UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ____) (1)
Embotelladora Andina S.A.
(Name of Issuer)
Common Stock, No Par Value
(Title of Class of Securities)
None *
(CUSIP Number)
* CUSIP number for American Depositary Shares representing Common Stock is
29081P 10 5
James E. Chestnut
Senior Vice President and Chief Financial Officer
The Coca-Cola Company
One Coca-Cola Plaza
Atlanta, Georgia 30313
(404)676-2121
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
With a copy to:
Carol Crofoot Hayes, Esq.
The Coca-Cola Company
One Coca-Cola Plaza
Atlanta, Georgia 30313
(404)676-2121
September 5, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
Check the following box if a fee is being paid with the statement [ X ].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent
of the class of securities described in Item 1; and (2) has filed no
amendment subsequent thereto reporting beneficial ownership of five percent
or less of such class.) (See Rule 13d-7.)
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
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SCHEDULE 13D
CUSIP No. - None (1)
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Coca-Cola Company
58-0628465
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ X ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
N/A [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 24,000,000 shares of Common Stock, no par value
BENEFICIALLY (See Attachment A)
OWNED BY
EACH 8 SHARED VOTING POWER
REPORTING None
PERSON
WITH 9 SOLE DISPOSITIVE POWER
24,000,000 shares of Common Stock, no par value
(See Attachment A)
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
24,000,000 shares of Common Stock, no par value
(See Attachment A)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.37% (2)
14 TYPE OF REPORTING PERSON*
CO
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(1) CUSIP number for American Depositary Shares representing Common Stock
is 29081P 10 5
(2) Assumes no exercise of preemptive rights by the shareholders of
Embotelladora Andina S.A. in connection with the capital increase of
Embotelladora Andina S.A. pursuant to which these shares are to be
acquired.
*SEE INSTRUCTIONS BEFORE FILLING OUT
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SCHEDULE 13D
CUSIP No. - None (1)
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Coca-Cola Interamerican Corporation
13-1940209
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ X ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
N/A [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 24,000,000 shares of Common Stock, no par value
BENEFICIALLY (See Attachment A)
OWNED BY
EACH 8 SHARED VOTING POWER
REPORTING None
PERSON
WITH 9 SOLE DISPOSITIVE POWER
24,000,000 shares of Common Stock, no par value
(See Attachment A)
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
24,000,000 shares of Common Stock, no par value
(See Attachment A)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.37% (2)
14 TYPE OF REPORTING PERSON*
CO
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(1) CUSIP number for American Depositary Shares representing Common Stock
is 29081P 10 5
(2) Assumes no exercise of preemptive rights by the shareholders of
Embotelladora Andina S.A. in connection with the capital increase of
Embotelladora Andina S.A. pursuant to which these shares are to be
acquired.
*SEE INSTRUCTIONS BEFORE FILLING OUT
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SCHEDULE 13D
CUSIP No. - None (1)
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Coca-Cola Export Corporation
13-1525101
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ X ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
N/A [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 24,000,000 shares of Common Stock, no par value
BENEFICIALLY (See Attachment A)
OWNED BY
EACH 8 SHARED VOTING POWER
REPORTING None
PERSON
WITH 9 SOLE DISPOSITIVE POWER
24,000,000 shares of Common Stock, no par value
(See Attachment A)
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
24,000,000 shares of Common Stock, no par value
(See Attachment A)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.37% (2)
14 TYPE OF REPORTING PERSON*
CO
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(1) CUSIP number for American Depositary Shares representing Common Stock
is 29081P 10 5
(2) Assumes no exercise of preemptive rights by the shareholders of
Embotelladora Andina S.A. in connection with the capital increase of
Embotelladora Andina S.A. pursuant to which these shares are to be
acquired.
*SEE INSTRUCTIONS BEFORE FILLING OUT
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SCHEDULE 13D
CUSIP No. - None (1)
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Coca-Cola de Argentina S.A.
(TIN - n/a)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ X ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
N/A [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of Argentina
NUMBER OF 7 SOLE VOTING POWER
SHARES 24,000,000 shares of Common Stock, no par value
BENEFICIALLY (See Attachment A)
OWNED BY
EACH 8 SHARED VOTING POWER
REPORTING None
PERSON
WITH 9 SOLE DISPOSITIVE POWER
24,000,000 shares of Common Stock, no par value
(See Attachment A)
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
24,000,000 shares of Common Stock, no par value
(See Attachment A)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.37% (2)
14 TYPE OF REPORTING PERSON*
CO
- ----------------
(1) CUSIP number for American Depositary Shares representing Common Stock
is 29081P 10 5
(2) Assumes no exercise of preemptive rights by the shareholders of
Embotelladora Andina S.A. in connection with the capital increase of
Embotelladora Andina S.A. pursuant to which these shares are to be
acquired.
*SEE INSTRUCTIONS BEFORE FILLING OUT
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ATTACHMENT A
Pursuant to the SPC Purchase Agreement (as defined in Item 4), Coca-Cola
Interamerican Corporation and Coca-Cola de Argentina S.A. will acquire in
the aggregate 24,000,000 shares of Common Stock, no par value, of
Embotelladora Andina S.A. Coca-Cola de Argentina S.A. is a wholly owned
subsidiary of The Coca-Cola Export Corporation, and The Coca-Cola Export
Corporation and Coca-Cola Interamerican Corporation are each wholly owned
subsidiaries of The Coca-Cola Company.
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ITEM 1. SECURITY AND ISSUER
This statement relates to the Common Stock, no par value, of
Embotelladora Andina S.A. ("Andina"). The legal address of Andina is
Carlos Valdovinos 560, Casilla 488-3, Santiago, Chile, and the
principal executive offices of Andina are located at Avenida Andres
Bello No. 2687, 20th Floor, Casilla 7187, Santiago, Chile.
ITEM 2. IDENTITY AND BACKGROUND
This statement is being filed by The Coca-Cola Company ("KO"), KO's
direct wholly owned subsidiaries, Coca-Cola Interamerican Corporation
("Interamerican") and The Coca-Cola Export Corporation ("Export"),
each of which companies is a Delaware corporation having its principal
executive offices at One Coca-Cola Plaza, Atlanta, Georgia 30313,
telephone (404)676-2121, and KO's indirect wholly owned subsidiary,
Coca-Cola de Argentina S.A. ("CC Argentina"), an Argentine corporation
having its principal executive offices at Paraguay 733, 1057 Buenos
Aires, Argentina, telephone 541-319-2000.
KO, together with its subsidiaries, is the largest manufacturer,
marketer and distributor of soft drink concentrates and syrups in the
world. KO is also the world's largest marketer and distributor of
juice and juice-drink products.
Certain information with respect to the directors and executive
officers of KO, Interamerican, Export and CC Argentina is set forth in
Exhibit 99.1 attached hereto, including each director's and executive
officer's business address, present principal occupation or
employment, citizenship and other information.
None of KO, Interamerican, Export and CC Argentina nor, to the best of
their knowledge, any director, executive officer or controlling person
of KO, Interamerican, Export or CC Argentina has, during the last five
years, been (a) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), or (b) a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction as a result of which proceeding any of KO, Interamerican,
Export or CC Argentina or any director, executive officer or
controlling person of KO, Interamerican, Export or CC Argentina was or
is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, or
finding any violation with respect to federal or state securities
laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
As a result of the transactions contemplated by the Stock
Purchase Agreements (as defined below in Item 4), CC Argentina
and Interamerican collectively will acquire 24,000,000 shares
of Common Stock of Andina. The consideration to be paid by
CC Argentina and Interamerican for such shares will consist
of (x) all of the outstanding shares of capital
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stock of Complejo Industrial PET (CIPET) S.A., a supplier of
packaging to Coca-Cola bottlers in Argentina and currently a wholly
owned subsidiary of CC Argentina ("CIPET"), and approximately
U.S.$66.36 million of debt currently owed by CIPET to Interamerican
and (y) the approximately 78.7% of the outstanding shares of capital
stock of INTI S.A. Industrial y Comercial, the Coca-Cola bottler
based in Cordoba, Argentina ("INTI"), which are currently owned
by Interamerican, all as described in Item 4 of this Schedule 13D.
