the Transaction Closing to cause to be
released any prior encumbrances against the leasehold interests that are
subject to the Leasehold Mortgages; and

 

(5)                                  the
provisions of Section 37 hereof.

 

2.                                       Certain Representations, Warranties and
Covenants.  The waiver
and consent of Wendy’s to the Transactions is subject to, and given in reliance
upon, the following terms, conditions, agreements, representations and
warranties:

 

A.                                   Franchisees
warrant, represent and agree that no change in the current structure or ownership
of Franchisees shall occur unless all of the Transactions are consummated as
described in Section 1.A hereof. 
Franchisees further warrant, represent and agree that the description of
the Transactions set forth in Section 1.A hereof is a complete and
accurate description of the corporate restructuring and other transactions
being undertaken by DavCo Operations and DavCo Restaurants in connection with
the Offering and that the structure and

 

5

 

ownership of each of the
Franchisees following the Transaction Closing shall remain as set forth in
Section 1.A hereof except as otherwise permitted hereby.

 

B.                                     (1)                                  Franchisees
warrant, represent and confirm that Franchisees were, as of the Initial Consent
Date, are, as of the date hereof, and will be as of the Transaction Closing, (i) duly-organized,
validly existing and in good standing under the laws of the State of Delaware,
and duly authorized to do business and in good standing in the States of
Maryland and Virginia, and the District of Columbia and (ii)  in
compliance with all applicable laws and regulations.

 

(2)                                  Franchisees
warrant, represent and confirm that all of the equity interests in each of
DavCo Restaurants and DavCo Operations were, as of the Initial Consent Date,
and are, as of the date hereof, owned as set forth in Recital F.

 

(3)                                  (i)                                     Franchisees
warrant, represent and confirm that as of and following the Transaction
Closing, except to the extent otherwise provided herein, including as shall be
required to effect a Follow-on Offering (as defined in Section 17.B(1)
hereof), (i) the authorized capital stock of DavCo Restaurants
shall consist solely of (A) up to 16,800,000 shares of Class A Common
Stock, to be held pursuant to the Offering and any Follow-on Offering,
(B) up to 2,800,000 shares of Class B Common Stock, to be held by the
Current Principals, the Trusts and CVC, (C) up to 10,000,000 shares of
Class C Common Stock, par value $.01 per share (the “Class C Common Stock”), none
of which shall be issued and outstanding as of the Transaction Closing (or
thereafter without Wendy’s prior written consent) and (D) up to 1,000,000
shares of preferred stock, par value $.01 per share (the “Preferred Stock”), none of
which shares shall be issued and outstanding as of the Transaction Closing (or
thereafter without Wendy’s prior written consent); and (ii) the
authorized capital stock of DavCo Operations shall consist solely of shares of
common stock, all of which shall be issued to and held by DavCo Restaurants;
and no other capital stock of DavCo Restaurants or DavCo Operations shall be
issued or outstanding.  Except as
provided in the preceding sentence, neither DavCo Restaurants nor DavCo
Operations shall, as of and following the Transaction Closing, except to the
extent otherwise provided herein (including the over-allotment option described
in Section 4.A(y)), have any other authorized or outstanding capital
stock, equity interests, warrants or options to acquire any capital stock or
equity interests or securities convertible into any of the foregoing (other
than the DavCo Restaurants Long-Term Incentive Plan (the “LTIP”) and the DavCo
Restaurants Dividend Reinvestment Plan (the “Reinvestment Plan”)).  Shares of Class B

 

6

 

Common Stock will
be exchangeable for EISs on the basis to be set forth in the Stockholders
Agreement and are otherwise not exchangeable or convertible.  Each share of Common Stock is entitled to
one vote and the shares of Common Stock vote together as a single class, except
to the extent that class voting is required by law.  The shares of Class B Common Stock outstanding on the Transaction
Closing and held by the Control Block Principals (as hereinafter defined) shall
represent not less than a ten percent (10%) interest in the total economic
value of the total outstanding equity interests, and not less than a ten
percent (10%) interest in the total outstanding voting interests, in DavCo
Restaurants (in each case on a fully-diluted basis).  The Recapitalization will be approved prior to the effectiveness
thereof by all of the stockholders of DavCo Restaurants.

 

(ii)                                  As
of the Transaction Closing, DavCo Restaurants shall have filed with the
Delaware Secretary of State its Amended and Restated Certificate of
Incorporation in the form attached hereto as Exhibit A, with
all blanks therein completed in a manner consistent herewith, provided that any
changes or modifications to the Amended and Restated Certificate of
Incorporation in the form attached hereto as Exhibit A
proposed to be made prior to the Transaction Closing shall require the prior
written consent of Wendy’s, which shall not be unreasonably withheld.  DavCo Restaurants shall furnish to Wendy’s
copies of any such proposed modifications or changes as promptly as practicable
following the date hereof and Wendy’s shall review and respond thereto as
promptly as practicable and, with respect to the final version of the Amended
and Restated Certificate of Incorporation, not later than two (2) business days
following Wendy’s receipt thereof pursuant to delivery thereof given in
accordance with Section 17.B(6), provided that DavCo Restaurants has
indicated in writing to Wendy’s that such version is the final version thereof.  Following the Transaction Closing, without
the prior written consent of Wendy’s, the Amended and Restated Certificate of
Incorporation of DavCo Restaurants shall not be amended, modified or changed in
any manner that would modify, change or affect the provisions thereof permitting
DavCo Restaurants to take any of the actions permitted in Section 4 of
Article Fourth of the Amended and Restated Certificate of Incorporation in
the form attached hereto as Exhibit A, in the event of a
Change of Control, as contemplated by Section 10 hereof, or which would
have an adverse effect on any of Wendy’s rights or remedies under this Amended
Consent to Assignment.

 

7

 

(iii)                               DavCo
Restaurants has attached hereto a true and correct copy of each of the LTIP and
the Reinvestment Plan, as Exhibit B and Exhibit C,
respectively, to be adopted as of the Transaction Closing substantially in the
form of such exhibits.  Neither the LTIP
nor the Reinvestment Plan shall be amended or modified in any material respect
without the prior written consent of Wendy’s.

 

(iv)                              Wendy’s
shall have the right to review and consent to the form of each of the
stockholders agreement, retained interest investors agreement and any other
agreement among the existing stockholders of DavCo Restaurants (collectively,
the “Stockholders
Agreement”) that is to be entered into prior to or in connection
with the Transaction Closing, such consent not to be unreasonably withheld,
provided that the failure of Wendy’s to grant such consent due to any
inconsistency between the Stockholders Agreement and this Amended Consent to
Assignment shall be deemed to be not unreasonable.  DavCo Restaurants shall furnish to Wendy’s copies of the
Stockholders Agreement as promptly as practicable following the date hereof and
Wendy’s shall review and respond thereto as promptly as practicable and, with
respect to the final version of the Stockholders Agreement, not later than two
(2) business days following Wendy’s receipt thereof pursuant to delivery thereof
given in accordance with Section 17.B(6), provided that DavCo Restaurants
has indicated in writing to Wendy’s that such version is the final version
thereof.  Following the Transaction
Closing, the Stockholders Agreement shall not be amended, modified, changed or
replaced without the prior written consent and/or waiver of Wendy’s if any such
proposed amendment, modification, change or replacement would be in violation
of or inconsistent with the provisions hereof, including the provisions of
Section 3.

 

C.                                     Franchisees
acknowledge and agree that the obligations and outstanding amounts referenced
on Exhibit D
attached hereto shall be paid or otherwise resolved to Wendy’s satisfaction
contemporaneously with the execution of this Amended Consent to Assignment.  However, execution of this Amended Consent
to Assignment by Wendy’s shall not, nor be deemed to, constitute and is not
intended as a waiver of any additional obligations or amounts outstanding and
due to Wendy’s.  Notwithstanding
Franchisees’ execution of the Franchise Contracts as described herein,
Franchisees assume responsibility and are responsible for all obligations to
Wendy’s, its subsidiaries and any advertising cooperatives under the Existing
Franchise Agreements arising or accruing up to the Initial Consent Date.

 

D.                                    Whether
or not the Transaction Closing shall occur, Franchisees shall,
contemporaneously with the execution of this Amended Consent to Assignment,

 

8

 

reimburse Wendy’s for
Wendy’s actual outside legal fees and expenses, including any applicable goods
and service taxes, associated with its review, document drafting, and any
consent in connection with the Transactions, including this Amended Consent to
Assignment and all related documents, incurred through the date of execution of
this Amended Consent to Assignment, and with respect to any such fees and
expenses incurred thereafter, within thirty (30) days following the Transaction
Closing.

 

E.                                      As
of the Initial Consent Date, Franchisees and Wendy’s entered into the Franchise
Contracts and the Initial Consent.  It
is the intent and agreement of the parties that the terms of the Addendum, the
New Franchise Agreements and the Development Letter shall have been effective
since the Initial Consent Date and shall be applicable to any future Restaurant
developed by Franchisees following the Initial Consent Date under the
Performance Schedule of the Development Letter (but not under the right of
first refusal contained in the Development Letter which shall be based upon
Wendy’s then current form of franchise agreement).  Franchisees and Wendy’s further agree that, as of the Initial
Consent Date, except as otherwise specifically provided in the Initial Consent,
the Existing Franchise Agreements were superseded and replaced in their
entirety with the Franchise Contracts, and applicable provisions of the Initial
Consent and, as of and following the date hereof, with the applicable
provisions of this Amended Consent to Assignment.  The Franchise Contracts, as of and following the Initial Consent
Date, the Initial Consent (from the Initial Consent Date to the date hereof)
and this Amended Consent to Assignment, as of and following the date hereof,
shall govern the parties’ relationship with respect to the Restaurants.  Except as specifically set forth herein or
in the Initial Consent, as of the Initial Consent Date, the Existing Franchise
Agreements were of no further force or effect; provided, however,
that any release of claims previously executed by any of the parties under the
Existing Franchise Agreements remain binding.

 

(1)                                  Franchisees
warrant, represent and confirm that the Franchise Contracts were, as of the
date of the Initial Consent, are, as of the date hereof, and will be as of the
Transaction Closing, valid and binding obligations of Franchisees, in full
force and in effect and enforceable in accordance with their respective terms.

 

(2)                                  Franchisees
warrant, represent and confirm that Franchisees were, as of the Initial Consent
Date, are, as of the date hereof, and will be, as the Transaction Closing, (i) in
material compliance with all provisions of the Franchise Contracts and (ii) not
in violation of any other agreement with a third party where such violation
would have an adverse effect on the Franchise Contracts or Franchisees’
obligations to Wendy’s.

 

(3)                                  Notwithstanding
the replacement of the Existing Franchise Agreements with the Franchise
Contracts as of the Initial Consent Date, Franchisees agree to be and to remain
jointly and severally liable for all obligations

 

9

 

and the performance of
all covenants of “Franchise Owner,” as defined in the
Existing Franchise Agreements, arising or accruing up to the Initial Consent
Date.  Franchisees agree that
Franchisees’ failure to comply with any such provisions of the Existing
Franchise Agreements shall constitute a default under the Franchise Contracts
and this Amended Consent to Assignment entitling Wendy’s to exercise all of its
rights and remedies thereunder and hereunder. 
Franchisees agree that, as of and following the Initial Consent Date,
all references to any of the Existing Franchise Agreements set forth in any
test agreement or other existing agreements with Wendy’s or its subsidiaries
shall be deemed to mean and refer to the Franchise Contracts.  Franchisees agree that, as of and following
the Initial Consent Date, the cross-default provisions of such test or other
existing agreements shall be deemed to reference the Franchise Contracts in
lieu of the Existing Franchise Agreements, such that a default under such test
or other existing agreements shall constitute a default under the Franchise
Contracts.

 

(4)                                  Franchisees
and Wendy’s agree that the Development Letter is hereby amended by changing the
Performance Schedule (as defined in the Development Letter) to provide
that the number of additional Restaurants to be opened during the year ending
December 31, 2010 shall be eight (8), instead of seven (7).

 

F.                                      Franchisees
warrant, represent and confirm that at all times following the Initial Consent
Date (i) the Restaurants have been and shall be operated only by
the Franchisees, (ii) Franchisees have had and shall have the
contractual right to possession of the premises associated with each of the
Restaurants and (iii) Franchisees have been and shall be the
owners, lessees or licensees of all of the assets of the Restaurants.

 

G.                                     Franchisees
warrant, represent and agree that Franchisees, as of the Initial Consent Date,
had, as of the date of this Amended Consent to Assignment, have, and as of the
Transaction Closing, will have, in full force and effect and will maintain at
all times and will have delivered to Wendy’s a certificate of insurance
specifically covering each of the Restaurants under the Franchise Contracts and
which complies with the insurance provisions of the Franchise Contracts and
this Amended Consent to Assignment, and includes the street locations on the
front or back of the certificate or attached to it as an exhibit, naming Franchisees
(or either of them) as the insured and naming Wendy’s as additional insured.

 

H.                                    Franchisees
acknowledge and agree that as of and following the Initial Consent Date,
Franchisees are obligated to comply with the 2002/03 and 2004-06 Wendy’s National
Advertising Program, Inc. (“WNAP”) increases providing for 3% of gross
sales to be paid to WNAP (and such other increases as are described below); provided,
however, that as of and following the Initial Consent Date, the payment
by Franchisees of that 3% shall be made as follows:

 

10

 

(1)                                  Franchisees
agree to support the 3% national advertising program entitled U.S.A. 2002/2003
such that the 4% required advertising expenditure for 2003 and 2004 shall be allocated
3% to WNAP for national advertising and 1% to local advertising, provided that
Franchisees shall pay the national contribution as follows:

 

(i)                                     Franchisees
shall pay 2% toward national advertising from January-December, 2003 (based on
sales January-December of 2003), an additional 1⁄2% from January–April, 2003
(based upon sales from January-April, 2002), and an additional 1% from
May-December 2003 (based on sales May-December 2002); and

 

(ii)                                  Franchisees
shall pay 2% toward national advertising from January-December, 2004 (for sales
January-December, 2004), and an additional 1% from January-December 2004
(based on sales January-December 2003).

