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WEN » Topics » ARG and its subsidiaries are subject to various restrictions, and substantially all of their assets are pledged, under a credit agreementThis excerpt taken from the WEN 10-K filed Feb 29, 2008. ARG and its
subsidiaries are subject to various restrictions, and substantially all of their
assets are pledged, under a credit agreement.
Under its
credit agreement, substantially all of the assets of ARG and its subsidiaries
(other than real property) are pledged as collateral security. The credit
agreement also contains financial covenants that, among other things, require
ARG and its subsidiaries to maintain certain financial ratios and restrict their
ability to incur debt, pay dividends or make other distributions, enter into
certain fundamental transactions (including sales of assets and certain mergers
and consolidations) and create or permit liens. If ARG and its
subsidiaries are unable to generate sufficient cash flow or otherwise obtain the
funds necessary to make required payments of interest or principal under, or are
unable to comply with covenants of, the credit agreement, then they would be in
default under the terms of the credit agreement, which would preclude the
payment of dividends to Triarc, restrict access to ARG’s revolving line of
credit and, under certain
circumstances, permit the lenders to accelerate the maturity of the
indebtedness. You should read the information in Note 11 to the
Consolidated Financial Statements. - 14
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