ITEM 4. PURPOSE OF TRANSACTION
On September 5, 1996, Interamerican and CC Argentina agreed
to acquire 24,000,000 shares of Common Stock of Andina. In
addition, Inversiones del Atlantico S.A., an Argentine
company and a subsidiary of Andina ("Atlantico"), will
acquire all of the capital stock of CIPET, certain debt
currently owed by CIPET to Interamerican, and approximately
78.7% of the capital stock of INTI.
The transaction will be effected as follows: Pursuant to a
Stock Purchase Agreement dated as of September 5, 1996 (the
"Andina Purchase Agreement") among Andina, Inversiones
Freire Ltda. and Inversiones Freire Dos Ltda. (collectively,
the "Majority Shareholders"), Citicorp Banking Corporation
("Citicorp") and Bottling Investment Limited, a Cayman
Islands company and wholly owned subsidiary of Citicorp
("SPC"), Andina will effect an increase in its share capital
by increasing the number of authorized shares of Common
Stock of Andina (the "Common Stock"). SPC will acquire
24,000,000 shares of Common Stock resulting from the
increase in Andina's share capital. The shares of Andina
Common Stock to be acquired by SPC pursuant to the Andina
Purchase Agreement, together with any shares of Class A
Stock and Class B Stock (each as hereinafter defined) to be
received by SPC after giving effect to the Reclassification
(as hereinafter defined) are referred to herein as the
"Acquired Shares."
In addition, pursuant to a Stock Purchase Agreement dated as
of September 5, 1996 (the "SPC Purchase Agreement") among
Andina, Atlantico, the Majority Shareholders, KO,
Interamerican, CC Argentina, Citicorp and SPC, Interamerican
and CC Argentina will transfer to Citicorp (i) all of the
outstanding shares of capital stock of CIPET (the "CIPET
Shares") and approximately U.S.$66.36 million of debt
currently owed by CIPET to Interamerican (the "CIPET Debt")
and (ii) all of the shares of capital stock of INTI which
are owned by Interamerican (the "INTI Shares"), which is
approximately 78.7% of the outstanding shares of INTI. In
exchange for the CIPET Shares, the CIPET Debt and the INTI
Shares, Interamerican and CC Argentina will acquire from
Citicorp all of the outstanding shares of SPC. Following
such exchange, Atlantico will purchase the CIPET Shares, the
CIPET Debt and the INTI Shares from Citicorp. Subject to
the receipt of the approval of the Amendments (as
hereinafter defined) by the shareholders of Andina, it is
presently anticipated that the closing of the transactions
contemplated by the Stock Purchase Agreements (as
hereinafter defined) will take place in December 1996 (the
"Closing Date").
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The Andina Purchase Agreement and the SPC Purchase Agreement
are sometimes referred to herein collectively as the "Stock
Purchase Agreements." Copies of the Stock Purchase
Agreements are attached hereto as Exhibits 99.2 and 99.3 and
are incorporated herein by reference.
In addition to the Stock Purchase Agreements, a
Shareholders' Agreement dated as of September 5, 1996 (the
"Shareholders' Agreement"), which will become effective as
of the Closing Date, was signed by Andina, KO,
Interamerican, CC Argentina, SPC and the Majority
Shareholders providing for certain restrictions on the
transfer of shares of Andina capital stock held by KO,
Interamerican, CC Argentina, SPC and the Majority
Shareholders and for certain corporate governance and other
matters, including the right of KO, Interamerican, CC
Argentina and SPC (collectively, the "KO Shareholders")
collectively to elect one regular and one alternate member
to the Board of Directors of Andina so long generally as KO
and its subsidiaries collectively own an aggregate of at
least 4% of the voting power of Andina. A copy of the
Shareholders' Agreement is attached hereto as Exhibit 99.4
and is incorporated herein by reference.
In connection with the transactions contemplated by the
Shareholders' Agreement, the Majority Shareholders also
executed a Stock Purchase Option Agreement and Custody
Agreement dated as of September 5, 1996 (the "Option
Agreement") with Citibank N.A., as custody agent (the
"Custody Agent"), and with KO, Interamerican and CC
Argentina. Pursuant to the terms of the Option Agreement,
subject to certain limited exceptions, the Majority
Shareholders will deposit with the Custody Agent all of the
Majority Shareholders' shares of Common Stock (or, after
giving effect to the Reclassification, all shares of capital
stock other than the Class B Stock) of Andina now owned or
thereafter acquired by the Majority Shareholders, together
with any rights, options or securities convertible into or
exchangeable for any such shares, or American Depositary
Shares or other contracts or securities representing such
shares (the "Option Shares"), and such Option Shares shall
not be transferable by the Majority Shareholders without the
prior written consent of KO, Interamerican and CC Argentina
(collectively, the "KO Parties").
The Option Agreement also grants the KO Parties an option
(the "Option") to acquire, at any time after the date of the
Option Agreement until December 31, 2130 upon the occurrence
of one or more Exercise Conditions (as defined in Item 6),
all of the Option Shares at a price per share which is
mutually agreed upon by the Majority Shareholders and the KO
Parties, or, if the parties are unable to agree on the price
per share, at the Valuation Price (as defined in Item 6).
After the Reclassification, the Option Agreement and the
Option will not apply with respect to Class B Stock owned by
the Majority Shareholders unless the voting power of the
Class B Stock is increased in certain respects. The Option
Agreement will also terminate under the circumstances
described in Item 6 below. A copy of the Option Agreement
is attached hereto as Exhibit 99.5 and is incorporated
herein by reference.
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The transactions contemplated by the Stock Purchase
Agreements will require Andina to amend its Estatutos
Sociales (such amendments being referred to herein as the
"Amendments") to, among other things: (i) permit the
increase in share capital necessary to facilitate the
issuance of shares of Common Stock pursuant to the Stock
Purchase Agreements and to facilitate the Reclassification
described below; (ii) increase the number of regular and
alternate directors of Andina to seven members; (iii) permit
the issuance of shares of Common Stock in a preemptive
rights offering as required by Chilean law in connection
with the transactions described in the foregoing clause (i);
and (iv) reclassify the existing Common Stock of Andina (the
"Reclassification") into two series of shares, the Series A
Shares (the "Class A Stock") and the Series B Shares (the
"Class B Stock"). A copy of the form of the Amendments is
attached hereto as Exhibit 99.6 and is incorporated herein
by reference.
The Common Stock is ordinary common stock, without nominal
(par) value. Each share of Common Stock has one vote per
share on all matters requiring a vote of the holders of the
Common Stock and has a full right to vote without
restrictions. Holders of shares of Common Stock receive
dividends in accordance with the Estatutos Sociales of
Andina. After giving effect to the Reclassification (which
will take place after the Closing Date), each share of
Common Stock will be reclassified as one share of Class A
Stock and one share of Class B Stock having the terms
described below.
The Class A Stock will be preferred shares, without nominal
(par) value. Each share of Class A Stock shall have one
vote per share on all matters requiring a vote of the
holders of the Class A Stock and shall have a full right to
vote without restrictions, and the holders of the Class A
Stock shall be entitled to elect six of the seven regular
and alternate directors of Andina. Holders of shares of
Class A Stock shall receive dividends in accordance with the
Estatutos Sociales of Andina.
The Class B Stock will be preferred shares, without nominal
(par) value. The preference of the Class B Stock will
consist of the right to receive 110% of any and all
dividends allocated by Andina with respect to the Class A
Stock. This preference will last until December 31, 2130,
or if earlier, the occurrence of certain other events to be
specified in the Estatutos Sociales, at which time the Class
A Stock and the Class B Stock will automatically become
Common Stock without any preference. The Class B Stock
shall have one vote per share and shall only be entitled to
vote, voting as a separate class, for the election of one
regular and one alternate director to the Board of Directors
of Andina and with respect to certain other matters for
which voting rights are required under Chilean law. In
addition, during the three-year period following the
Reclassification holders of the Class A Stock will from time
to time be permitted at their discretion to exchange such
shares for Class B Stock on a one-for-one basis.