 

(2)                                  Franchisees
agree to support the 3% national advertising program entitled U.S.A. 2004-06
such that the 4% required advertising expenditure for 2004, 2005, and 2006
shall be allocated 3% to WNAP for national advertising and 1% to local
advertising; provided, however, that Franchisees shall pay the 3% national
contribution as follows:

 

(i)                                     Franchisees
shall pay 2% toward national advertising from January-December, 2005 (based on
sales January-December of 2005), and an additional 1% from
January-December 2005 (based on sales January-December 2004);

 

(ii)                                  Franchisees
shall pay 2% toward national advertising from January-December, 2006 (based on
sales January-December of 2006), and an additional 1% from
January-December 2006 (based on sales January-December 2005); and

 

(iii)                               Franchisees
shall pay 2% toward national advertising from January-December, 2007 (based on sales
January-December of 2007), and an additional 1% from
January-December 2007 (based on sales January-December 2006).

 

(3)                                  As
of and following the Initial Consent Date, Franchisees agree to be legally
bound by and to comply with any allocation or reallocation of the required
advertising contribution (between WNAP and local advertising) as determined by
Wendy’s, if such allocation/reallocation is applicable to at least 80% of the
Wendy’s restaurants (including company restaurants) operating in the United States,
excluding entirely from such calculation those restaurants operated by the
Franchisees; provided, however, that to the extent the national
contribution is in excess of 2%, Franchisees shall

 

11

 

be permitted to pay such
excess amount twelve months in arrears. 
For example, if at least 80% of the Wendy’s restaurants in the United
States are obligated to contribute 3% to WNAP for calendar year 2007,
Franchisees shall also be obligated to contribute 3% to WNAP for 2007, but,
similar to the process described in Section 2.H(2) above, shall pay the
additional 1% on a monthly basis 12 months in arrears (during the following
calendar year 2008 based upon 2007 sales). 
Franchisees further agree that they shall not be involved in any
balloting or other program that may be associated with any
allocation/reallocation of advertising expenditures, but shall abide by the
system standard as described herein and subject to the terms herein without
such ballot or program participation.

 

I.                                         Franchisees
acknowledge and confirm that prior to the Initial Consent Date they received
and reviewed a copy of Wendy’s transaction policy dated September 20,
2001, and have agreed from and after the Initial Consent Date to comply with the
provisions therein in connection with any subsequent transfer of any interests
requiring Wendy’s consent under the Franchise Contracts.

 

J.                                        Franchisees
acknowledge and agree that, due to the unique corporate and legal structure
involved, Franchisees will not be permitted to directly or indirectly acquire
any interest in additional Wendy’s Old Fashioned Hamburgers Restaurants outside
Virginia, Maryland and Washington, D.C., or in any franchise of any franchise
system now or in the future owned or controlled by Wendy’s.  Franchisees further acknowledge and agree
that within Virginia or Maryland, but outside the Territory, the acquisition of
any additional Wendy’s Old Fashioned Hamburgers Restaurants or any interest in
a Wendy’s franchisee or Wendy’s franchised business by Franchisees or any
entities directly or indirectly controlled in any manner by Franchisees shall
require Wendy’s prior written consent and waiver of its right of first refusal,
and such consent and waiver shall require full compliance with Wendy’s then
existing policies and standards, including the execution of a Wendy’s standard
form franchise agreement and personal guaranties.  Franchisees further
acknowledge and agree that Wendy’s and its affiliates have the sole, absolute
and unrestricted right as franchisors to select the parties to whom Wendy’s and
its affiliates will grant franchises and that, except for the development of
Wendy’s Old Fashioned Hamburgers Restaurants by Franchisees in the Territory,
Franchisees have no rights or expectations of any kind or nature with respect
to the development of Wendy’s Old Fashioned Hamburgers Restaurants or any other
franchise of any franchise system now or in the future owned or controlled by
Wendy’s.

 

K.                                    DavCo
Restaurants shall have the right to expand into other concepts which do not
violate the noncompete provisions of the Franchise Contracts or this Amended
Consent to Assignment.  The business of
DavCo Operations is currently, and shall remain, limited to the ownership and
operation of Wendy’s Old Fashioned Hamburgers Restaurants.

 

12

 

L.                                      The
DavCo Parties agree and covenant that concurrently with the execution and
delivery hereof, the DavCo Parties are causing Byron L. Knief to execute
and deliver to Wendy’s the Acknowledgment attached hereto.

 

M.                                 The
Note Indenture to be entered into as of the Transaction Closing among SunTrust
Bank, as trustee (the “Trustee”), DavCo Restaurants and DavCo
Operations providing for the issuance of the Subordinated Notes (the “Note
Indenture”), and each guaranty described in Section 14.C(2)
(collectively, the “Guaranty”), shall contain the terms and
provisions described in the “Description of Senior Subordinated Notes” attached
hereto as Exhibit E (the “Description”) (including the
definition set forth therein of “Affiliate” to be included in the Note
Indenture) and the terms and conditions contained in the applicable provisions
hereof, including Section 14.C.  As
of and following the Transaction Closing (except to the extent permitted by the
last sentence of this Section 2.M), the Note Indenture and the Guaranty
shall not contain any terms or provisions that are inconsistent with or
conflict with the Description or the terms and provisions of this Amended Consent
to Assignment.  Wendy’s shall have the
right to review and consent to the form of the Note Indenture and the Guaranty
prior to the Transaction Closing (such consent not to be unreasonably withheld,
provided that the failure of Wendy’s to grant such consent due to a breach of
the covenant contained in the preceding sentences shall be deemed to be not
unreasonable).  DavCo Restaurants shall
furnish to Wendy’s copies of the Note Indenture and the Guaranty as promptly as
practicable following the date hereof and Wendy’s shall review and respond
thereto as promptly as practicable and, with respect to the final version of
the Note Indenture and the Guaranty, not later than two (2) business days
following Wendy’s receipt thereof pursuant to delivery thereof given in accordance
with Section 17.B(6), provided that DavCo Restaurants has indicated in
writing to Wendy’s that such version is the final version thereof.  Following the Transaction Closing, the Note
Indenture and the Guaranty shall not be amended, modified, changed or replaced
without the prior written consent and/or waiver of Wendy’s if any such proposed
amendment, modification, change or replacement would be in violation of or
inconsistent with the provisions hereof, including the provisions of
Section 14.B or Section 14.C.

 

N.                                    Each
of the DavCo Parties warrants, represents and confirms that it has all
requisite power and authority to enter into and perform its obligations under
this Amended Consent to Assignment, such DavCo Party has taken all action
necessary to execute and deliver this Amended Consent to Assignment and this
Amended Consent to Assignment has been duly authorized, executed and delivered
by such DavCo Party and constitutes the legal, valid and binding agreement of
such DavCo Party, enforceable against such DavCo Party in accordance with its
terms.  Each of Rothstein and the
Rothstein Trusts, and each of Kirstien and the Kirstien Trust, warrants,
represents and confirms that (i) each of the Rothstein Trusts and the
Kirstien Trust is duly formed and validly existing, (ii) Rothstein is
the sole trustee of the Rothstein Trusts and Kirstien is the sole trustee of
the Kirstien Trust, each having full power and authority to bind such

 

13

 

trust and (iii)
the execution, delivery and performance of this Amended Consent to Assignment
by each such trust will not violate or constitute a breach under its trust
agreement or other organizational instrument or violate any applicable law.  Each of the DavCo Parties hereby ratifies
and confirms the representations and warranties set forth in Section 2.O
of the Initial Consent and represents and warrants to Wendy’s that there has
been no breach by any of the DavCo Parties of any of the provisions of the
Initial Consent.

 

O.                                    (1)                                  Franchisees
hereby covenant and agree to secure all of their obligations to Wendy’s of
payment and performance under each of the Franchise Contracts and under this
Amended Consent to Assignment (including the Wendy’s Obligations, as
hereinafter defined) by a collateral pool of first priority leasehold mortgages
in favor of Wendy’s on valid and marketable leasehold interests in Restaurants
acceptable to Wendy’s and having a “value” of not less than Ten Million Dollars
($10,000,000) (the “Leasehold Mortgages”). 
The Leasehold Mortgages shall secure all obligations of Franchisees to
Wendy’s whether or not the obligation relates to one or more of the Restaurants
subject to a Leasehold Mortgage.  For
purposes of this Section 2.O, “value” shall be the sum of the products of
(a) five (5), multiplied by (b) EBITDA (earnings before interest, taxes,
depreciation and amortization), attributable to each Restaurant included in the
collateral pool for the most recently ended fiscal year, as determined in accordance
with generally accepted accounting principles consistently applied.  Franchisees further covenant and agree to
execute and deliver to Wendy’s, not less than thirty (30) days prior to the
Transaction Closing, for recording concurrently with the Transaction Closing,
Leasehold Mortgages in form and substance satisfactory to Wendy’s and in form
acceptable for recording.  Concurrently
with the Transaction Closing, Franchisees covenant and agree:  (i) to furnish to Wendy’s policies of
leasehold mortgage title insurance on ALTA Loan Policy Form B, or equivalent
policy form, in an amount of not less than Ten Million Dollars ($10,000,000)
with a tie-in endorsement and such other endorsements as Wendy’s may request
and (ii) a landlord waiver and an estoppel certificate in form and substance
satisfactory to Wendy’s from the landlord of each Restaurant in the collateral
pool.  All fees, costs and expenses of
preparing and recording the Leasehold Mortgages, including attorneys’ fees and
any applicable transfer and recording fees and taxes, and all title insurance
charges shall be borne by Franchisees. 
All applicable transfer and recording fees and taxes and all title
insurance charges shall be paid by Franchisees directly to the applicable payee
and all other fees, costs and expenses incurred by Wendy’s shall be paid
pursuant to Section 2.D.

 

(2)                                  Franchisees
covenant and agree to maintain the mortgaged leasehold properties free and
clear of any liens or encumbrances other than those in favor of Wendy’s.  The exercise by Wendy’s of its remedies
under one or more of the Leasehold Mortgages shall not preclude the exercise by
Wendy’s of any other rights or remedies that Wendy’s may have under the
Franchise Contracts, this Amended Consent to Assignment (including any rights
under the DavCo Letter of Credit) or otherwise.  Franchisees hereby acknowledge and agree that in the event

 

14

 

Wendy’s forecloses upon
one or more of the Leasehold Mortgages and as a result thereof succeeds to the
leasehold interest of the Franchisees in the corresponding leaseholds, Wendy’s
shall have the right to operate the Restaurants subject to the foreclosed
Leasehold Mortgages as Wendy’s restaurants or to authorize one or more others
to operate such Restaurants as a Wendy’s restaurant, notwithstanding any
provision to the contrary in the Franchise Contracts.  Franchisees further covenant and agree that the “value” of the
Restaurants subject to the Leasehold Mortgages shall be re-determined on an
annual basis within thirty (30) days following the issuance of Franchisees’
annual audited financial statements.  If
the “value” as re-determined is less than Nine Million Dollars ($9,000,000),
Franchisees shall grant to Wendy’s a first priority leasehold mortgage on valid
and marketable leasehold interests in Restaurants acceptable to Wendy’s having
a “value” sufficient to increase the aggregate “value” to Ten Million Dollars
($10,000,000) or more.

 

P.                                      Franchisees
covenant and agree to participate in the Wendy’s E-Royalty Program (or similar
electronic payment program approved by Wendy’s for its franchisees) throughout
the term of the Franchise Contracts.

 

Q.                                    The
DavCo Parties represent and warrant to Wendy’s that CCT has been dissolved and
has ceased to be a party to the Initial Consent and is therefore not a party
hereto, that 92.20% and 6.63% of the shares of DavCo Restaurants held by CCT
were distributed to Citicorp and Byron Knief, respectively, and that Wendy’s
shall be indemnified and held harmless by the DavCo Parties against any claims
or matters arising out of the failure by CCT to execute this Amended Consent to
Assignment.  The parties hereto
acknowledge and agree that this Amended Consent to Assignment shall be binding
upon them notwithstanding that CCT is not a party hereto.

 

R.                                     The
DavCo Parties represent and warrant to Wendy’s that, based upon the current
relationship of Wendy’s, and its subsidiaries and affiliates, to Franchisees,
and their respective subsidiaries and affiliates, none of Wendy’s or its
subsidiaries or affiliates is an “Affiliate” (as such term will be defined in
the Note Indenture) of any of Franchisees or their respective subsidiaries or
affiliates.

 

3.                                       Control Block. 
The provisions of this Section 3 shall apply if the
Transaction Closing shall occur.

 

A.                                   (1)                                  As
of and at all times following the Transaction Closing until the Exchange Date
(as hereinafter defined), (i) the Control Block Principals (as
hereinafter defined) shall own, free and clear of liens, encumbrances or other
restrictions, the Base Block (as hereinafter defined) and (ii) the
Base Block shall represent not less than ten percent (10%) of the total
economic value of the total outstanding equity interests (on a fully-diluted
basis), and not less than ten percent (10%) of the total outstanding voting
interests (on a fully-diluted basis), in DavCo Restaurants.  As of the Transaction

 

15

 

Closing, the DavCo
Parties shall deliver to Wendy’s a certificate executed by the DavCo Parties
certifying as to the number of shares of Common Stock constituting the Base
Block and that the requirements set forth in the preceding clause (ii)
have been satisfied.

 

(2)                                  The
Control Block Principals agree not to exchange any of their respective shares
of Class B Common Stock for EISs (i) prior to the Exchange Date, (ii)
at any time that there exists a violation of any of the provisions of or a
default under any of the Franchise Contracts or this Amended Consent to
Assignment or (iii) at an exchange rate that would result in a smaller
Class A Common Stock component of such EISs than that which would be yielded at
the exchange rate reflected in the final prospectus for the Offering.

 

(3)                                  As
of and at all times following the Exchange Date, except as otherwise permitted
by Section 3.A(4), the Control Block Principals shall own, free and clear
of liens, encumbrances or other restrictions, a number of shares of Common
Stock representing not less than ten percent (10%) of the total economic value
of the total outstanding equity interests (on a fully-diluted basis), and not
less than ten percent (10%) of the total outstanding voting interests (on a
fully-diluted basis), in DavCo Restaurants (the “10% Block”).

 

(4)                                  If
at anytime on or following the Exchange Date and prior to the Renewal Date (as
hereinafter defined), solely as a result of the exchange by one or more  Control Block Principals of shares of Class
B Common Stock for EISs, the Control Block Principals shall own less than the
10% Block, then during such period the requirement set forth in
Section 3.A(3) that the Control Block Principals own the 10% Block shall
be deemed to be satisfied at any time that the Control Block Principals and
Citicorp together own the 10% Block, provided that the Control Block Principals
then own not less than the greater of the following (the “Post-Exchange Minimum Block”):  (i) the Base Block or (ii) a
number of issued and outstanding shares of Common Stock representing not less
than five percent (5%) of the total economic value of the total outstanding
equity interests (on a fully-diluted basis) and not less than five percent (5%)
of the total outstanding voting interests (on a fully-diluted basis) in DavCo
Restaurants (the “5% Block”).  The Post-Exchange Minimum Block shall be determined without
including any shares of Common Stock owned by Citicorp.  In addition, following the Exchange Date,
the Control Block Principals shall be required to own a number of shares of
Common Stock (excluding any shares of Common Stock owned by Citicorp) equal to
the Base Block not later than and at all times following the anniversary of the
Transaction Closing occurring in 2015.

 

16

 

(5)                                  The
Control Block Principals shall (i) use fifty percent (50%) of the
after-tax amount of all dividends, distributions or other payments paid
directly or indirectly to them in respect of any Equity Interests (as
hereinafter defined) owned by them in DavCo Restaurants or DavCo Operations to
purchase or acquire additional shares of Common Stock or EISs (or shall elect
to receive such after-tax amount of any such dividends, distributions or other
payments in the form of shares of Common Stock or EISs), (ii) use
all of the after-tax amount of all cash, stock, or other awards received by
them pursuant to the LTIP or any other incentive program, in each such case, to
purchase, acquire or hold additional shares of Common Stock or EISs, and (iii) take
all action necessary to cause any EISs or shares of Common Stock which they may
be awarded or entitled to acquire pursuant to the LTIP, the Reinvestment Plan
or any other incentive program to be issued to them or purchased by them or on
their behalf promptly upon satisfaction of any provisions in the LTIP, the
Reinvestment Plan or any other incentive program relating to the vesting or
earning of such cash, stock or other awards. 
For the avoidance of doubt, any acquisition by Control Block Principals
of Subordinated Notes shall not satisfy the obligations set forth in this Section.  The obligations of the Control Block
Principals set forth in this Section 3.A(5) shall become effective on the
date of the Transaction Closing and shall continue in effect (x) at
all times prior to the Exchange Date and (y) following the Exchange Date,
until such time that the Control Block Principals shall own the 10% Block,
which shall be not later than the Renewal Date, and thereafter from time to
time as shall be necessary to maintain the ownership by the Control Block
Principals of the 10% Block.  For
purposes of this Section 3.A(5), shares of Common Stock owned by Citicorp
shall not be deemed to be included in the 10% Block.  The “after-tax” calculations referred to in this
Section 3.A(5) shall be made using the actual maximum U.S. federal and Maryland
state income tax rates for individuals in effect from time to time.

 

(6)                                  For
purposes of determining whether the Control Block Principals are in compliance
with the provisions of this Section 3, shares of Class A Common Stock
constituting part of an EIS held by a Control Block Principal shall be included
in calculating the 10% Block and the 5% Block, but EISs (other than the
component thereof consisting of Class A Common Stock), Subordinated Notes
(including Subordinated Notes constituting part of an EIS) and any other
subordinated indebtedness shall not be included.  For purposes of this Amended Consent to Assignment, a share of
Class B Common Stock shall be deemed to have the same economic value as a
share of Class A Common Stock.  Any
shares of Common Stock included in Control Block Shares held by Permitted
Transferees (as hereinafter defined) shall be included in the Base Block and
for purposes of determining whether the Control Block Principals own the 10%
Block or the 5% Block only so long as the Control Block

 

17

 

Principal for the benefit
of whose family the trust exists remains the sole trustee thereof and the other
requirements of Section 3.C(6) are satisfied.

 

B.                                     (1)                                  As
used herein, “Control Block Principals” shall mean, collectively, the
following individuals: (i) Rothstein, Kirstien, Norman, Cunnane and
Borchers, (ii) up to one (1) additional individual who shall be a
senior officer of DavCo Operations or DavCo Restaurants involved in the operation,
management or development of the Restaurants and (iii) any
individual to whom one of the persons described in the preceding clauses
(i) and (ii) has transferred Control Block Shares, but only if such
transfer is permitted by the provisions of Section 3.C hereof; provided,
however, that (x) there shall not at any time be more than
six (6) Control Block Principals, and (y) the Control Block
Principals shall at all times include the Chief Executive Officer, the
President and the primary Operator (as approved by Wendy’s pursuant to the
Franchise Contracts) of DavCo Restaurants. 
“Majority
Control Block Principals” shall mean each of Rothstein and Kirstien
(and any individual to whom a Majority Control Block Principal has Transferred
Control Block Shares pursuant to the provisions of Section 3.C(4) or
Section 3.C(5)).  “Minority
Control Block Principals” shall mean each of the Control Block
Principals other than the Majority Control Block Principals.

 

(2)                                  As
used herein, (i) ”Base Block” means the aggregate number of
shares of Common Stock owned by the Control Block Principals on the Transaction
Closing (giving effect to the Recapitalization), as adjusted for any stock
split, stock dividend or similar event occurring after the Transaction Closing,
(ii) ”Exchange Date” means the second anniversary
of the date of the Transaction Closing and (iii) ”Renewal Date”
means the date on which the Franchise Contracts are subject to renewal.

 

(3)                                  As
used herein “Control Block Shares” means the shares of Common Stock (including
any shares of Common Stock constituting part of an EIS), EISs and any other
Equity Interests in DavCo Restaurants, owned at any time by the Control Block
Principals or a Permitted Transferee (as hereinafter defined); provided,
however, that “Control Block Shares” shall not include (i) following
the Exchange Date, any shares of Common Stock in excess of the number of shares
of Common Stock that would be required to be owned by Control Block Principals
in order to own the 10% Block (without including shares of Common Stock owned
by Citicorp) or (ii) Subordinated Notes issued separately from EISs
or any other subordinated indebtedness issued separately from EISs.

 

C.                                     None
of the Control Block Principals nor any Permitted Transferee shall be
permitted, directly or indirectly, to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of or encumber, voluntarily or by operation of
law, including by exchange, conversion, cancellation, forfeiture or redemption
(“Transfer,”
and

 

18

 

“Transferred” shall have a
correlative meaning) any interest in any of the Control Block Shares, except as
permitted by this Section 3.C and subject to the requirements of
Section 3.B(1)(x) and (y) with respect to Control Block Principals.

 

(1)                                  A
Minority Control Block Principal may Transfer all or any portion of the Control
Block Shares owned by such Minority Control Block Principal or his or her
Permitted Transferee to any other Control Block Principal and Wendy’s shall not
have a right of first refusal with respect to or right to consent to such
Transfer.

 

(2)                                  A
Minority Control Block Principal may Transfer all, but not less than all, of
the Control Block Shares owned by such Minority Control Block Principal or his
or her Permitted Transferee to a person who is not a Control Block Principal,
subject to receipt of the prior written consent of Wendy’s to such proposed
Transfer, which consent shall not be unreasonably withheld; provided, however,
that Wendy’s shall have the absolute right to require as a condition to its
consent that the proposed transferee (i) is an individual, (ii) has
agreed to comply with the non-compete and confidentiality provisions of the
Franchise Contracts, (iii) has not been convicted of a felony, a
crime involving moral turpitude, or any other crime or offense that Wendy’s
believes is reasonably likely to have an adverse effect on the System or the
Proprietary Marks (as each such term is defined in the Franchise Contracts),
the goodwill associated therewith or Wendy’s interest therein, and (iv) has
agreed in writing to be bound by the terms hereof as a Control Block Principal
and a Minority Control Block Principal. 
Wendy’s shall not have a right of first refusal with respect to any such
Transfer to which it has consented under this Section 3.C(2).

 

(3)                                  A
Majority Control Block Principal may Transfer all or any portion of the Control
Block Shares owned by such Majority Control Block Principal or his or her
Permitted Transferee to the other Majority Control Block Principal.  Wendy’s shall not have a right of first
refusal with respect to or right to consent to such Transfer.

 

(4)                                  Except
as permitted by Section 3.C(3), Section 3.C(5) and
Section 3.C(6), a Majority Control Block Principal may not Transfer all or
any portion of his Control Block Shares (nor may such Majority Control Block
Principal’s Permitted Transferee Transfer any of its Control Block Shares)
unless:  (i) all of the
outstanding Control Block Shares are Transferred, (ii) Wendy’s has
waived in writing its right of first refusal to purchase all of the outstanding
Control Block Shares and (iii) Wendy’s has consented in writing to
such proposed Transfer.  Wendy’s shall
not unreasonably withhold the consent required by this Section 3.C(4);
however, Wendy’s shall have the absolute right to require as a condition of its
consent that the

 

19

 

proposed transferee (x) be
an individual who will succeed to the management responsibilities of such
Majority Control Block Principal at DavCo Restaurants and DavCo Operations, (y) meets
the criteria set forth in Sections 13.3.A(i) through (vi) of the New
Franchise Agreements (as in effect on the date hereof) and (z) has
agreed to be bound by the terms hereof as a Control Block Principal and a
Majority Control Block Principal.

 

(5)                                  Upon
the death or mental incapacity of a Majority Control Block Principal, the
Control Block Shares owned by such Majority Control Block Principal may be
transferred to the personal representative of such Control Block
Principal.  The personal representative
shall dispose of such Control Block Shares, and any Permitted Transferee of
such Majority Control Block Principal shall dispose of all Control Block Shares
owned by such Permitted Transferee, all within two (2) years after the death or
mental incapacity of such Majority Control Block Principal; provided,
that:  (i) if such disposition is
a proposed Transfer of all or any of such Control Block Shares to a Majority
Control Block Principal, Wendy’s shall not have a right of first refusal with
respect to, or the right to consent to, the Transfer of such shares to a
Majority Control Block Principal; (ii) if such disposition is a proposed
Transfer of all or any of such Control Block Shares to a Minority Control Block
Principal, Wendy’s shall not have a right of first refusal with respect to such
shares but Wendy’s prior written consent to such Transfer shall be required and
the consent provisions of Section 3.C(4) shall apply to the proposed Transfer
to such Minority Control Block Principal; (iii) if such disposition is a
proposed Transfer of all or any of such Control Block Shares to a trust or
other entity approved by Wendy’s whose sole beneficial owners are the heirs of
such Majority Control Block Principal and the trustee of which (or the person
controlling the voting rights in such entity) is an individual meeting the
requirements of Section 3.C(4)(x) and is also an officer of DavCo
Operations, Wendy’s shall not have a right of first refusal with respect to
such shares but such Transfer shall require the prior written consent of
Wendy’s and the consent provisions of Section 3.C(4) shall apply to such
proposed Transfer, and (iv) if such disposition is a proposed Transfer
of all or any of such Control Block Shares to any person not described in the
preceding clauses (i) through (iii), Wendy’s shall have a right of first
refusal with respect to, and the right to consent to, such Transfer, which
shall be required to meet all of the requirements of Section 3.C(4), other
than Section 3.C(4)(i).  If Wendy’s
exercises its right of first refusal with respect to a proposed Transfer under
Section 3.C(5)(iv), the Control Block Shares so acquired by Wendy’s shall
be included for purposes of determining whether the Control Block Principals
own the Base Block or the 10% Block.

 

20

 

(6)                                  A
Control Block Principal may at any time Transfer his or her Control Block
Shares to a family trust for the benefit of such Control Block Principal’s
family of which such Control Block Principal is and remains the sole trustee (a
“Permitted
Transferee”) without Wendy’s consent or waiver of a first refusal
right if written notice is given to Wendy’s not less than thirty (30) days prior
to such Transfer and the transferee agrees in writing to be bound by the
restrictions on Transfer of Control Block Shares, the noncompetition
obligations and other covenants and obligations applicable to Control Block
Principals set forth herein.  The beneficiaries
of any such trusts shall not be deemed to be Permitted Transferees hereunder
and any Transfer of Control Block Shares to any such beneficiaries shall be
required to comply with the provisions of Section 3.C(2) or
Section 3.C(4), as applicable.  The
parties acknowledge and agree that, upon the Transaction Closing, for so long
as the sole trustees thereof are Rothstein and Kirstien, respectively, the
Rothstein Trusts and the Kirstien Trust shall be Permitted Transferees
hereunder and shall be bound by the provisions hereof applicable to Permitted
Transferees; provided, however, that the beneficiaries of such
trusts shall not be deemed to be Permitted Transferees hereunder.

 

(7)                                  The
exchange of shares of Class B Common Stock for EISs shall not constitute a
Transfer of such shares for purposes of this Section 3, Section 4 or
Section 5 so long as following such exchange the Control Block Principal
who owned such shares owns the EISs for which they were exchanged and the
exchange does not result in a violation of the provisions of Section 3.A.

 

D.                                   Franchisees
and the Control Block Principals shall cause the certificates or other
instruments evidencing any of the Control Block Shares to be stamped or
otherwise imprinted with a legend in substantially the following form:

 

“The transfer of the
shares represented by this certificate is subject to the restrictions and
conditions specified in the Amended and Restated Agreement and Consent to
Assignment dated as of April 16, 2004 (the “Amended Consent to Assignment”)
among, inter
alia, DavCo Restaurants Inc., DavCo Operations Inc. and certain
holders of the equity interests therein, and no transfer of such shares shall
be valid or effective until such restrictions and conditions shall have been
satisfied or fulfilled with respect to such transfer.  A copy of the Amended Consent to Assignment will be furnished by
DavCo Restaurants Inc. to the holder hereof upon written request and without
charge.”