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Upon the consummation of the transactions contemplated by
the Stock Purchase Agreements, CC Argentina and
Interamerican will collectively own all of the outstanding
capital stock of SPC, and the sole asset of SPC will be the
Acquired Shares. As described in Item 2 hereof,
Interamerican and CC Argentina are direct or indirect
subsidiaries of KO. Thus, as a result of the acquisition by
CC Argentina and Interamerican of the capital stock of SPC
and, indirectly, the Acquired Shares, KO will beneficially
own 24,000,000 shares of Common Stock (or, after giving
effect to the Reclassification, 24,000,000 shares of Class A
Stock and 24,000,000 shares of Class B Stock), or
approximately 6.37% of the outstanding capital stock of
Andina (without giving effect to the exercise of any
preemptive rights by existing shareholders of Andina).
The terms of the Stock Purchase Agreements, the
Shareholders' Agreement and the Option Agreement are
described further in Item 6 of this Schedule 13D.
The purpose of the equity investment by KO in Andina through
the acquisition of the Acquired Shares is to establish a new
and expanded relationship that the Majority Shareholders and
KO believe has the potential to enhance the growth and
profitability of Andina as well as the potential to afford
both KO and the Majority Shareholders the opportunity to
participate in the future growth in the region through
Andina. The SPC Purchase Agreement also recognizes the
potential for KO to increase its ownership position in
Andina to approximately 20%. Except for the matters
contemplated by the Stock Purchase Agreements, the
Amendments, the Shareholders' Agreement and the Option
Agreement or described in this Item 2 or in Item 6 of this
Schedule 13D, KO does not have any plans or proposals which
relate to or would result in:
(i) The acquisition by any person of additional
securities of Andina, or the disposition of
securities of Andina;
(ii) An extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving
Andina or any of its subsidiaries;
(iii) A sale or transfer of a material amount of
assets of Andina or of any of its subsidiaries;
(iv) A change in the present board of directors or
management of Andina, including any plans or
proposals to change the number or term of directors
or to fill any existing vacancies on the board;
(v) Any material change in the present capitalization or
dividend policy of Andina;
(vi) Any other material change in Andina's business or
corporate structure;
(vii) Changes in Andina's charter, bylaws or
instruments corresponding thereto or other actions
which may impede the acquisition of control of
Andina by any person;
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(viii) Causing a class of securities of Andina to be
delisted from a national securities exchange or to
cease to be authorized to be quoted in an
interdealer quotation system of a registered
national securities association;
(ix) A class of equity securities of Andina becoming
eligible for termination of registration pursuant
to Section 12(g)(4) of the Exchange Act; or
(x) Any action similar to any of those enumerated above.
However, KO, Interamerican, Export or CC Argentina at any
time may propose any of the foregoing which it considers
desirable.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Upon the consummation of the transactions contemplated by
the Stock Purchase Agreements, CC Argentina and
Interamerican will collectively own all of the outstanding
capital stock of SPC, and the sole asset of SPC will be the
Acquired Shares. As described in Item 2 of this Schedule
13D, Interamerican and CC Argentina are direct or indirect
subsidiaries of KO, and CC Argentina is a direct subsidiary
of Export. Thus, as a result of the acquisition by
CC Argentina and Interamerican of the capital stock of SPC
and, indirectly, the Acquired Shares, KO, CC Argentina,
Interamerican and Export collectively will beneficially own
and have sole voting and dispositive power over an aggregate
of 24,000,000 shares of Common Stock (or, after giving
effect to the Reclassification, 24,000,000 shares of Class A
Stock and 24,000,000 shares of Class B Stock), or
approximately 6.37% of the outstanding capital stock of
Andina (without giving effect to the exercise of any
preemptive rights by existing shareholders of Andina).
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
STOCK PURCHASE AGREEMENTS
On September 5, 1996, Andina entered into the Andina
Purchase Agreement with the Majority Shareholders, Citicorp,
and SPC pursuant to which SPC will acquire 24,000,000 shares
of Common Stock. Also on September 5, 1996, the SPC
Purchase Agreement was signed by Andina, Atlantico, the
Majority Shareholders, KO, Interamerican, CC Argentina,
Citicorp and SPC pursuant to which (i) Interamerican and CC
Argentina will acquire all of the outstanding shares of
capital stock of SPC and (ii) Atlantico will acquire (x)
all of the outstanding shares of capital stock of CIPET and
approximately U.S.$66.36 million of debt of CIPET currently
owed to Interamerican and (y) the 78.7% of the outstanding
shares of capital stock of INTI owned by Interamerican. The
Stock Purchase Agreements contain representations and warranties
with respect to various matters and also contain covenants and
indemnification provisions. The representations, warranties
and covenants contained in the Stock Purchase Agreements
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generally will not survive the Closing Date, subject to
certain limited exceptions. In certain circumstances,
indemnification payments owed to KO, Interamerican,
CC Argentina, Citicorp or SPC under the Stock Purchase
Agreements shall be satisfied by the transfer by
the Majority Shareholders to the party to whom
indemnification payments are owed of shares of Common Stock
(or, after the Reclassification, Class A Stock and Class B
Stock) equal in value to the amount of any indemnification
payment which is owed to such person.
Pursuant to the terms of the SPC Purchase Agreement, from
and after the date of the SPC Purchase Agreement, unless the
SPC Purchase Agreement is terminated, Andina and Atlantico
shall be fully responsible for the supervision, management
and operation of the businesses of INTI and CIPET. In
addition to any other remedies available to KO,
Interamerican, or CC Argentina under the SPC Purchase
Agreement or otherwise, if the SPC Purchase Agreement is
terminated and the transactions contemplated therein are not
consummated, Andina and Atlantico shall take all actions
necessary to effect the orderly return of the supervision,
management and operation of the businesses of INTI and CIPET
to Interamerican and CC Argentina, respectively, so that the
businesses of INTI and CIPET are in all material respects in
the same condition as when the supervision, management and
operation of such businesses were transferred to Andina and
Atlantico, after taking into account changes reasonably
attributable to seasonality and the operation of such
business in the ordinary course and in a manner consistent
with past practices. In light of the transfer on the
signing date to Andina and Atlantico of the management
responsibilities for INTI and CIPET, the closing conditions
under the Stock Purchase Agreements are very limited and
include only the receipt of Andina shareholder approval, the
absence of governmental restraints, the continuing accuracy
of certain fundamental representations and warranties and
similar matters.
Subject to the receipt of the approval of the Amendments by
the shareholders of Andina, it is presently anticipated that
the closing of the transactions contemplated by the Stock
Purchase Agreements will occur in December 1996.
SHAREHOLDERS' AGREEMENT
On September 5, 1996, the Shareholders' Agreement, which
will become effective as of the Closing Date, was signed by
KO, Interamerican, CC Argentina, SPC and the Majority
Shareholders (collectively, the "Shareholders") and Andina.
Certain of the terms of the Shareholders' Agreement are
described below.
BOARD REPRESENTATION. Pursuant to the Shareholders'
Agreement, after giving effect to the Amendments, the Board
of Directors of Andina shall at all times consist of not
more than twelve incumbent members and twelve alternate
members. The KO Shareholders shall be entitled to nominate
one incumbent member and one alternate member to the Board
of Directors of Andina. At every annual meeting and at any
special meeting of shareholders called for the purpose of
electing directors to the Board of Directors of Andina, the
KO Shareholders have agreed to vote all of their shares
in favor of the election of the nominee for director
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<PAGE>
<PAGE>
designated by the KO Shareholders (and his or her alternate),
and the Majority Shareholders have agreed to vote such number
of shares owned, directly or indirectly, by them as may be
necessary (after taking into account the shares voted by the
KO Shareholders) to cause the election of such KO nominee
(and his or her alternate). In the event of any vacancy on
the Board of Directors of Andina occasioned by the death,
incapacity, resignation or removal of a director nominated
by the KO Shareholders, each Shareholder will vote or cause
to be voted all shares of capital stock which such
Shareholder owns to fill the vacancy with the nominee
designated by the KO Shareholders. If the KO Shareholders,
in their sole discretion, determine to remove a director
which the KO Shareholders had previously nominated, each
Shareholder agrees promptly to vote or cause to be voted all
shares of Andina capital stock which such Shareholder owns
in favor of the removal of such director. The right of the
KO Shareholders to nominate a director to the Andina Board
will terminate as described below in "--Termination."
CODE OF BUSINESS CONDUCT. Pursuant to the
Shareholders' Agreement, the Majority Shareholders have
agreed that Andina and its subsidiaries shall have in effect
at all times a Code of Business Conduct. The Code of
Business Conduct is intended to ensure that Andina and its
subsidiaries perform their activities and commercial
transactions according to certain ethical and legal
standards.
TRANSFER RESTRICTIONS. Pursuant to the Shareholders'
Agreement, the KO Shareholders will not, prior to the third
anniversary of the date of the Shareholders' Agreement,
transfer any of their shares of Andina other than (a) in
accordance with the provisions of the Shareholders'
Agreement, (b) in connection with any merger, consolidation,
recapitalization, reclassification or other similar
transaction involving Andina or (c) in connection with
certain tender offers or exchange offers of shares of
capital stock of Andina. In addition, transfers by any of
the Shareholders are subject to rights of first refusal and
first offer in favor of the other Shareholders. However,
neither the three-year prohibition on transfer nor the
rights of first refusal and first offer will apply to the
transfer of shares of Class B Stock, unless the terms of the
Class B Stock are modified to provide the Class B Stock with
voting power in any material respect greater than that
provided to the Class B Stock in the Amendments.
The Shareholders' Agreement also permits the KO
Shareholders to transfer shares to any wholly owned
subsidiary of KO who agrees in writing to be bound by the
provisions of the Shareholders' Agreement and executes a
copy of the Shareholders' Agreement (a "KO Permitted
Transferee"). In addition, the Shareholders' Agreement also
permits the Majority Shareholders to transfer shares to any
wholly owned subsidiary of a Majority Shareholder who agrees
in writing to be bound by the provisions of the
Shareholders' Agreement and executes a copy of the
Shareholders' Agreement (a "Majority Shareholder Permitted
Transferee"). Any shares of Andina transferred to a KO
Permitted Transferee or a Majority Shareholder Permitted
Transferee shall remain subject to the provisions of the
Shareholders' Agreement.
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<PAGE>
PUT RIGHT. Upon the occurrence of a Put Event (as
hereinafter defined), the KO Shareholders shall have the
right (the "Put Right") to require the Majority Shareholders
to purchase all of the shares of Andina stock then owned by
the KO Shareholders (except as provided in the next
sentence) at the Put Price (as hereinafter defined). For
purposes of the Put Right, the shares subject to the Put
Right shall include only the Acquired Shares and any
additional shares of Andina capital stock acquired by the KO
Shareholders through the exercise of their preemptive
rights. "Put Event" means (i) the sale of all or
substantially all of the assets of Andina or (ii) any
merger, consolidation, share exchange, business combination
or similar transaction involving Andina as a result of which
Andina is not the surviving entity or any reorganization
involving any third party in which Andina is not the
surviving entity.
Upon the occurrence of a Put Event, the Put Price shall be
determined as follows:
(i) If the shares to be purchased by the Majority
Shareholders pursuant to the Put Right are shares
of Class A Stock, the Put Price for such shares
shall be mutually agreed upon by the KO
Shareholders and the Majority Shareholders or, if
the KO Shareholders and the Majority Shareholders
are unable to agree within thirty days after the
request by the KO Shareholders for the
determination of the Put Price, the Put Price will
be determined through a process involving
investment bankers, pursuant to which such bankers
will determine the price that a willing buyer would
pay to a willing seller under market conditions.
(ii) If the shares to be purchased by the Majority
Shareholders pursuant to the Put Right are shares
of Common Stock or Class B Stock, the Put Price
shall be the Market Value of such shares of Common
Stock or Class B Stock. The "Market Value" (as
calculated on a per share basis) shall mean the
quotient of the average closing price of such
stock, as reported on the Santiago Stock Exchange
for the twelve month period ended on the trading
date immediately prior to the date the notice by
the KO Shareholders exercising the Put Right is
delivered.
FUNDAMENTAL TRANSACTIONS. Pursuant to the
Shareholders' Agreement, the Majority Shareholders have
agreed that, at least 90 days prior to taking any action
with respect to any Fundamental Transaction (as hereinafter
defined), the Majority Shareholders will provide the KO
Shareholders with written notice of the intent to take such
action. A "Fundamental Transaction" shall mean any of the
following matters:
(i) the sale of all or substantially all of the
assets of Andina;
(ii) any reorganization, merger, consolidation,
share exchange or business combination involving
Andina;
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<PAGE>
(iii) any change in the direct or indirect ownership
of the outstanding voting power or equity interests
of any of the Majority Shareholders as a result of
which the Majority Shareholder Partner Group (as
hereinafter defined) owns collectively less than
75% of the outstanding voting power or less than
75% of the outstanding equity interests of any of
the Majority Shareholders;
(iv) any change in the direct or indirect ownership
of the outstanding voting power or equity interests
of Andina as a result of which the Majority
Shareholders own in the aggregate less than 50.1%
of the outstanding voting power of Andina or less
than 25% of the outstanding equity interests of
Andina; or
(v) a stock split, subdivision, stock dividend,
extraordinary dividend or dividends or other
reclassification, consolidation or combination of
Andina's voting securities or any similar action or
transaction (other than the Amendments).
For purposes of the foregoing, the "Majority Shareholder
Partner Group" means the individuals who are the current
beneficial owners of the Majority Shareholders, their
spouses, their lineal descendants, certain successors by
intestacy, any wholly owned subsidiary of the foregoing and
any trust formed for the benefit of any such person if such
person retains full voting and investment power over the
assets of such trust.
Andina has agreed that it will provide the KO Shareholders
with prompt written notice upon becoming aware of the taking
of any action with respect to a Fundamental Transaction.
From the date of any request by the KO Shareholders for the
determination of the Valuation Price (as defined in the
Option Agreement) until the closing of the purchase of the
shares of Andina subject to the Option by the KO
Shareholders, the Majority Shareholders have agreed that
they (x) will not take, and will not vote their shares of
Andina stock in favor of, any action with respect to any
Fundamental Transaction and (y) will cause Andina to carry
on its business in the ordinary course. Each of the
Majority Shareholders has also agreed that it will not
convert or exchange, and will not take any action with
respect to the conversion or exchange of, any shares of
Class A Stock into shares of Class B Stock.
PREEMPTIVE RIGHTS. Pursuant to the Shareholders'
Agreement, the KO Shareholders have reserved their rights,
to the full extent permitted under applicable Chilean laws
and regulations, to maintain their pro rata share ownership
of Common Stock, Class A Stock and Class B Stock through the
exercise of preemptive rights. If Andina issues additional
shares of capital stock to existing shareholders in a
preemptive rights offering (a "Preemptive Rights Offering"),
the Majority Shareholders have agreed that they will not
vote their shares of Andina stock in favor of, or permit,
the setting of a price for any shares of capital stock which
may be offered to third parties (even if such shares are to
be acquired in a transfer on a stock exchange) which is
lower than the price at which shares of capital stock were
offered to the KO
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<PAGE>
Shareholders in the Preemptive Rights Offering without the
prior written consent of the KO Shareholders.
REPORTING REQUIREMENTS. Pursuant to the Shareholders'
Agreement, the Majority Shareholders have agreed to cause
Andina to provide KO, CC Argentina, Interamerican and SPC
with certain periodic reports, including monthly, quarterly
and annual financial reports; information necessary to
permit satisfaction of planning, accounting, tax and
regulatory requirements; and annual tax returns of Andina
and its subsidiaries.