 

E.                                      The
DavCo Parties agree that (i) no Control Block Shares shall be
issued or Transferred to any person unless such person has agreed to be bound
by the provisions of this Amended Consent to Assignment applicable to Control
Block

 

21

 

Principals and (ii) prior
to the Transaction Closing, the DavCo Parties shall deliver to Wendy’s the
written agreement of the individual described in Section 3.B(1)(ii) to be
bound by the provisions of this Amended Consent to Assignment applicable to
Control Block Principals.

 

4.                                       Right of First Refusal.

 

A.                                   The
DavCo Parties, the Control Block Principals and the Permitted Transferees
hereby acknowledge and agree that Wendy’s shall have at all times following the
Initial Consent Date, and hereby confirm that they have granted to Wendy’s, a
right of first refusal to acquire the interests or assets proposed to be
Transferred or issued in the event of any of the following (individually and
collectively, a “Proposed Transfer”):  (i) a
proposed Transfer by the holder thereof of any Equity  Interest in DavCo
Operations, (ii) a proposed Transfer of any portion of the Control
Block Shares pursuant to Sections 3.C(4), 3.C(5) or 3.C(6) hereof (and
each of the Control Block Principals and each Permitted Transferee acknowledges
and agrees that if Wendy’s exercises its right of first refusal to purchase all
of the Control Block Shares pursuant to Section 3.C(4), such purchase
shall be on the same terms and conditions as those offered by the Majority
Control Block Principal’s prospective Transferee), (iii) the proposed
issuance of any Equity Interests in any private or public sale or offering of
any Equity Interests in DavCo Operations or DavCo Restaurants, (iv) a
proposed Transfer of one or more Restaurants or any of the Franchise Contracts
executed by Franchisees, or (v) a direct or indirect proposed
Transfer of all or substantially all of the Wendy’s business or the assets of
the business or of any part of the Wendy’s business or assets such that the
assets proposed to be transferred comprise all or substantially all of the
assets of one or more Restaurants; provided, however, that this
right of first refusal shall not be applicable to (v) the exchange
of existing common stock of DavCo Restaurants for Class B Common Stock in
the Recapitalization, (w) any Permitted Asset Transfer, (x) a
Transfer by the holders thereof of outstanding Class A Common Stock,
Class B Common Stock, Subordinated Notes or EISs (other than Control Block
Shares, as provided in clause (ii) above), (y) a Transfer resulting
from the repurchase by DavCo Restaurants of shares of Class B Common Stock
from CVC for cash on hand and a portion of the proceeds of the Offering,
including the exercise of an over-allotment option granted for EISs offered in
the Offering as described in the final prospectus distributed in connection
with the Offering, or (z) the issuance of Common Stock or EISs
pursuant to the LTIP, the Reinvestment Plan or any other employee stock
incentive plan adopted by DavCo Restaurants and that has been approved by
Wendy’s.  Failure to comply with such
right of first refusal shall constitute a default hereunder and under the
Franchise Contracts entitling Wendy’s to exercise all of its rights and
remedies hereunder and thereunder.  Any
permitted buyer or transferee of the assets described in clauses (iv) and (v)
of this Section 4.A shall be required to execute and deliver Wendy’s then
current standard form of franchise agreement. 
The foregoing rights of first refusal shall be binding upon any buyer or
transferee. As used herein, the term “Equity

 

22

 

Interests” means
any shares of capital stock or other ownership or equity interests or
securities, whether voting or non-voting, including any securities convertible
into or exercisable or exchangeable for shares of capital stock or other
ownership or equity interests or securities (and including, with respect to
DavCo Restaurants, shares of Class C Common 
Stock and shares of Preferred Stock).

 

B.                                     As
used herein, the term “Permitted Asset Transfer” means (i) the
sale of any assets relating to a Restaurant that has been closed with Wendy’s
consent, (ii) the sale and leaseback or other financing
transaction, so long as Franchisees retain the right to operate each such
Restaurant as a Wendy’s, of not more than a total of fifteen (15) individual
Restaurants provided that each such sale/leaseback or other financing
transaction is a single transaction and (iii) the pledge of assets
permitted under Section 14.B hereof.

 

C.                                     If
any of the DavCo Parties or the Control Block Principals (a “Transferor”)
desires to make or suffer any of the Proposed Transfers described in
Section 4.A, the Transferor shall notify Wendy’s in writing of the
Proposed Transfer and shall provide to Wendy’s such information and documentation
relating to the Proposed Transfer and the prospective transferee as Wendy’s may
require, including but not limited to, all material information provided to the
prospective transferee by the Transferor. 
Wendy’s shall have the right and option, exercisable within forty-five
(45) days after receipt by Wendy’s of such written notification, all
information and documentation which the Transferor has provided to the
prospective transferee and which the Transferor has received from the
prospective transferee, audited financial statements for the Transferor,
audited financial statements for the prospective transferee to the extent they
exist (otherwise financial statements from the prospective transferee certified
by its president or chief financial officer), and all other information
required by Wendy’s then-existing transaction form and as may be specifically
required in Wendy’s then-current transaction policy, to send written notice to
the Transferor that Wendy’s intends to purchase the Transferor’s interest or
assets on the same terms and conditions as those offered by the prospective
transferee.  The information to be
supplied by the Transferor and required by Wendy’s shall be accompanied by (i)
a written representation and warranty from the Transferor that it has provided
Wendy’s with all of the information required under this Section 4.C, and
that such information is true, accurate and complete; and (ii) if the
Transferor is not an individual, an appropriate resolution of its board of
directors (or other applicable owners, investors, or the like) approving the
proposed Transfer, or other evidence satisfactory to Wendy’s of the
Transferor’s intent to consummate the transaction.  Further, if Wendy’s elects to exercise its right and option
hereunder, notwithstanding anything in the offer, Wendy’s shall be entitled to
conduct due diligence of the scope customary for transactions of the type
proposed in the offer for a period of not less than sixty (60) days, commencing
upon the date of Wendy’s notice to the Transferor of Wendy’s election to
purchase pursuant to this Section 4.C. 
Further, in the event Wendy’s elects to exercise its option hereunder,
the offer shall not contain any provision or condition, the effect of which
would

 

23

 

be to increase the cost
to, or otherwise change the economic terms imposed on Wendy’s, as a result of
the substitution of Wendy’s for the prospective transferee, or as a result of
compliance with the procedures set forth herein with respect to Wendy’s right
of first refusal.  In the event that
Wendy’s elects to exercise its right and option hereunder, closing on such
purchase must occur within the later of: 
(i) sixty (60) days from the date of notice to Transferor of the
election to purchase by Wendy’s; or (ii) such period as may have been
provided in the offer.  Any material
change in the terms of any offer shall constitute a new offer subject to the
same rights of first refusal by Wendy’s as in the case of the initial offer,
and notice of any such material change shall be provided in writing by the
Transferor promptly to Wendy’s.  Failure
of Wendy’s to exercise the right and option afforded by this Section 4
shall not constitute a waiver of any other provision of this Amended Consent to
Assignment, including all of the requirements of this Section 4, with
respect to a Proposed Transfer.  The
Transferor shall not execute any contract or accept any offer to purchase any
interest, unless the provisions of this Section 4 have been satisfied.

 

In the event the
consideration, terms and conditions offered by a third party are such that
Wendy’s may not reasonably be required to furnish the same consideration,
terms, and conditions, then Wendy’s may purchase the interest proposed to be
sold for the reasonable equivalent in cash. 
If the parties cannot agree within a reasonable time on the cash
consideration, an independent appraiser shall be designated by the Transferor
from a list of three independent appraisers selected by Wendy’s, and that appraiser’s
determination of the reasonable equivalent cash amount shall be binding.

 

D.                                    The
rights of first refusal set forth in this Amended Consent to Assignment shall
be in addition to and not in limitation of the rights of first refusal set
forth in the Franchise Contracts and the rights set forth in Section 5 and
Section 9 hereof.

 

5.                                       Consent Required.  From and after the Initial Consent Date,
Wendy’s prior written consent shall be required in connection with any Transfer
of (i) any interest in the Control Block Shares pursuant to
Sections 3.C(2), 3.C(4), 3.C(5) and 3.C(6) hereof, (ii) the
Franchise Contracts, (iii) the Wendy’s business or the assets of
the business, in whole or in part, by DavCo Operations or DavCo Restaurants
(except that Wendy’s prior written consent shall not be required in connection
with a Permitted Asset Transfer), (iv) any direct or indirect
Equity Interest in DavCo Operations or DavCo Restaurants, including the
issuance of any Equity Interests in any private or public offering of Equity
Interests by either of DavCo Operations or DavCo Restaurants, or (v) any
interests in connection with any change in the structure or ownership of any of
such entities, whether any of the foregoing occurs voluntarily, by operation of
law or otherwise, which consent shall not be unreasonably withheld if the
transferor and transferee comply with Section 13.3 of the New Franchise
Agreements; provided, however, that Wendy’s prior written consent
shall not be required for (w) any Transfer by the holders thereof
of outstanding Class A Common Stock, Class B Common Stock,
Subordinated Notes or EISs (other than Control Block Shares to the extent
provided in clause (i) above), (x) the issuance of Common
Stock or EISs pursuant to the LTIP, the Reinvestment Plan or any other employee

 

24

 

stock incentive plan
adopted by DavCo Restaurants and that has been approved by Wendy’s, (y) the
exchange of Class A Common Stock, Class B Common Stock or
Subordinated Notes for EISs (other than Control Block Shares, to the extent
provided in clause (i) above, and provided that any such exchange of Class B
Common Stock for EISs does not result in a violation of Section 3.A), or (z)
the Transfer of any securities resulting from the repurchase by DavCo
Restaurants of shares of Class B Common Stock from CVC for cash on hand
and a portion of the proceeds of the Offering, including the exercise of an
over-allotment option granted for EISs offered in the Offering as described in
the final prospectus distributed in connection with the Offering.

 

6.                                       Indemnification.  The DavCo Parties (individually and
collectively, “Indemnitors”) hereby agree, jointly and severally, to
indemnify and hold Wendy’s and Wendy’s subsidiaries and affiliates (and their
respective directors, officers, employees and agents) harmless from and against
any and all claims, damages or liabilities (“Claims”) arising directly or
indirectly from, as a result of, or in connection with, the Transactions, the
Offering, any formal or informal exercise of rights or remedies by persons
other than Wendy’s, the underwriters’ activities, or DavCo Restaurants’
relationship with its investors and the breach of any representation, warranty
or covenant contained in this Amended Consent to Assignment or in any of the
documents referred to herein or as part of the Transactions, as well as all
costs and expenses (including attorneys’ fees and expenses) of defending
against any such Claims, such indemnification to be paid on a current basis as
any such costs or expenses are incurred. 
The indemnification obligations contained herein shall not be exclusive
of or affect any other rights or remedies (including the right to terminate the
Franchise Contracts) that Wendy’s may have hereunder or under the Franchise
Contracts or any other agreement; provided, however, that upon
the occurrence of the Transaction Closing the preceding indemnification
agreement of Citicorp shall be subject to the limitations set forth in
Section 39.

 

7.                                       Expenditures; Limitations on Distributions and
Payments.

 

A.                                   If
the Transaction Closing shall occur, Franchisees shall invest an aggregate of
$7,500,000 (approximately $50,000 per store) to complete certain upgrades and
remodeling at the currently existing Restaurants.  This amount shall be expended, in accordance with Franchisees’
business plan referred to below, over a three (3)- year period as follows:  (i) $4,000,000 during
Franchisees’ fiscal year ending September 30, 2005, (ii) an
additional $2,000,000 during Franchisees’ fiscal year ending September 30,
2006, and (iii) an additional $1,500,000 during Franchisees’ fiscal
year ending September 30, 2007; provided, however, that each
of such time periods may be extended for up to an additional six (6) months if
necessary as a result of matters that delay such expenditures that are not
within Franchisees’ control, such as receipt of construction permits, but any
such extension shall apply only with respect to the expenditures on the
Restaurant specifically affected by such delay.  Franchisees shall submit to Wendy’s not later than thirty (30)
days following the end of each such fiscal year such detail as Wendy’s shall
request to evidence such expenditures. 
The upgrades and remodeling shall be part of a business plan prepared
annually by Franchisees and approved by Wendy’s.  A copy of the format for such business plan is attached

 

25

 

hereto as Exhibit F.  Nothing herein is intended to limit in any
way Franchisees’ obligation to comply with any and all other system
requirements and changes that may be applicable to the system and these
upgrades and remodeling requirements are in addition thereto.

 

B.                                     (1)                                  Franchisees
shall not make or permit to be made in respect of any Equity Interest (i)
any distribution to any person, including by way of dividend, redemption,
return of capital or otherwise or (ii) any payment under any
guaranty issued by either Franchisee, or any entity controlled directly or
indirectly by DavCo Restaurants, with respect to any distribution referred to
in the preceding clause (i), which in any such case would at any time
prevent Franchisees from making any payment of any royalty fees, advertising
contributions, capital expenditures or other payments required under the
Franchise Contracts or this Amended Consent to Assignment or any payment under
any other contract or agreement with Wendy’s or any affiliate of Wendy’s
(collectively, the “Wendy’s Obligations”).

 

(2)                                  In
addition, Franchisees shall not make or permit to be made any distribution or
payment described in clause (i) or (ii) of Section 7.B(1) if at the time
there exists a failure to pay when due of any of the Wendy’s Obligations,
giving effect, in determining when any such obligation is due, to any grace period
given by Wendy’s prior to issuance of a notice of default in respect thereof,
but without giving effect to any cure period available under the agreements
applicable to such obligation following Wendy’s issuance of a notice of default
in respect thereof.