TERMINATION. The Shareholders' Agreement will
terminate if either of the Stock Purchase Agreements is
terminated prior to the Closing Date or if any of the KO
Shareholders voluntarily transfers shares of Andina stock in
a sale to a third party, and, as a result of such sale,
during the 30 days following such sale KO and its wholly
owned subsidiaries own less than (a) if the Reclassification
has not occurred or if following such Reclassification an
event occurs with the result that only Common Stock of
Andina is outstanding, 15.66 million shares of Common Stock
of Andina or (b) if the Reclassification has occurred and
Class A Stock continues to be outstanding, 15.66 million
shares of Class A Stock. In addition, the transfer
restrictions and the Board nomination rights will terminate
if both (i) the Majority Shareholders notify the KO Parties
in writing that the ownership level of Andina stock held by
KO and its subsidiaries has fallen below (x) 4% of the
outstanding Common Stock if the Reclassification has not
occurred or if following such Reclassification an event
occurs with the result that only Common Stock of Andina is
outstanding, or (y) 4% of the Class A Stock if such
Reclassification has occurred and Class A Stock continues to
be outstanding, and (ii) within one year following the
receipt of such written notice KO and its subsidiaries fail
to restore their ownership of Andina stock to at least such
applicable 4% level.
OPTION AGREEMENT
Pursuant to the terms of the Option Agreement, subject to
certain limited exceptions, the Majority Shareholders will
deposit with the Custody Agent all of the Option Shares, and
such Option Shares shall not be transferable by the Majority
Shareholders without the prior written consent of the KO
Parties. The Option Agreement also grants the KO Parties an
option to acquire, at any time after the date of the Option
Agreement until December 31, 2130 upon the occurrence of one
or more Exercise Conditions (as hereinafter defined), all of
the Option Shares at the Valuation Price (as hereinafter
defined). Notwithstanding that all of the Shares are
subject to the Option, the Majority Shareholders may dispose
of and transfer a part of their Shares, as long as the
Shares owned by the Majority Shareholders represent in
excess of each and every one of the following: (i)
200,000,000 Shares, (ii) 50.1% of the Andina voting power,
and (iii) 25% of the total of the shares issued by Andina.
However, such Shares will remain subject to the Option, and
this exception will only exist as long as the Series A and
Series B share structure provided in the Amendments remains
in place without any changes and the Majority Shareholders
are in full compliance with the provisions of the Shareholders
Agreement (including the provisions of Article 4).
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<PAGE>
For purposes of the Option Agreement, the following
definitions shall apply:
"Exercise Condition" shall mean: (i) any change in the
direct or indirect ownership of shares or other
ownership interests of the Majority Shareholders such
that the Majority Shareholder Partner Group collectively
owns less than 75% of the voting power or equity
interests of any of the Majority Shareholders; (ii)
subject to certain exceptions (such as consent by KO),
any change in the shares issued by Andina or in the
ownership of Andina shares (whether for transfers,
sales, reorganization, merger, subdivision of shares or
otherwise) with the result that the Majority
Shareholders own less than 50.1% of the voting power of
Andina or less than 25% of the total of shares issued by
Andina; (iii) the transfer of all or substantially all
of the assets of Andina; or (iv) any event that enables
KO to terminate one or more bottling agreements between
KO and Andina (or its affiliates) accounting for more
than 30% of the unit case volume of Coca-Cola products
sold by Andina and its subsidiaries during the preceding
twelve months, due to a breach by Andina or a change of
control pursuant to such bottling agreements.
"Valuation Price" shall mean the price that the Majority
Shareholders would receive for the sale of their shares
of Andina in a transaction under market conditions
between a willing seller and a willing buyer as of the
date of the notification of the determination of the
Valuation Price. The Valuation Price shall be as
mutually agreed between the parties, or, if the parties
are unable to reach an agreement within the period of 30
calendar days, the Valuation Price will be determined
through a process involving investment bankers. For
purposes of determining the Valuation Price, the
investment banks shall assume that the bottling
agreements between KO and Andina (and its affiliates)
are in full force and effect even if such bottling
agreements have been terminated.
The Option shall terminate upon the occurrence of any of the
following:
(i) if the KO Parties dispose of shares of Andina to
unrelated third parties such that, as a result of such
disposition, the KO Parties own less than 23,500,000
Common shares (or of shares successors to them or
Common Shares, if the Series A Shares cease to exist)
of Andina;
(ii) if the KO Parties are diluted to below 4% of the
Common Stock or below 23,500,000 Series A Shares;
(iii) if the bottling agreements between KO and Andina
described in clause (iv) above are terminated by Andina
as a direct result of a breach of such agreements by KO
or if KO declines to negotiate in good faith with
respect to the renewal of such agreements;
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<PAGE>
(iv) one year after the termination by KO of the bottling
agreements described in clause (iv) above, unless the
option exercise process has been initiated; or
(v) the Shareholders' Agreement does not become effective.
OTHER AGREEMENTS
BOARD OBSERVER. On September 5, 1996, Andina,
Atlantico and the Majority Shareholders entered into a
letter agreement with KO, Interamerican and CC Argentina
pursuant to which Andina has agreed that, from the date of
such letter agreement until the Closing Date, CC Argentina
and Interamerican shall be entitled upon request to jointly
designate an observer to attend meetings of the Board of
Directors of Andina. However, the letter agreement provides
that such observer shall be excluded from meetings of the
Board of Directors of Andina at all times during which the
Board of Directors is discussing or considering any of the
transactions contemplated by the Stock Purchase Agreements,
the Shareholders' Agreement, the Option Agreement or the
other related agreements or any matter related thereto. A
copy of the letter agreement is attached hereto as Exhibit
99.7 and is incorporated herein by reference.
CICAN. Pursuant to the SPC Purchase Agreement, CC
Argentina has agreed to use its reasonable efforts to have
by December 1, 1996 a definitive agreement relating to a
reorganization of CICAN S.A., a producer of cans in
Argentina currently owned by CC Argentina ("CICAN"), which
would permit certain bottlers in KO's River Plate Division
(including Andina's bottling subsidiaries) to participate in
the ownership of CICAN. If such reorganization is not
agreed upon, CC Argentina has agreed to permit Andina to
invest in CICAN and to purchase cans from CICAN at CICAN's
cost.
ASSIGNMENT OF PREEMPTIVE RIGHTS. The Majority
Shareholders have entered into an agreement pursuant to
which the Majority Shareholders will assign that portion of
their rights to subscribe for additional shares of Common
Stock in the preemptive rights offering to the KO Parties
which is necessary to permit the KO Parties to acquire the
Acquired Shares.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 99.1 - Directors and Executive Officers
Exhibit 99.2 - Stock Purchase Agreement dated as of September 5, 1996 by
and among Embotelladora Andina S.A., Inversiones Freire
Ltda., Inversiones Freire Dos Ltda., Citicorp Banking
Corporation and Bottling Investment Limited
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<PAGE>
Exhibit 99.3 - Stock Purchase Agreement dated as of September 5, 1996 by
and among Embotelladora Andina S.A., Inversiones del
Atlantico S.A., Inversiones Freire Ltda., Inversiones
Freire Dos Ltda., The Coca-Cola Company, Coca-Cola
Interamerican Corporation, Coca-Cola de Argentina S.A.,
Citicorp Banking Corporation and Bottling Investment Limited
Exhibit 99.4 - Shareholders' Agreement dated as of September 5, 1996 by
and among Embotelladora Andina S.A., The Coca-Cola Company,
Coca-Cola Interamerican Corporation, Coca-Cola de Argentina
S.A., Bottling Investment Limited, Inversiones Freire
Ltda. and Inversiones Freire Dos Ltda.
Exhibit 99.5 - Stock Purchase Option Agreement and Custody Agreement dated
as of September 5, 1996 by and among Inversiones Freire Ltda.,
Inversiones Freire Dos Ltda., The Coca-Cola Company, Coca-Cola
Interamerican Corporation, Coca-Cola de Argentina S.A. and
Citibank N.A.