 

8.                                       Noncompetition.  From and after the Initial Consent Date,
none of DavCo Operations, DavCo Restaurants, or the Control Block Principals or
any other entity controlling, controlled by or under common control with any of
them shall directly or indirectly have any interest which violates the
noncompetition provision of the Franchise Contracts; provided, however,
that for so long as CVC has any interest in DavCo Restaurants or DavCo
Operations, Citicorp Venture Capital LTD shall comply with the following modified
noncompetition provision: Citicorp Venture Capital LTD shall have no interest
which violates the noncompetition provision of the Franchise Contracts, except
the following:  (i) any
interest of Citicorp Venture Capital LTD which existed prior to February 10,
1993; and (ii) any interest held by any affiliate or holding
company of Citicorp Venture Capital LTD in connection with financing
arrangements.

 

9.                                       Purchase Option.  As of the Initial Consent Date, DavCo
Operations and DavCo Restaurants each granted a right and option (the “Option”)
to Wendy’s, which grant is hereby reaffirmed, to purchase, at any time
following the Initial Consent Date, at the election of Wendy’s:  (i) all the outstanding equity
interests in DavCo Operations and/or (ii) all of the assets of
DavCo Operations and all of the assets of DavCo Restaurants relating to the
business, ownership and operation of Wendy’s Old Fashioned Hamburgers
Restaurants.  The terms of the Option,
including the exercise price, terms and conditions of exercise are set forth in
this

 

26

 

Section 9.  DavCo
Operations and DavCo Restaurants acknowledge and agree that the Option is
irrevocable and coupled with an interest.

 

A.                                   The
Option shall be exercisable only in the event that: (i) DavCo
Restaurants Transfers, permits a Transfer or suffers a Transfer of any direct
or indirect interest in DavCo Operations or DavCo Restaurants in violation of
the terms and conditions of any right of first refusal held by Wendy’s, (ii) there
occurs any Transfer of any interest by or in DavCo Restaurants or DavCo
Operations in violation of Section 5 hereof, (iii) there
occurs any other Transfer pursuant to, or any demand for payment made under,
any guaranty by DavCo Operations or DavCo Restaurants, (iv) there
occurs a Change of Control Event (as defined in Section 10) that has not
been cured in accordance with Section 10 hereof, or (v) there
occurs a breach of the provisions of Section 2.M, Section 2.N or
Section 2.O hereof (each, an “Option Event”).  The rights set forth in this Section 9 are in addition to
and not in limitation of any other rights or remedies of Wendy’s set forth in
this Amended Consent to Assignment, including any rights or remedies of Wendy’s
for breach by any of the DavCo Parties of any provision hereof, which shall be
independent of the provisions of this Section 9.

 

B.                                     The
Option granted by this Section 9 shall continue in full force and effect
until the expiration or termination of the last to expire or terminate of the
Franchise Contracts and the full payment and satisfaction by Franchisees of all
of their obligations thereunder.

 

C.                                     In
the event that the Option becomes exercisable as provided in Section 9.A,
Wendy’s shall have the right to purchase at Fair Market Value (as defined
herein), at Wendy’s election, (i) all of the assets of DavCo
Operations, (ii) all of the assets of DavCo Restaurants relating to
the business, ownership and operation of Wendy’s Old Fashioned Hamburger
Restaurants and/or (iii) all of the outstanding equity interests in
DavCo Operations (collectively, the assets and/or equity interests to be
acquired by Wendy’s pursuant to the Option are referred to hereinafter as the “Option
Assets”).  Wendy’s shall not
be obligated to assume any liabilities of DavCo Operations or DavCo Restaurants
in connection with the purchase of the Option Assets, all of which shall be
sold free and clear of all liens, claims and encumbrances.

 

D.                                    In
the event the Option becomes exercisable, DavCo Operations or DavCo Restaurants
shall send a written notice to Wendy’s that the Option has become exercisable
(the “DavCo
Notice”).  Wendy’s shall have
forty-five (45) days from the date of receipt of the DavCo Notice to give
written notice to DavCo Operations and/or DavCo Restaurants as applicable (the
“Notice
of Exercise”) of Wendy’s election to exercise the Option.  If Wendy’s does not give a Notice of
Exercise within forty-five (45) days of receipt of the DavCo Notice with
respect to an Option Event, the Option shall no longer be exercisable with
respect to such Transfer, but shall continue in full force and effect and be
exercisable in the event of the occurrence of any other Option Event.

 

27

 

E.                                      If
Wendy’s elects to exercise the Option, Wendy’s shall deliver a Notice of
Exercise, which shall specify the Fair Market Value of the Option Assets.  A Notice of Exercise may be given at any
time in the event that DavCo Restaurants fails to deliver a DavCo Notice when
required.

 

F.                                      In
the event that DavCo Restaurants disagrees with the Fair Market Value of the
Option Assets as proposed by Wendy’s in its Notice of Exercise, DavCo
Restaurants shall within ten (10) days of the date the Wendy’s Notice of
Exercise is given, send a notice to Wendy’s (“DavCo Value Notice”) stating
the Fair Market Value of the Option Assets as determined by DavCo Restaurants,
if such Fair Market Value is higher than the Fair Market Value established by
Wendy’s.  For a thirty (30) day period
after the delivery of the DavCo Value Notice (“Negotiation Period”), Wendy’s
and DavCo Restaurants shall endeavor to negotiate in good faith the Fair Market
Value of the Option Assets.  If Wendy’s
and DavCo Operations are unable to agree on the Fair Market Value of the Option
Assets within the Negotiation Period each of Wendy’s and DavCo Operations shall
within thirty (30) days after expiration of the Negotiation Period (“Appointment
Period”) appoint one qualified appraiser with experience in
determining the value of assets and/or equity interests, such as the Option
Assets.  If either of Wendy’s or DavCo
Restaurants does not appoint an appraiser during the Appointment Period, the
appraiser who has been appointed shall make the sole determination of the Fair
Market Value of the Option Assets.  If
each of Wendy’s and DavCo Restaurants appoints an appraiser, the two appraisers
so appointed shall select a third appraiser within thirty (30) days of the
appointment of the last of the two appraisers so appointed.  The three appraisers shall then render a
decision within sixty (60) days of the appointment of the third appraiser as to
the Fair Market Value of the Option Assets.

 

G.                                     A
closing (the “Closing”) shall be held no later than the sixtieth (60th) day
after the date of the determination of Fair Market Value at a place and time to
be determined by Wendy’s and DavCo Restaurants (“Closing Date”).  If no Closing Date is agreed to by Wendy’s
and DavCo Restaurants, the Closing shall take place on the sixtieth (60th)
day after the determination of Fair Market Value or if such date is not a
business day on the next succeeding business day.  At the Closing, DavCo Operations and DavCo Restaurants, as
applicable, shall deliver good and marketable title to all of the Option Assets
to Wendy’s free and clear of all liens and encumbrances in return for a cash
payment by Wendy’s of the Fair Market Value.

 

H.                                    Notwithstanding
any provision of this Section 9 to the contrary, Wendy’s shall have the
right for a forty-five (45) day period (“Due Diligence Period”) after the final
determination of Fair Market Value to conduct due diligence on DavCo Operations
and DavCo Restaurants of the scope customary for transactions of the size and
complexity of the Option exercise.  DavCo
Operations and DavCo Restaurants shall provide all information relating to
their respective assets and businesses requested by Wendy’s during the Due
Diligence Period.  Prior to the

 

28

 

termination of the Due
Diligence Period Wendy’s shall have the right in its sole discretion to
withdraw its Notice of Exercise.  If
Wendy’s withdraws its Notice of Exercise, the Option shall no longer be
exercisable with respect to such Option Event but shall continue in full force
and effect and be exercisable in the event of any other Option Event.

 

I.                                         For
purposes of this Section 9, “Fair Market Value” shall mean the amount
that would be realized by DavCo Operations and/or DavCo Restaurants if the
Option Assets were sold to an unrelated purchaser in an arms’ length
transaction where neither the purchaser nor the seller was under economic
compulsion to enter into the transaction with due consideration given to all
relevant indicators of such Fair Market Value.

 

10.                                 Control of DavCo Restaurants.  If at any time one person (as defined in
Section 3(9) of the Securities Exchange Act of 1934, as amended, and
Section 13(d)(3) of such Act) (other than the Control Block Principals and
Permitted Transferees) directly or indirectly owns, controls, exercises control
or direction or is the beneficial owner (as defined in such Act and the rules
and regulations thereunder) of equity or voting interests in DavCo Restaurants
(including any such equity or voting interests held as a component of an EIS)
constituting more than twenty percent (20%) of the total economic value of the
total outstanding equity interests, or more than twenty percent (20%) of the
total outstanding voting interests, in DavCo Restaurants (a “Change of
Control Event”) and (i) DavCo Restaurants does not,
within ten (10) days of the date DavCo Restaurants first had knowledge of such
ownership or control, take such steps as may be permitted under the Amended and
Restated Certificate of Incorporation  of DavCo Restaurants in the form attached
hereto as Exhibit A (or in such other form as shall have been
approved by Wendy’s) to reduce such interest or control to twenty percent (20%)
or lower or (ii) such ownership or control remains at more than
twenty percent (20%) for more than ninety (90) days after the date DavCo
Restaurants first had knowledge of such ownership or control, then such Change
of Control Event shall constitute a default by Franchisees under the Franchise
Contracts, in addition to any other rights of Wendy’s hereunder.  DavCo Restaurants shall give written notice
to Wendy’s of the occurrence of any of the events described in the preceding
sentence not later than five (5) days following the date of such occurrence.

 

11.                                 Letter of Credit.  Subsequent to the execution and delivery of
the Initial Consent, the Franchisees delivered to Wendy’s and WNAP, as
beneficiaries, an Irrevocable Standby Letter of Credit in the face amount of
One Million Dollars ($1,000,000) (the “DavCo Letter of Credit”) which replaced the
letter of credit issued to Wendy’s pursuant to the Existing Franchise
Agreements.  Wendy’s and Franchises
agree that such DavCo Letter of Credit may be replaced at any time and from
time to time with a substitute letter of credit issued by a national bank
acceptable to Wendy’s and WNAP, which substitute letter of credit shall contain
the same terms required by this Amended Consent to Assignment.  Any reference herein to the DavCo Letter of
Credit shall include any such substitute letter of credit.  The initial issuer of the DavCo Letter of Credit
and any issuer of a substitute DavCo Letter of Credit shall be referred to
herein as the “Issuing Bank.”

 

29

 

A.                                   Any
DavCo Letter of Credit shall include an “evergreen clause” providing that it shall be
automatically extended for an additional period of one year from the present or
future expiration date, unless at least forty-five (45) days prior to such
date the Issuing Bank notifies DavCo Operations, Wendy’s and WNAP, by
registered mail, return receipt requested, that it has decided not to extend
the DavCo Letter of Credit beyond the current expiration date.  In the event Wendy’s and WNAP are so
notified, any unused portion of the credit shall be available to Wendy’s and/or
WNAP upon presentation of a sight draft for forty-five (45) days after
receipt by DavCo Operations, Wendy’s and WNAP as shown on the signed return
receipt.  Wendy’s and WNAP shall place
any unused portion of the credit so drawn in a cash collateral account to
secure the obligations of Franchisees under the Franchise Contracts and each of
DavCo Restaurants and DavCo Operations hereby grants to each of Wendy’s and
WNAP a security interest in such cash collateral accounts.  Each of Wendy’s and WNAP may draw against
the cash collateral account held by it for any amounts due to it from DavCo
Operations and/or DavCo Restaurants. 
Upon the termination or expiration of the Franchise Contracts and the
full payment and satisfaction by Franchisees of all of their obligations
thereunder, the balance, if any, in the cash collateral account(s) shall be
returned to Franchisees.  Franchisees
shall from time to time execute and deliver to Wendy’s and WNAP such further
documents and instruments as Wendy’s and WNAP may request with respect to such
cash collateral account(s).

 

B.                                     Upon
Franchisees’ request, following (i) the expiration or termination
of the last to expire or terminate of the Franchise Contracts and the full
payment and satisfaction by Franchisees of all of their obligations thereunder
or (ii) subject to the prior written consent of Wendy’s, the
assignment by Franchisees of all of their obligations under the Franchise
Contracts and the assumption thereof by a third party in accordance with the
terms of such Franchise Contracts and this Amended Consent to Assignment,
Wendy’s and WNAP shall agree to the cancellation and termination of the DavCo
Letter of Credit.

 

C.                                     Either
of Wendy’s or WNAP may draw under the DavCo Letter of Credit by presenting to
the Issuing Bank its draft drawn at sight, together with its certificate (the “Certificate”)
purportedly signed by an officer of Wendy’s or WNAP certifying that:  (i) payment to (Wendy’s or WNAP)
of $            is
due under the Franchise Contracts and has not been paid; and (ii) not
less than five (5) business days prior to the date of delivery of the
Certificate (to the Issuing Bank), (Wendy’s or WNAP) has delivered written
notice to Franchisees of its intention to demand payment under the DavCo Letter
of Credit.  There shall be no other
conditions or restrictions upon the right of Wendy’s or WNAP to payment under
the DavCo Letter of Credit.  Partial
drawings (and multiple drawings) shall be permitted.

 

D.                                    The
DavCo Letter of Credit shall be subject to the Uniform Customs and Practice for
Documentary Credits of the International Chamber of Commerce in effect as of
the date the DavCo Letter of Credit is issued.

 

30

 

E.                                      The
right of Wendy’s or WNAP to payment under the DavCo Letter of Credit shall not
obligate Wendy’s or WNAP to exercise such right in order to cure a payment
default under the Franchise Contracts, and the availability of the DavCo Letter
of Credit shall not be construed as a cure or ability to cure any payment
default under the Franchise Contracts.

 

F.                                      A
material default under the Franchise Contracts shall occur if the DavCo Letter
of Credit expires or is revoked and an acceptable substitute letter of credit
has not been issued, as provided herein.