Exhibit 99.6 - Form of amendments to the Estatutos Sociales of
Embotelladora Andina S.A.
Exhibit 99.7 - Letter Agreement dated as of September 5, 1996, by and among
Embotelladora Andina S.A., Inversiones del Atlantico S.A.,
Inversiones Freire Ltda., Inversiones Freire Dos Ltda., The
Coca-Cola Company, Coca-Cola Interamerican Corporation,
Coca-Cola de Argentina S.A., Citicorp Banking Corporation and
Bottling Investment Limited
Exhibit 99.8 - Joint Filing Agreement dated as of September 13, 1996, by
and among The Coca-Cola Company, Coca-Cola Interamerican
Corporation, The Coca-Cola Export Corporation and Coca-Cola
de Argentina S.A.
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<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
THE COCA-COLA COMPANY
By: /s/ JAMES E. CHESTNUT
James E. Chestnut
Senior Vice President and
Chief Financial Officer
Date: September 13, 1996
COCA-COLA INTERAMERICAN CORPORATION
By: /s/ JAMES E. CHESTNUT
James E. Chestnut
Vice President and
Chief Financial Officer
Date: September 13, 1996
THE COCA-COLA EXPORT CORPORATION
By: /s/ JAMES E. CHESTNUT
James E. Chestnut
Senior Vice President and
Chief Financial Officer
Date: September 13, 1996
COCA-COLA DE ARGENTINA S.A.
By: /s/ GLENN JORDAN
Glenn Jordan
President
Date: September 13, 1996
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<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
99.1 Directors and Executive Officers
99.2 Stock Purchase Agreement dated as of September 5, 1996 by and
among Embotelladora Andina S.A., Inversiones Freire Ltda.,
Inversiones Freire Dos Ltda., Citicorp Banking Corporation and
Bottling Investment Limited
99.3 Stock Purchase Agreement dated as of September 5, 1996 by and
among Embotelladora Andina S.A., Inversiones del Atlantico S.A.,
Inversiones Freire Ltda., Inversiones Freire Dos Ltda., The
Coca-Cola Company, Coca-Cola Interamerican Corporation, Coca-Cola
de Argentina S.A., Citicorp Banking Corporation and Bottling
Investment Limited
99.4 Shareholders' Agreement dated as of September 5, 1996 by and among
Embotelladora Andina S.A., The Coca-Cola Company, Coca-Cola
Interamerican Corporation, Coca-Cola de Argentina S.A., Bottling
Investment Limited, Inversiones Freire Ltda. and Inversiones
Freire Dos Ltda.
99.5 Stock Purchase Option Agreement and Custody Agreement dated as of
September 5, 1996 by and among Inversiones Freire Ltda.,
Inversiones Freire Dos Ltda., The Coca-Cola Company, Coca-Cola
Interamerican Corporation, Coca-Cola de Argentina S.A. and
Citibank N.A.
99.6 Form of amendments to the Estatutos Sociales of Embotelladora
Andina S.A.
99.7 Letter Agreement dated as of September 5, 1996, by and among
Embotelladora Andina S.A., Inversiones del Atlantico S.A.,
Inversiones Freire Ltda., Inversiones Freire Dos Ltda., The
Coca-Cola Company, Coca-Cola Interamerican Corporation, Coca-Cola
de Argentina S.A., Citicorp Banking Corporation and Bottling
Investment Limited
99.8 Joint Filing Agreement dated as of September 13, 1996, by and
among The Coca-Cola Company, Coca-Cola Interamerican Corporation,
The Coca-Cola Export Corporation and Coca-Cola de Argentina S.A.
EXHIBIT 99.1
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is the name, business address and present occupation or
employment of each director and executive officer of The Coca-Cola Company,
The Coca-Cola Export Corporation, Coca-Cola Interamerican Corporation and
Coca-Cola de Argentina S.A. Except as indicated below, each such person
is a citizen of the United States. None of the directors and executive
officers named below own any Common Stock of Embotelladora Andina S.A.
Directors of The Coca-Cola Company who are also executive officers of
The Coca-Cola Company are indicated by an asterisk. Except as indicated
below, the business address of each executive officer of The Coca-Cola
Company, The Coca-Cola Export Corporation, Coca-Cola Interamerican
Corporation and Coca-Cola de Argentina S.A. is One Coca-Cola Plaza,
Atlanta, Georgia 30313.
<TABLE>
<CAPTION>
DIRECTORS OF THE COCA-COLA COMPANY
PRINCIPAL OCCUPATION
NAME OR EMPLOYMENT ADDRESS
<S> <C> <C>
Roberto C. Goizueta * Chairman of the Board of
Directors and Chief Executive
Officer of The Coca-Cola Company
M. Douglas Ivester * President and Chief Operating
Officer of The Coca-Cola Company
Herbert A. Allen President, Chief Executive Allen & Company
Officer and a Managing Director Incorporated
of Allen & Company Incorporated, 711 Fifth Avenue
a privately held investment New York, NY 10022
banking firm
Ronald W. Allen Chairman of the Board, President Delta Air Lines, Inc.
and Chief Executive Officer of Hartsfield International
Delta Air Lines, Inc., a major Airport
U.S. air transportation company Atlanta, GA 30320
Cathleen P. Black President of the Hearst Magazines Hearst Magazines
Division of The Hearst Corpora- 959 8th Avenue
tion, a major media and commu- New York, NY 10019
nications company
Warren E. Buffett Chairman of the Board of Berkshire Hathaway Inc.
Directors and Chief Executive 1440 Kiewit Plaza
Officer of Berkshire Hathaway Omaha, NE 68131
Inc., a diversified holding
company
Charles W. Duncan, Jr. Private investor Duncan Interests
600 Travis, Suite 6100
Houston, TX 77002-3007
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
DIRECTORS OF THE COCA-COLA COMPANY
PRINCIPAL OCCUPATION
NAME OR EMPLOYMENT ADDRESS
<S> <C> <C>
Susan B. King Leader in Residence, Hart Hart Leadership Program
Leadership Program, Duke Terry Sanford Institute
University, a program for the of Public Policy
development and advancement of Duke University
leadership and management Box 90248
skills in the public and private Durham, NC 27708-0248
sectors
Donald F. McHenry University Research Professor Edmund A. Walsh School
of Diplomacy and International of Foreign Service
Affairs, Georgetown University; Georgetown University
President of The IRC Group, a Washington, D.C. 20057
New York City and Washington,
D.C. consulting firm
Paul F. Oreffice Retired as Chairman of the Board 2630 Barcelona Drive
of Directors of The Dow Chemical Fort Lauderdale, FL 33301
Company in 1992 (The Dow Chemical
Company is a diversified chemical,
metals, plastics and packaging
company)
James D. Robinson III Chairman and Chief Executive J.D. Robinson Inc.
Officer of RRE Investors, LLC, a 22nd Floor
private venture investment firm; 126 East 56th Street
President of J.D. Robinson Inc., New York, NY 10022
a strategic advisory company;
Senior Advisor to Trust Company
of the West, an insurance and
investment management firm
Peter V. Ueberroth Investor and Managing Director, The Contrarian Group, Inc.
The Contrarian Group, Inc., a Suite 900
management company 500 Newport Center Drive
Newport Beach, CA 92660
James B. Williams Chairman of the Board of SunTrust Banks, Inc.
Directors and Chief Executive P.O. Box 4418
Officer, SunTrust Banks, Inc., Atlanta, GA 30302
a bank holding company
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS OF THE COCA-COLA COMPANY
PRINCIPAL OCCUPATION
NAME OR EMPLOYMENT ADDRESS
<S> <C> <C>
James E. Chestnut Senior Vice President and Chief
Financial Officer
Mr. Chestnut is a citizen of
the United Kingdom.
Jack L. Stahl Senior Vice President and President
of the North America Group
Weldon H. Johnson Senior Vice President and
President of the Latin America
Group
E. Neville Isdell Senior Vice President and
President of the Greater Europe
Group
Mr. Isdell is a citizen of the
United Kingdom and Northern
Ireland.
Douglas N. Daft Senior Vice President and President
of the Middle and Far East Group
Mr. Daft is a citizen of Australia.
Carl Ware Senior Vice President and President
of the Africa Group
Joseph R. Gladden, Jr. Senior Vice President and General
Counsel
Sergio S. Zyman Senior Vice President and Chief
Marketing Officer
Earl T. Leonard, Jr. Senior Vice President,
Corporate Affairs
Anton Amon Senior Vice President and Manager
of the Product Integrity Division
George Gourlay Senior Vice President and Manager
of the Technical Operations
Division
Ralph H. Cooper Senior Vice President and Coca-Cola Foods
President and Chief Executive 2000 St. James Place
Officer of Coca-Cola Foods Houston, TX 77056
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
DIRECTORS AND EXECUTIVE OFFICERS OF THE COCA-COLA EXPORT CORPORATION
PRINCIPAL OCCUPATION
NAME AND TITLE OR EMPLOYMENT ADDRESS
<S> <C> <C>
Roberto C. Goizueta Chairman of the Board of
Chairman of the Board Directors and Chief Executive
and a Director Officer of The Coca-Cola Company
M. Douglas Ivester President and Chief Operating
President and a Director Officer of The Coca-Cola Company
James E. Chestnut Senior Vice President and Chief
Senior Vice President, Financial Officer, The Coca-Cola
Chief Financial Officer Company
and a Director
Mr. Chestnut is a citizen of
the United Kingdom.
Weldon H. Johnson Senior Vice President and
Senior Vice President President of the Latin America
Group, The Coca-Cola Company
E. Neville Isdell Senior Vice President and
Senior Vice President President of the Greater Europe
Group, The Coca-Cola Company
Mr. Isdell is a citizen of the
United Kingdom and Northern
Ireland.
</TABLE>
<TABLE>
<CAPTION>
DIRECTORS AND EXECUTIVE OFFICERS OF COCA-COLA INTERAMERICAN CORPORATION
PRINCIPAL OCCUPATION
NAME AND TITLE OR EMPLOYMENT ADDRESS
<S> <C> <C>
Roberto C. Goizueta Chairman of the Board of
Chairman of the Board Directors and Chief Executive
and a Director Officer of The Coca-Cola Company
M. Douglas Ivester President and Chief Operating
President and a Director Officer of The Coca-Cola Company
James E. Chestnut Senior Vice President and Chief
Vice President, Chief Financial Officer, The Coca-Cola
Financial Officer Company
and a Director
Mr. Chestnut is a citizen of
the United Kingdom.
Weldon H. Johnson Senior Vice President and
Vice President President of the Latin America
Group, The Coca-Cola Company
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
DIRECTORS AND EXECUTIVE OFFICERS OF COCA-COLA DE ARGENTINA S.A.
PRINCIPAL OCCUPATION
NAME AND TITLE OR EMPLOYMENT ADDRESS
<S> <C> <C>
Luis Jorge Arzeno Senior Vice President, Coca-Cola de Argentina S.A.
Chairman and Director Coca-Cola International and Paraguay 733
Senior Advisor, Latin America 1057 Buenos Aires
Group, The Coca-Cola Company Argentina
Mr. Arzeno is a citizen of
Argentina.
Fernando Marin Executive Vice President and Coca-Cola de Argentina S.A.
Director Finance Director, River Plate Paraguay 733
Division of the Latin America 1057 Buenos Aires
Group, The Coca-Cola Company Argentina
Mr. Marin is a citizen of Chile.
Glenn Jordan Vice President, Coca-Cola Coca-Cola de Argentina S.A.
President International and President, Paraguay 733
River Plate Division of the 1057 Buenos Aires
Latin America Group, The Argentina
Coca-Cola Company
Mr. Jordan is a citizen of
Colombia.
Juan Manuel Almiron Senior Vice President and Asst. Coca-Cola de Argentina S.A.
Vice President to the President of the Paraguay 733
River Plate Division of the 1057 Buenos Aires
Latin America Group, The Argentina
Coca-Cola Company
Mr. Almiron is a citizen of
Argentina.
</TABLE>
EXHIBIT 99.2
STOCK PURCHASE AGREEMENT
by and among
EMBOTELLADORA ANDINA S.A.,
INVERSIONES FREIRE LTDA.,
INVERSIONES FREIRE DOS LTDA.,
CITICORP BANKING CORPORATION
and
BOTTLING INVESTMENT LIMITED
Dated as of September 5, 1996
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<PAGE>
STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
Page
ARTICLE 1 PURCHASE AND SALE OF SHARES 1
1.1 Purchase and Sale of Acquired Andina Shares 1
1.2 Aggregate Subscription Price 2
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF ANDINA 2
2.1 Power and Authority; Enforceability 2
2.2 Organization 2
2.3 Capital Stock 3
2.4 Andina Reports; Financial Statements 4
2.5 No Undisclosed Liabilities 5
2.6 No Conflict 5
2.7 Litigation and Claims 6
2.8 Employee Contracts, Union Agreements
and Benefit Plans 6
2.9 Labor Relations 7
2.10 Environmental Matters 7
2.11 Required Licenses and Permits 8
2.12 Insurance Policies 8
2.13 Contracts and Commitments 9
2.14 Absence of Certain Changes or Events 9
2.15 Compliance With Law 11
2.16 Tax Matters 11
2.17 Status as a Foreign Issuer;
No Significant U.S. Presence 13
2.18 Other Registration Rights 13
2.19 Takeover Statutes 13
2.20 Vote Required; Board Recommendation 13
2.21 No Third-Party Invasion of Territory Claims 13
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF
CITICORP AND SPC 13
3.1 Power and Authority; Enforceability 14
3.2 Organization 14
3.3 No Conflict 14
ARTICLE 4 CERTAIN COVENANTS AND AGREEMENTS 14
4.1 Conduct of Business by Andina 14
4.2 Inspection and Access to Information;
Confidentiality 15
4.3 Information Statement 16
4.4 New York Stock Exchange Matters 16
4.5 Shareholder Matters 17
4.6 Preemptive Rights Offering; Reclassification 17
4.7 Further Assurances 17
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4.8 Public Announcements 17
4.9 Assignment of Preemptive Rights 18
4.10 SPC Covenants 18
ARTICLE 5 CONDITIONS 18
5.1 Condition to Each Party's Obligations 18
5.2 Conditions to Obligations of Citicorp
and SPC 18
5.3 Conditions to Obligations of Andina Parties 19
5.4 No Other Conditions; Effect of
Certain Breaches 20
ARTICLE 6 ACTIONS REQUIRED AT CLOSING 20
6.1 Share Certificates of Andina 20
6.2 Aggregate Subscription Price 20
6.3 Further Assurances 20
ARTICLE 7 INDEMNIFICATION 21
7.1 Survival 21
7.2 Indemnification by Andina Parties 21
7.3 Indemnification by Citicorp and SPC 22
7.4 Notice of Claim 22
7.5 Third Party Claims 23
ARTICLE 8 TERMINATION 24
8.1 Termination and Abandonment 24
8.2 Effect of Termination 24
ARTICLE 9 MISCELLANEOUS 24
9.1 Entire Agreement; Amendment 24
9.2 Successors and Assigns 25
9.3 Schedules and Exhibits 25
9.4 Counterparts 25
9.5 Headings 25
9.6 Modification and Waiver 25
9.7 Notices 25
9.8 GOVERNING LAW 26
9.9 Construction 26
9.10 Specific Performance 27
9.11 Consent to Jurisdiction, Etc. 27
9.12 Translations 27
9.13 No Third-Party Beneficiaries 27
9.14 "Including" 28
9.15 References 28
9.16 Material Adverse Effect 28
9.18 Exchange Rate 28
9.19 Severability 28
<PAGE>
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), made and
entered into this 5th day of September, 1996, by and among
EMBOTELLADORA ANDINA S.A., a corporation organized under the
laws of Chile ("Andina"), INVERSIONES FREIRE LTDA., a limited
liability company organized under the laws of Chile ("Freire
One"), INVERSIONES FREIRE DOS LTDA., a limited liability
company organized under the laws of Chile ("Freire Two," and
together with Freire One, the "Majority Shareholders"),
CITICORP BANKING CORPORATION, a banking corporation organized
under the laws of Delaware, U.S.A. ("Citicorp"), and BOTTLING
INVESTMENT LIMITED, a corporation organized under the laws of
the Cayman Islands ("SPC").