 

G.                                     If
the Transaction Closing shall occur:  (i) concurrently
therewith, Franchisees shall cause the face amount of the DavCo Letter of
Credit to be increased to Three Million Dollars ($3,000,000); and (ii) effective
as of January 1, 2007, Franchisees shall cause the face amount of the
DavCo Letter of Credit to be increased to Four Million Dollars ($4,000,000).

 

H.                                    Franchisees
shall cause the DavCo Letter of Credit to be maintained at the then required
amount as set forth above and, to the extent of any drawings under the DavCo
Letter of Credit which reduce the amount available to be drawn under the DavCo
Letter of Credit, shall, within twenty (20) days after any such reduction,
cause the DavCo Letter of Credit to be amended such that the full amount of the
then required amount of the DavCo Letter of Credit is available to be drawn.

 

12.                                 Certain Restaurant Covenants.

 

A.                                   Franchisees
shall discontinue the sale of bone-in chicken at one-half of their Wendy’s
Restaurants currently selling bone-in chicken by October 1, 2004, and,
unless Franchisees demonstrate that such discontinuation caused and will
continue to cause a material adverse financial impact on Franchisees, shall
discontinue the sale of bone-in chicken at one-half of the remaining Wendy’s
Restaurants by October 1, 2005, and shall discontinue the sale of bone-in
chicken at all Wendy’s Restaurants by October 1, 2006.  Wendy’s agrees that provided Franchisees
satisfy all operational requirements associated with the sale of chicken
strips, Franchisees shall be authorized to sell chicken strips as soon as
practicable.

 

B.                                     Franchisees
agree that any new Restaurant opened by Franchisees after the Initial Consent
Date shall be built with Wendy’s fascia color then in use (and not the yellow
fascia previously used by Franchisees for new Restaurants); it being understood
and agreed that the foregoing requirement may be subject to local ordinances
and certain lease requirements and that Franchisees shall not be in violation
of this Section 12.B as a result of complying with local ordinances and/or
lease requirements concerning color schemes provided the lease is an arm’s
length lease entered into with an unrelated third party and Franchisees have
made good faith efforts to comply with this provision. 

 

31

 

13.                                 Additional Representations and Warranties.  Each of DavCo Operations, DavCo Restaurants,
Citicorp, and the Current Principals represents, warrants and covenants, in
addition to any provision of any other agreement with Wendy’s, that (i) the
Transactions will not result in a dissolution, liquidation or extinction of
DavCo Operations or DavCo Restaurants and will have no adverse effect on
agreements with and obligations or liabilities to Wendy’s or WNAP under the
Franchise Contracts as amended hereby and the same will continue in full force
and effect without further action by any of the entities involved in the
Transactions or Wendy’s; (ii) none of the completion of the
Transactions or any rule of law, regulation, listing requirement, or otherwise
of the United States, any state of the United States or the American Stock
Exchange, or any other public or private entity, applicable to the Transactions
shall amend, require modification of or supersede, or adversely affect, any
agreement by any Franchisee with Wendy’s or the exercise by Wendy’s of any
right or remedy held by it hereunder or under any Franchise Contracts; and (iii) the
Offering, and all incidents thereto, will result in no obligation or liability
on the part of Wendy’s to any third party. 
The Control Block Principals and each of the other DavCo Parties shall
enter into any agreements or arrangements between or among themselves that may
be necessary or advisable in order to permit them to satisfy and perform their
obligations hereunder, including the provisions of Section 3.  Any Transfer or attempted Transfer of the
shares or other equity interests of DavCo Operations or DavCo Restaurants in
violation of the provisions of this Amended Consent to Assignment shall be null
and void ab
initio.

 

14.                                 Limitations on Granting Liens; Indebtedness;
Guaranties.

 

A.                                   Set
forth on Exhibit
G hereto are (i) a list of Franchisees’ existing secured
and unsecured lenders, the maximum amount of indebtedness permitted under
Franchisees’ loan or credit agreement with such lenders, and the Liens granted
in Franchisees’ personal and real property or assets to secure such
indebtedness (the “Existing Liens”), and (ii) on a pro
forma basis as of and giving effect to the Transaction Closing, a list of
Franchisees’ secured and unsecured lenders, the maximum amount of indebtedness
to be permitted under Franchisees’ loan or credit agreement with such lenders,
and the Liens to be granted in Franchisees’ personal or real property or assets
to secure such indebtedness. For purposes of this Agreement, “Lien”
means any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, lien, charge, claim, security interest, easement or encumbrance,
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever (including any lease or title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of, or agreement to give, any financing
statement perfecting a security interest under the Uniform Commercial Code or
comparable law of any jurisdiction).

 

B.                                     Franchisees
agree that unless and until the Transaction Closing shall occur any Lien (other
than the Existing Liens) on Franchisees’ personal or real property or assets
shall be specifically subject to the terms of the Franchise Contracts and this
Amended Consent to Assignment and shall require the prior written consent of
Wendy’s.  If the Transaction Closing
shall occur, Franchisees may thereafter have

 

32

 

outstanding from time to
time indebtedness or other obligations secured by Liens on Franchisees’
personal or real property or assets, provided  that Franchisees
shall not secure any indebtedness or other obligations by a Lien on any of the
Franchise Contracts or the Proprietary Marks (as defined in the Franchise
Contracts) and, DavCo Restaurants shall not secure any indebtedness or other
obligations by a Lien on the stock of DavCo Operations.

 

C.                                     (1)                                  If
the Transaction Closing shall occur, the Subordinated Notes shall provide that,
except in the event of a bankruptcy or insolvency which, pursuant to the terms
of the Subordinated Notes, results in the maturity of the principal amount of
the Subordinated Notes being automatically accelerated and the principal amount
of the Subordinated Notes automatically becoming due and payable, the maturity
of the principal amount of the Subordinated Notes may not be accelerated and
the principal amount will not become due and payable, prior to the scheduled
maturity date, for a period beginning on the date notice is provided to Wendy’s
by the trustee with respect to the occurrence of events of default and ending
45 days after such date.

 

(2)                                  If
the Transaction Closing shall occur, DavCo Restaurants shall be the sole
obligor under the Subordinated Notes and any guaranty of the Subordinated Notes
by DavCo Operations, or by any other direct or indirect subsidiary of DavCo
Restaurants which now or hereafter owns or operates any Restaurant, shall:  (i) be a guaranty of payment, (ii) be
unsecured; (iii) be governed by the laws of a specific state of the
United States, without regard to the conflict of laws principles of such state,
and the laws of the United States; and (iv) provide that it may be
enforced only in a state or federal court located in the United States.

 

D.                                    Franchisees
shall be in default under this Amended Consent to Assignment and under the
Franchise Contracts, entitling Wendy’s to exercise all of its rights and
remedies hereunder and thereunder, in the event a default shall occur under any
other agreement, document or instrument to which Franchisees are a party and
such default is not cured within any applicable grace period or waived in
writing, and such default (i) involves the failure to make any payment
when due in respect of any indebtedness or contingent liabilities of
Franchisees in excess of One Million Dollars ($1,000,000) in the aggregate, or
(ii) causes such indebtedness or contingent liabilities or a portion
thereof in excess of One Million Dollars ($1,000,000) in the aggregate to
become due prior to its stated maturity or prior to its regularly scheduled
dates of payment, or (iii) permits any holder of such indebtedness or
contingent liabilities or a trustee to cause such indebtedness or contingent
liabilities or a portion thereof in excess of One Million Dollars ($1,000,000)
in the aggregate to become due prior to its stated maturity or prior to the
regularly scheduled dates of payment and such default is not cured or waived
within thirty (30) days after the occurrence thereof; provided, however,
that the following shall not constitute a default under this
Section 14.D:  (x) a
default with

 

33

 

respect to Franchisees’
obligations under the Restaurant leases or subleases which Franchisees
previously assigned to Wen America LLC or (y) a third party claim
or suit (other than a third party claim or suit with respect to a default
described in the preceding clauses (i) through (iii)) against Franchisees,
until such claim or suit is settled or finally adjudicated.  For purposes of this Section 14.D, an
acceleration forbearance period in accordance with the terms of the Subordinated
Notes shall not be deemed to be a cure or grace period.

 

15.                                 General Release.  On the Initial Consent Date the DavCo
Parties delivered, and contemporaneously with the execution and delivery
hereof, the DavCo Parties are executing and delivering, to Wendy’s the separate
General Release of All Claims in the form which is attached hereto as Exhibit H,
executed by the parties indicated thereon. 
The DavCo Parties further agree to execute and deliver to Wendy’s a
General Release of All Claims contemporaneously with the Transaction Closing,
executed by the parties indicated thereon.

 

16.                                 Modification of Franchise Contracts; Breach or Default.  This Amended Consent to Assignment is
intended to supplement the Franchise Contracts and the terms hereof shall be
deemed incorporated therein.  In the
event of a conflict between the Franchise Contracts and this Amended Consent to
Assignment, this Amended Consent to Assignment will control, provided every
reasonable effort is made to read this Amended Consent to Assignment as
supplementing the Franchise Contracts, except as specifically stated
herein.  All references in the Franchise
Contracts to the Initial Consent shall, from the Initial Consent Date to the
date hereof mean and refer to the Initial Consent, and from and after the date
hereof mean and refer to this Amended Consent to Assignment.  Any breach of the terms of or default under
this Amended Consent to Assignment shall constitute a default hereunder and
under the Franchise Contracts entitling Wendy’s to exercise all of its rights
and remedies hereunder and thereunder.

 

17.                                 Future Consents; Follow-on Offering.

 

A.                                   The
DavCo Parties acknowledge and agree that Wendy’s may or may not in the future
approve offerings and Transfers under different terms, conditions and policies
existing at that time and that neither the Initial Consent nor this Amended
Consent to Assignment shall be relied upon in future transactions as limiting
Wendy’s position or the conditions associated with Wendy’s consent and/or any
waiver of its right of first refusal.

 

B.                                     (1)                                  Wendy’s
acknowledges that DavCo Restaurants may in the future, after the Transaction
Closing, desire to offer and sell additional EISs or Class A Common Stock to
the public in a public offering.  As
used herein, the term “Follow-on Offering” means a public offering
in the United States by DavCo Restaurants of EISs or Class A Common Stock (or a
private placement of EISs or Class A Common Stock in the United States in
accordance with Rule 144A of the Securities Act of 1933, as amended),
which occurs after the Transaction Closing, is consummated not later than
December 31,

 

34

 

2015 and all of
the net proceeds of which are used in connection with the Wendy’s business.

 

(2)                                  Wendy’s
hereby waives any right of first refusal or purchase option under the Franchise
Contracts or this Amended Consent to Assignment with respect to a Follow-on
Offering, subject to the satisfaction by the DavCo Parties of all of the terms
and conditions set forth in Section 17.B(3).

 

(3)                                  (a)                                  Wendy’s
hereby waives its right to consent under the Franchise Contracts and this
Amended Consent to Assignment with respect to a Follow-on Offering, subject to
the satisfaction by the DavCo Parties of all of the following terms and
conditions with respect to any such Follow-on Offering:  (i) at the time of the closing
of the Follow-on Offering, there exists no material breach under the Franchise
Contracts or this Amended Consent to Assignment, (ii) upon
consummation of the Follow-on Offering, the Control Block Principals will not
be in violation of the ownership obligations under Section 3 of this
Amended Consent to Assignment, subject to the provisions of
Section 17.B(3)(b), (iii) the Follow-on Offering will not
result in a Change of Control Event, (iv) there will be no change
in the corporate structure of DavCo Operations or DavCo Restaurants as a result
of the Follow-on Offering, (v) the Follow-on Offering will not
materially and adversely affect the rights of Wendy’s under the Franchise
Contracts or this Amended Consent to Assignment, (vi) Wendy’s is
given the right to comment on the prospectus and the offering documents
relating to the Follow-on Offering, such prospectus and offering documents
contain such disclaimers in such places as Wendy’s may request and Wendy’s has
consented to the specific use and location of Wendy’s logo and trademarks
therein, (vii) at the time of the closing of the Follow-on Offering, the
DavCo Parties make and deliver to Wendy’s all representations and warranties
with respect to the prospectus and the offering documents used in the Follow-on
Offering that they are making in this Amended Consent to Assignment with
respect to the prospectus and the offering documents used in the Offering, (viii) prior
to the filing of any prospectus with respect to the Follow-on Offering with the
U.S. Securities and Exchange Commission (“SEC”) or the commencement of any Follow-on
Offering pursuant to Rule 144A, Franchisees and the Control Block Principals
execute and deliver to Wendy’s an indemnification agreement in substantially
the form of Section 6 hereof applicable to the Follow-on Offering and a
release in the form of Exhibit H to this Amended Consent
to Assignment, (ix) at the time of the closing of the Follow-on
Offering, Franchisees pay

 

35

 

all legal fees and any
other third-party costs of Wendy’s incurred in connection with the Follow-on
Offering, and (x) Franchisees shall have given to Wendy’s prior written
notice of the proposed occurrence and specific details, to the extent
available, of any Follow-on Offering (the “Follow-on Offering Notice”) not less than
thirty (30) days prior to the earlier to occur of the filing of the preliminary
prospectus with respect thereto with the SEC or the commencement of such
Follow-on Offering (the “Follow-on Offering Date”), together with
all relevant information evidencing that the terms and conditions set forth in
this Section 17.B(3) have been satisfied with respect to such Follow-on
Offering or, with respect to the conditions that must be satisfied as of the
closing of such Follow-on Offering, will be satisfied as of such date (the “Follow-on
Offering Information”); provided, however, that if
such Follow-on Offering is to be made based upon a takedown of securities from
an effective shelf registration statement using a prospectus supplement (a “Shelf
Takedown”), Franchisees shall have given to Wendy’s the Follow-on
Offering Notice and the Follow-on Offering Information not less than ten (10)
business days prior to the Follow-on Offering Date (instead of not less than
thirty (30) days prior thereto).

 

(b)                                 The
waivers by Wendy’s set forth in Section 17.B(2) and
Section 17.B(3)(a) are also subject to the following terms and conditions:

 

(i)                                     If,
solely as a result of the dilutive effects of the issuance of Common Stock in a
proposed Follow-on Offering which is to be consummated prior to the Exchange
Date, the Control Block Principals would own less than the 10% Block, such
reduction in ownership of Common Stock below the 10% Block shall require the
prior written consent of Wendy’s, which consent will be not be unreasonably
withheld; provided, that it shall be deemed reasonable for Wendy’s to require
as a condition of such consent that (x) the Control Block Principals
shall own, after giving effect to the Follow-on Offering, a number of issued
and outstanding shares of Common Stock representing not less than eight percent
(8%) of the total economic value of the total outstanding equity interests (on
a fully-diluted basis), and not less than eight percent (8%) of the total
outstanding voting interests (on a fully-diluted basis), in DavCo Restaurants
(the “8%
Block”), and (y) the Control Block Principals shall own the
10% Block not later than and at all times following the second anniversary of
such Follow-on Offering.  For purposes
of this Section 17.B(3)(b)(i), shares of Common Stock owned by Citicorp
shall not be included in calculating the 10% Block or the 8% Block, except that
such

 

36

 

shares may be included in
determining compliance with the provisions of the preceding clause (y) to
the extent permitted by Section 3.A(4).

 

(ii)                                  If,
solely as a result of the dilutive effects of the issuance of Common Stock in a
proposed Follow-on Offering which is to be consummated on or after the Exchange
Date, the Control Block Principals would own less than the 10% Block, such
reduction in ownership of Common Stock below the 10% Block shall require the
prior written consent of Wendy’s, which consent will be not be unreasonably
withheld; provided, that it shall be deemed reasonable for Wendy’s to require
as a condition of such consent that (x) the Control Block
Principals shall own, after giving effect to the Follow-on Offering, the 8%
Block, (y) the Control Block Principals shall own, after giving
effect to the Follow-on Offering, a number of shares of Common Stock
representing not less than the Post-Exchange Minimum Block, and (z) the Control
Block Principals shall own the 10% Block not later than and at all times
following the second anniversary of such Follow-on Offering.  For purposes of this
Section 17.B(3)(b)(ii), shares of Common Stock owned by Citicorp may be
included in calculating the 10% Block and the 8% Block (but not the
Post-Exchange Minimum Block).

 

(4)                                  Wendy’s
shall use its commercially reasonable efforts to review and provide comments on
the prospectus and offering documents with respect to the Follow-on Offering in
a timely manner.

 

(5)                                  In
addition to the notice and information requirements set forth in
Section 17.B(3) hereof, if at any time any of the DavCo Parties either (i)
participates in a presentation or meeting with one or more potential investors
who are considering a specific investment in DavCo Restaurants (excluding a general
informational presentation given to a group of potential investors) or (ii)
is advised by any underwriter or investment banker that DavCo Restaurants is
being specifically considered by one or more potential investors for an
investment in DavCo Restaurants and, in either such case, such investment may
be pursuant to a Follow-on Offering made pursuant to a Shelf Takedown,
Franchisees shall give to Wendy’s written notice thereof, together with such
information relating thereto as shall then be available not later than the date
of such presentation or the first business day after receipt of such advice
from the underwriter or investment banker, as the case may be; provided,
however, that notwithstanding any compliance by Franchisees with the
provisions of this Section 17.B(5), Wendy’s waiver of its right to consent
to a Follow-on Offering set forth in

 

37

 

Section 17.B(3)
hereof shall continue to be subject to satisfaction by the DavCo Parties of all
of the terms and conditions set forth in Section 17.B(3).

 

(6)                                  Any
notice or other communication to be given to Wendy’s pursuant to this
Section 17 (or pursuant to Sections 2.B(3) or 2.M) shall be given by
personal delivery or by Federal Express, UPS, Airborne or other internationally
recognized overnight courier and shall be deemed duly given only upon actual
receipt thereof by:

 

Wendy’s International,
Inc.

Office of the General
Counsel

4288 West
Dublin-Granville Road

Dublin, Ohio 43017

 

With mandatory copies to
(which shall not constitute notice):

 

Wendy’s International,
Inc.

Franchise Development

Attention:  Senior Vice President – Development

4288 West
Dublin-Granville Road

Dublin, Ohio 43017

 

and

 

Piper Rudnick LLP

Attention:  Dennis E. Wieczorek

203 North LaSalle Street,
Suite 1800

Chicago, Illinois 60601

 

or to such other persons
or such other addresses as Wendy’s shall designate in writing pursuant to
Section 19 hereof.

 

18.                                 Offering and Prospectus.  The DavCo Parties acknowledge and agree that
Wendy’s makes no representations, warranties or other statements with respect
to the accuracy of any of the representations, warranties, statements or
disclosures made by Franchisees or any other party involved in the Transactions
(including any representations or statements contained in the registration
statement, prospectus or other offering documents used or distributed in
connection with the Offering) and Wendy’s neither undertakes nor assumes any
obligation to any person (including any entity), public or private, in this
regard.  The DavCo Parties represent and
warrant to Wendy’s that (i) the registration statement relating to
the Offering, each prospectus filed therewith and all other offering documents
used or distributed in connection with the Offering shall comply with all
applicable laws and shall contain such disclaimers in such locations as Wendy’s
may request, and (ii) the registration statement relating to the
Offering, each prospectus filed therewith and any amendments thereto, at the
time of effectiveness and at

 

38

 

the closing of the
Offering will not contain any untrue statement of a material fact and will not
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however,
that the preceding representations and warranties are made by Citicorp
severally and not jointly with the other DavCo Parties and are made only with
respect to information that describes CVC and their respective equity holdings
in DavCo Restaurants.

 

19.                                 Notice.  All
notices, consents, waivers and other communications hereunder shall be in
writing.  Wendy’s and the DavCo Parties
agree that their respective notice addresses shall be as follows:

 

	
  If to Wendy’s, to:

  	
  Wendy’s International,
  Inc.

  
	
   

  	
  4288 West
  Dublin-Granville Road

  
	
   

  	
  Dublin, Ohio 43017

  
	
   

  	
  Attn.:     Franchise Legal Department

  
	
   

  	
   

  
	
  If to any of the DavCo
  Parties, to:

  	
  [Name of DavCo Party]

  
	
   

  	
  c/o DavCo Restaurants
  Inc.

  
	
   

  	
  or c/o DavCo Operations
  Inc.

  
	
   

  	
  1657 Crofton Blvd.

  
	
   

  	
  Crofton, Maryland 21114

  
	
   

  	
  Attn:  President

  

 

The parties acknowledge
and agree that notice shall be duly given if given as set forth under the
Franchise Contracts, or by any recognized overnight delivery service which
affords the sender evidence of delivery or attempted delivery.  Any notice by a means which affords the
sender evidence of delivery, or attempted delivery, shall be deemed to have
been given at the date and time of mailing or sending of such notice.  Notwithstanding the provisions of this
Section 19, the provisions of Section 17.B shall govern the giving of
all notices and communications to Wendy’s under Section 17.B,
Section 2.B(3) and Section 2.M.

 

20.                                 Limitation of Consent.  All of the DavCo Parties acknowledge and
agree that Wendy’s consent in the Initial Consent and in this Amended Consent
to Assignment is not intended to provide, and shall not be construed as
providing, Wendy’s consent (or the consent of any subsidiary of Wendy’s) with
regard to any other right or interest other than Wendy’s consent to the
Transactions.  Any other consent must be
separately obtained.

 

21.                                 Notice and Approvals of Third Parties.  The DavCo Parties warrant, represent and
confirm that they have notified any and all lenders, governmental entities, regulatory
bodies or other persons to whom notice is required to be given of, or from whom
consent or approval is required in connection with, the Transactions to the
extent required by contract or law (including any notification required under
the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended), and to
the extent necessary have given such notices and/or obtained the approval or
consents of such parties; provided, however, that the preceding
representations and warranties are made by Citicorp severally and not jointly
with the other DavCo Parties and are made only

 

39

 

with respect to such
notices, consents and approvals required to be obtained by CVC and their
affiliates.

 

22.                                 Reliance.  The DavCo
Parties hereby warrant, represent and agree that all financial and other
information which has been provided by Franchisees to Wendy’s in connection
with the Transactions is true, accurate and complete and that the DavCo Parties
have provided to Wendy’s all information, and true and correct copies of all
documents, relevant to the Transactions and Wendy’s consent hereunder; provided,
however, that the preceding representation, warranty and agreement is
made by Citicorp in all material respects and to the actual knowledge of CVC
(which shall be deemed to include the actual knowledge of any officer or agent
of Citicorp or any corporate affiliate of Citicorp).  The DavCo Parties acknowledge that Wendy’s is relying upon the
accuracy of that information in consenting to the Transactions.  The DavCo Parties agree that any material
misrepresentation as to the capitalization, financial structure,
creditworthiness, background or ownership interest of the parties involved in
the Transactions, at Wendy’s election, may be deemed by Wendy’s to be a default
hereunder and under the Franchise Contracts entitling Wendy’s to exercise all
of its rights and remedies hereunder and thereunder.

 

23.                                 No Representations by Wendy’s.  The DavCo Parties understand and acknowledge
that Wendy’s consent and/or waiver in no way constitutes an acknowledgment,
undertaking or representation by Wendy’s as to the financial viability of the
Restaurants or the Transactions, any approval of the monetary terms of the
Transactions or the earnings potential of the Restaurants.  The DavCo Parties acknowledge that they have
separately reviewed and evaluated the Transactions and obtained independent
professional assistance and have in no way relied upon Wendy’s consent and/or
waiver as an appraisal of any of the Transactions.  The DavCo Parties further warrant, represent and confirm that in
connection with the Transactions neither Wendy’s nor its authorized
representatives have made any claims or furnished any information regarding the
actual or potential sales, costs, income or profits of any Restaurant.

 

24.                                 Receipt of Circular.  Franchisees hereby acknowledge the receipt
of Wendy’s Uniform Franchise Offering Circular and the final franchise-related
documents at the time required under federal and state law.

 

25.                                 Conflicts.  Nothing contained in any documentation
between Franchisees and any third parties related to the Transactions,
including the Note Indenture, the Guaranty, the Senior Credit Agreement, the
Senior Credit Agreement Guarantees, the Amended and Restated Certificate of
Incorporation of DavCo Restaurants and the Stockholders Agreement, is intended
to conflict with the terms and conditions of this Amended Consent to Assignment
or the Franchise Contracts (and where applicable, the Existing Franchise
Agreements and the Initial Consent), or to impose additional requirements or
restrictions on Wendy’s, except as may be specifically set forth herein.  In the event of such a conflict, the terms
and conditions of the Franchise Contracts and this Amended Consent to
Assignment (and any applicable provisions of the Initial Consent) will control
over said documents as to Wendy’s and the rights of Wendy’s.

 

26.                                 Governing Law.  All parties acknowledge and agree that this
Amended Consent to Assignment shall be governed by and construed in accordance
with the local laws of the State

 

40

 

of Ohio applicable to
contracts made within such state and without regard to principles of conflicts
of law.  Neither the Initial Consent nor
this Amended Consent to Assignment shall be construed against the party or its
representatives who drafted this Amended Consent to Assignment or any portion
of it by virtue of that preparation.

 

27.                                 Jurisdiction; Service of Process; Waiver of
Jury Trial.  Each of the
parties hereto hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of Ohio and of the United
States of America located in Franklin County, Ohio, for any actions, suits or
proceedings (including all defenses to such actions and all counterclaims or
cross claims therein) arising out of or relating to this Amended Consent to
Assignment and the Transactions, and further agrees that service of any
process, summons, notice or document by U.S. certified or registered mail to
its respective address set forth in Section 19 will be effective service
of process for any action, suit or proceeding brought against it in any such
court.  Each of the parties hereto
hereby irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Amended Consent to
Assignment or the Transactions in the courts of the State of Ohio or the United
States of America located in Franklin County, Ohio, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. 
TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARTIES HERETO HEREBY WAIVE
A JURY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS AMENDED CONSENT TO
ASSIGNMENT.  The rights and remedies of
the parties to this Amended Consent to Assignment (including Wendy’s rights and
remedies under the DavCo Letter of Credit, the Leasehold Mortgages, the
Franchise Contracts and hereunder) are cumulative and not alternative and none
is exclusive of any other, or of any rights or remedies that any party may
otherwise have.  Wendy’s shall have the
right to seek specific performance of the provisions of this Amended Consent to
Assignment and injunctive relief against threatened conduct that will cause it
loss or irreparable harm for which monetary damages are inadequate, under
customary equity rules, including applicable rules for obtaining restraining
orders and preliminary injunctions.  The
DavCo Parties agree that Wendy’s may obtain such injunctive relief in addition
to such further or other relief as may be available at law or in equity and
that Wendy’s will not be required to post a bond to obtain any injunctive
relief.

 

28.                                 Severability.  If any term or provision of this Amended
Consent to Assignment is determined by a court of competent jurisdiction to be
invalid, illegal or unenforceable, all other terms and provisions hereof shall
nevertheless remain in full force and effect; provided, however,
if Wendy’s determines that the invalidity of any provision of this Amended
Consent to Assignment materially reduces the benefits to it of entering into
this Amended Consent to Assignment, Wendy’s by notice to the other parties may
terminate this Amended Consent to Assignment, including but not limited to the
consent set forth in Section 1 hereof.

 

29.                                 Entire Agreement.  This Amended Consent to Assignment sets forth
the entire understanding and supersedes all prior negotiations, discussions and
understandings among the parties concerning the subject matter of this Amended
Consent to Assignment (and, as of the date hereof, supersedes in its entirety
the Initial Consent).  There are no
covenants, promises, agreements, conditions or understandings, either oral or
written, between the parties relating to

 

41

 

the subject matter of
this Amended Consent to Assignment other than those set forth or referred to
herein.  Notwithstanding the preceding
sentences of this Section 29, the parties acknowledge and agree that the
Franchise Contracts and the General Releases and legal opinions executed and
delivered in connection with the Initial Consent were as of the Initial Consent
Date and continue to be in full force and effect in accordance with their
respective terms and that the delivery and execution of this Amended Consent to
Assignment is not intended to and shall not constitute a waiver or release by
Wendy’s of any breach that may have heretofore occurred by any of the DavCo
Parties of any provision of the Initial Consent.

 

30.                                 Amendment; Waiver.  No alteration, amendment, change or addition
to any provision of this Amended Consent to Assignment may be made except in a
writing signed by Wendy’s and by the other party or parties intended to be
bound by such alteration, amendment, change or addition.  The submission of any unexecuted copy of
this Amended Consent to Assignment shall not constitute an offer to be legally
bound by any provision of the document submitted, either currently or in the
future; and no party hereto shall be bound by this Amended Consent to
Assignment until it is fully executed and delivered by all parties hereto as
set forth in the first paragraph hereof. 
Neither the failure nor any delay by any party in exercising any right
under this Amended Consent to Assignment will operate as a waiver of such right
and no single or partial exercise of any such right will preclude any other or
further exercise of such right.  No
waiver that may be given by a party will be applicable except in the specific
instance for which it is given and will not operate as a waiver of or estoppels
with respect to any subsequent or other matter.

 

31.                                 Binding Nature; Assignment; Third Party Beneficiaries.  This Amended Consent to Assignment shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors, heirs, executors, legal representatives and permitted
assigns.  This Amended Consent to
Assignment and the rights and obligations hereunder may not be assigned by a
party without the prior written consent of the other parties hereto, except
that Wendy’s may assign this Amended Consent to Assignment and its rights and
obligations hereunder to any of Wendy’s direct or indirect subsidiaries without
the prior written consent of the other parties hereto.  Nothing in this Amended Consent to
Assignment is intended nor shall it be construed to give any person other than
the parties hereto, the persons entitled to indemnification under
Section 6 hereof, and their respective successors, heirs, executors, legal
representatives and permitted assigns, any right, remedy or claim under or in
respect of this Amended Consent to Assignment or any provision hereof, except
that various provisions of this Amended Consent to Assignment are made for the
benefit of WNAP and of direct and indirect subsidiaries of Wendy’s and may be
enforced by those entities as their interests may appear.

 

32.                                 Joint and Several; Survival.  All representations, warranties and
covenants of the DavCo Parties or the Franchisees are given on a joint and
several basis and shall survive the execution and delivery of this Amended
Consent to Assignment and the Transaction Closing.

 

33.                                 Time of Essence.  Time is of the essence with respect hereto.

 

34.                                 Construction.  The articles, section and paragraph
captions herein are for convenience of reference only and shall not be deemed
to limit or otherwise affect any of the

 

42

 

provisions hereof.  Words in the singular include the plural and
vice versa and words of one gender include the other (or neutral) gender as the
context requires.  All references herein
to “$” or “dollars” are to United States dollars.  The term “person” as used herein shall
include any individual, corporation, partnership, trust, limited liability
company, government agency or other entity. 
The terms “hereunder,” “hereof,” “herein,” and “hereto” and words of
similar import shall, unless otherwise specified, be construed to refer to this
Amended Consent to Assignment as a whole and not to any particular provision of
this Amended Consent to Assignment.  The
word “including” and words of similar import when used in this Amended Consent
to Assignment shall mean “including, without limitation,” unless otherwise
specified and all references herein to a Section or Exhibit are to a
Section or Exhibit of this Consent to Assignment, unless otherwise specified.  As used in this Amended Consent to
Assignment, “business day” means any day other than a Saturday, Sunday or other
day on which banking institutions located in the State of Ohio are required or
authorized to be closed.  All references
herein to a number or percentage of outstanding equity or outstanding voting
interests means such number or percentage of equity or voting interests as are
then outstanding as of the date of the relevant determination.

 

35.                                 Counterparts.  This Amended Consent to Assignment may be
executed in two or more counterparts, each of which shall be deemed an original
and all of which together shall constitute one and the same agreement.  The manual signature of any party hereto
that is transmitted to any other party by facsimile shall be deemed for all
purposes to be an original signature hereto.

 

36.                                 Legal Opinions; Deliveries.  On the Initial Consent Date, certain
opinions of counsel were delivered to Wendy’s, and contemporaneously with the
execution and delivery of this Amended Consent to Assignment, the Franchisees
are delivering to Wendy’s the opinions of Torys LLP, Whiteford, Taylor &
Preston LLP and the general counsel of DavCo Restaurants, Franchisees’ legal
counsel, in the respective forms attached as Exhibit I
hereto, and an opinion of an attorney licensed to practice law in Maryland and
acceptable to Wendy’s as to certain matters relating to the Rothstein Trusts
and the Kirstien Trust, as also attached as part of Exhibit I.  Contemporaneously with the occurrence of the
Transaction Closing, the Franchisees shall cause to be delivered to Wendy’s the
opinions of Torys LLP, Whiteford, Taylor & Preston LLP and Richards,
Layton & Finger, P.A. in the respective forms attached as Exhibit J
hereto, and reliance letters permitting Wendy’s to rely on, and attaching
thereto, any opinions given by counsel to the DavCo Parties to the underwriters
in respect of the Transactions. 
Contemporaneously with the execution and delivery of this Agreement,
Franchisees are delivering to Wendy’s certificates of good standing of each of
Franchisees in their jurisdictions of organization and each jurisdiction in
which they are qualified as foreign organizations.  Contemporaneously with the occurrence of the Transaction Closing,
Franchisees shall deliver to Wendy’s (i) certificates of good
standing of each of Franchisees in their jurisdiction of organization and each
jurisdiction in which they are qualified as foreign entities, (ii) evidence
of the filing of an Amended and Restated Certificate of Incorporation for DavCo
Restaurants meeting the requirements of Section 2.B(3), and (iii) evidence
in form and substance satisfactory to Wendy’s of compliance by the DavCo
Parties of the requirements set forth herein to be complied with as of the
Transaction Closing, including the provisions of Section 1.B,
Section 2.M, Section 2.O, Section 3.A, Section 3.D,
Section 3.E, Section 11.G and Section 15.

 

43

 

37.                                 Effectiveness.  Except as specifically set forth herein,
this Amended Consent to Assignment is entered into and made effective in
accordance with its terms as of the date set forth in the first paragraph
hereof.  If the Transaction Closing does
not occur by 5:00 p.m. Ohio time on December 4, 2004, the provisions of
Section 1.B hereof shall automatically and without further action of the
parties be void and of no further force or effect; provided, however,
that all of the other provisions of this Amended Consent to Assignment and all
of the Franchise Contracts shall remain in full force and effect in accordance
with their terms.  The DavCo Parties
shall deliver to Wendy’s written notice of the Transaction Closing not later
than five (5) business days prior to the date thereof.

 

38.                                 Continuous Disclosure.  Franchisees will provide Wendy’s with copies
of all documents, reports or statements filed by DavCo Restaurants on a
non-confidential basis with the SEC at the same time that DavCo Restaurants
files such documents with the SEC. 
Franchisees agree that, upon the written request of Wendy’s, DavCo
Restaurants shall request confidential treatment in accordance with the
applicable rules of the SEC with respect to any document or information set
forth in any document, report or statement filed by DavCo Restaurants with the
SEC or supplement furnished to the SEC.

 

39.                                 Limitation on Liability of Citicorp.  The provisions of this Section 39 shall
apply if the Transaction Closing occurs.

 

A.                                   Notwithstanding
any provision of this Amended Consent to Assignment to the contrary, in no
event shall Citicorp be liable to Wendy’s for any breach of any provision of
this Amended Consent to Assignment, including any covenant, representation or
warranty contained herein, or for any indemnification obligation hereunder, in
an amount in excess of $23 Million Dollars (the “Cap”); provided, however,
that the Cap shall not apply and there shall be no limit on the liability of
Citicorp with respect to any claims arising out of (i) any breach by
Citicorp or any corporate affiliate of Citicorp of the covenant not to compete
set forth in Section 8 hereof; (ii) any breach by Citicorp of
the representations, warranties, covenants or indemnities set forth in
Section 2.N or Section 2.Q; and/or (iii) any information
furnished by CVC for use in any prospectus or other Offering document of DavCo
Restaurants.

 

B.                                     Notwithstanding
any provision of this Amended Consent to Assignment to the contrary, in no
event shall Citicorp be liable to Wendy’s hereunder:

 

(1)                                  at
any time following the date which is 18 months after the date of the
Transaction Closing with respect to any breach of any covenant, representation
or warranty contained in Sections 2.C, 2.D, 2.H, 2.O(2), 2.P, 11, 12, 14.B, C.
and D and 38 hereof;

 

(2)                                  at
any time following the date which is 24 months after the date of the
Transaction Closing with respect to any breach of any covenant, representation
or warranty contained in Sections  2.N,
13, 18, 21 and 22 hereof; and

 

44

 

(3)                                  at
any time following the Ownership Termination Date with respect to any breach of
any other covenant, representation or warranty contained herein (other than
Section 2.Q, as to which there shall be no time limit), provided that on
the Ownership Termination Date all of the following conditions are met:

 

(i)                                     Citicorp
executes a release in the form of Exhibit H hereto dated the Ownership
Termination Date;

 

(ii)                                  Citicorp
represents and warrants in writing to Wendy’s that to the actual knowledge of
CVC (which shall be deemed to include the actual knowledge of any officer or
agent of Citicorp or any corporate affiliate of Citicorp), there is no
violation or breach of  any
representation, warranty or covenant contained in this Amended Consent to Assignment
(including Section 3) as of the Ownership Termination Date; and

 

(iii)                               Citicorp
and all corporate affiliates of Citicorp are not then an affiliate of
Franchisees.

 

(4)                                  As
used herein, “Ownership Termination Date” shall mean the date that Citicorp
and all corporate affiliates of Citicorp no longer own any equity or debt
securities of DavCo Restaurants or any affiliate.

 

C.                                     Citicorp
acknowledges and specifically agrees that, by execution of this Amended and
Restated Consent to Assignment, CVC has consented to all of the terms and
conditions hereof and all of the transactions contemplated hereby.

 

D.                                    The
Control Block Principals acknowledge and agree that the occurrence of the
Ownership Termination Date shall not limit or terminate any obligation of the
Control Block Principals hereunder to at all times own the 10% Block in
accordance with the terms hereof and from and after the Ownership Termination
Date the Control Block Principals shall be obligated to own the 10% Block
without including any securities owned by Citicorp.

 

[SIGNATURE PAGES FOLLOW]

 

45

 

IN WITNESS WHEREOF, this Amended and
Restated Agreement and Consent to Assignment has been duly executed by the
parties hereto as of the date first set forth above.

 

	
   

  	
  WENDY’S INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Stephen Wirt

  	
   

  
	
   

  	
   

  	
  Name:

  	
  W. Stephen Wirt

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  DAVCO ACQUISITION HOLDING INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald D. Kirstien

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Ronald D. Kirstien

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President and CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DAVCO RESTAURANTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald D. Kirstien

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Ronald D. Kirstien

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President and CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ Harvey Rothstein

  	
   

  
	
   

  	
  Harvey Rothstein

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Ronald D. Kirstien

  	
   

  
	
   

  	
  Ronald D. Kirstien

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ David J. Norman

  	
   

  
	
   

  	
  David J. Norman

  
								

 

S-1

 

	
   

  	
  /s/ Joseph F. Cunnane,
  III

  	
   

  
	
   

  	
  Joseph F. Cunnane, III

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Richard H. Borchers

  	
   

  
	
   

  	
  Richard H. Borchers

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CITICORP VENTURE CAPITAL, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Byron L. Knief

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Byron L. Knief

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JONATHAN ROTHSTEIN TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harvey Rothstein

  	
   

  
	
   

  	
   

  	
  Harvey Rothstein, Sole
  Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PATRICK DREWS TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harvey Rothstein

  	
   

  
	
   

  	
   

  	
  Harvey Rothstein, Sole
  Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SEAN DREWS TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harvey Rothstein

  	
   

  
	
   

  	
   

  	
  Harvey Rothstein, Sole
  Trustee

  	
   

  
						

 

S-2

 

	
   

  	
  KIRSTIEN FAMILY TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald D.
  Kirstien

  	
   

  
	
   

  	
   

  	
  Ronald D.
  Kirstien, Sole Trustee

  	
   

  

 

ACKNOWLEDGMENT

 

The undersigned hereby
acknowledges and agrees to the terms, provisions and conditions of the
foregoing Amended and Restated Agreement and Consent to Assignment and
acknowledges the reliance of Wendy’s International, Inc. on the undersigned’s
acknowledgment and agreement.

 

 

	
  /s/ Byron L. Knief

  	
   

  
	
  Byron L. Knief

  
	
   

  
	
  April 16, 2004

  	
   

  
	
  Date:

  

 

S-3

 

EXHIBITS TO

AMENDED AND RESTATED AGREEMENT AND
CONSENT

TO ASSIGNMENT

 

	
  EXHIBIT A

  	
  -

  	
  Form of Amended and
  Restated Certificate of Incorporation of DavCo Restaurants

  
	
  EXHIBIT B

  	
  -

  	
  Form of LTIP

  
	
  EXHIBIT C

  	
  -

  	
  Form of Reinvestment
  Plan

  
	
  EXHIBIT D

  	
  -

  	
  Outstanding Obligations

  
	
  EXHIBIT E

  	
  -

  	
  Description of
  Subordinated Notes and Guarantees

  
	
  EXHIBIT F

  	
  -

  	
  Format of Standard
  Business Plan

  
	
  EXHIBIT G

  	
  -

  	
  Indebtedness and Liens

  
	
  EXHIBIT H

  	
  -

  	
  Form of General Release
  of All Claims

  
	
  EXHIBIT I

  	
  -

  	
  Forms of Legal Opinions
  to be Delivered at Signing of Amended and Restated Consent to Assignment

  
	
  EXHIBIT J

  	
  -

  	
  Forms of Legal Opinions
  to be Delivered at Transaction Closing

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