W I T N E S S E T H:
WHEREAS, the Majority Shareholders own of record and
beneficially 200,001,969 shares of the capital stock of Andina
representing approximately 56.72% of the outstanding shares of
capital stock of Andina;
WHEREAS, Citicorp owns of record and beneficially all of
the outstanding shares of capital stock of SPC;
WHEREAS, the parties hereto desire to effect the issuance
and sale of certain shares of capital stock of Andina to SPC
pursuant to this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements set forth herein, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES
Upon the terms and subject to the conditions of this
Agreement, the parties hereto agree as follows:
1.1 PURCHASE AND SALE OF ACQUIRED ANDINA SHARES. SPC
agrees to purchase from Andina and Andina agrees to sell,
transfer, convey and deliver to SPC at the Closing (as defined
in Article 6) good and marketable title in and to 24,000,000
fully paid and nonassessable shares of the existing Common
Stock (the "Common Stock") of Andina (the "Acquired Andina
Shares"), representing approximately 6.37% of the total issued
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and outstanding shares of capital stock of Andina after giving
effect to such issuance (but without giving effect to any
exercise of preemptive rights on the part of Andina's
shareholders).
1.2 AGGREGATE SUBSCRIPTION PRICE. In exchange for the
issuance of the Acquired Andina Shares pursuant to Section 1.1,
SPC agrees to pay Andina at the Closing by wire transfer in
immediately available funds an amount in Chilean Pesos equal to
24,000,000 shares times the Per Share Subscription Price (as
hereinafter defined) (the "Aggregate Subscription Price"). The
"Per Share Subscription Price" shall mean the per share price
of Andina Common Stock fixed by the Andina Board of Directors
in accordance with Section 4.6 as the purchase price of shares
of Andina Common Stock in connection with the Preemptive Rights
Offering (as defined in Section 4.6).
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF ANDINA
AND THE MAJORITY SHAREHOLDERS
Andina and the Majority Shareholders hereby jointly and
severally represent and warrant to Citicorp and SPC as follows
(except that the representations and warranties in Sections
2.1, 2.2, 2.3 and 2.6 relating to the Majority Shareholders and
the representations and warranties in Section 2.17 to the
extent relating to the ultimate parent entity of Andina are
made severally by the Majority Shareholders only):
2.1 POWER AND AUTHORITY; ENFORCEABILITY.
(a) Each of Andina, the Majority Shareholders and
Inversiones del Atlantico S.A. ("Atlantico") (such parties
sometimes being referred to herein collectively as the "Andina
Parties") has all requisite power and authority to execute and
deliver this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby.
Subject to the receipt of approval on the part of the
shareholders of Andina, the execution, delivery and performance
of this Agreement by each of Andina, the Majority Shareholders
and Atlantico and the consummation by each of them of the
transactions contemplated hereby have been duly authorized by
all required corporate action.
(b) This Agreement has been duly executed and
delivered by each of the Andina Parties which is a party
thereto and constitutes the legal, valid and binding obligation
of each such person enforceable against each such person in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization and other laws affecting the rights
of creditors generally.
2.2 ORGANIZATION.
(a) Andina is a corporation duly organized and
validly existing under the laws of Chile; Atlantico is a
sociedad anonima duly organized and validly existing under
the laws of Argentina; and each of the Majority
Shareholders is a limited liability company duly
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organized and validly existing under the laws of Chile. Each of
the Andina Parties has all requisite power and authority, corporate
or otherwise, to carry on and conduct its business as it is now
being conducted and to own or lease its properties and assets, and
is duly qualified in each of the jurisdictions in which the conduct
of its business or the ownership of its properties and assets
requires such qualification, except where the failure to so qualify
would not have a Material Adverse Effect (as defined in Section
9.16) on the Andina Parties.
(b) Schedule 2.2(b) sets forth (i) a true and
complete list of the names of all entities in which Andina
directly or indirectly owns beneficially or of record a
majority of the voting power or equity interests (the "Andina
Subsidiaries" and each, an "Andina Subsidiary") for purposes of
the Audited Andina Financial Statements (as defined in
Section 2.4) and the jurisdiction of each Andina Subsidiary's
incorporation or organization and (ii) every other ownership
interest of Andina and the Andina Subsidiaries in any
partnership or commercial corporation, joint venture or other
entity. Each Andina Subsidiary is a corporation duly organized
and validly existing under the laws of its jurisdiction of
incorporation and has all requisite power and authority,
corporate or otherwise, to carry on and conduct its business as
it is now being conducted, and to own or lease its properties
and assets, and is duly qualified in each of the jurisdictions
in which the conduct of the business of such Andina Subsidiary
or the ownership of such properties and assets requires such
qualification except where the failure to do so would not have
a Material Adverse Effect on the Andina Parties. Except as set
forth in Schedule 2.2(b), there are no outstanding options,
subscriptions, rights or other commitments or obligations on
the part of Andina, Atlantico, any other Andina Subsidiary or
any of the Majority Shareholders to issue or dispose of or to
redeem or acquire any shares of capital stock of Andina or any
Andina Subsidiary or other ownership interest therein.
(c) The copies of the articles of incorporation
(escritura constitutiva) and Estatutos Sociales of Andina,
Atlantico and each other Andina Subsidiary and the Majority
Shareholders that have been delivered to Citicorp and SPC are
the complete, true and correct articles of incorporation and
Estatutos Sociales of Andina, the Andina Subsidiaries and the
Majority Shareholders.
(d) Except as noted in Schedule 2.2(d), Andina,
directly or indirectly, has full power, right and authority to
vote all shares of capital stock of each Andina Subsidiary.
Except as noted in Schedule 2.2(d), Andina is not party to or
bound by any agreement affecting or relating to its right to
transfer or vote any shares of capital stock of any Andina
Subsidiary.
2.3 CAPITAL STOCK.
(a) The authorized capital stock of Andina and
each Andina Subsidiary and the number of issued and
outstanding shares thereof is set forth in Schedule 2.3(a)(i).
All of such issued and outstanding shares of capital stock
are validly issued, fully paid and nonassessable and, in the
case of shares of the Andina Subsidiaries, owned of record and
beneficially by Andina, directly or indirectly, in the percentages
set forth in Schedule 2.3(a)(i). The Majority Shareholders
own of record and beneficially 200,001,969 shares of the
capital stock of Andina, representing approximately 56.72%
of the outstanding shares of capital stock
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of Andina. No such shares have been issued in violation of,
or will be subject to, any preemptive or any subscription rights.
Except as set forth in Schedule 2.3(a)(ii), none of Andina, the
Majority Shareholders and the Andina Subsidiaries has outstanding,
and none is bound by, any subscriptions, options, warrants, puts,
calls, commitments, agreements, arrangements or rights of any
character (including employee benefit plans) obligating it to
issue, sell, purchase, redeem, repurchase, acquire, register, vote
or transfer any shares of capital stock or any other equity security
of Andina or any Andina Subsidiary, including any right of
conversion or exchange under any outstanding security or other
instrument. All issuances, transfers, purchases or redemptions of
the capital stock of Andina and each of the Andina Subsidiaries
have been in compliance in all material respects with all
applicable agreements and all applicable laws, and all taxes
thereon payable by Andina or the Andina Subsidiaries have been
paid. There are no shares of capital stock held in the
treasury of Andina or any Andina Subsidiary. Upon delivery to
SPC pursuant to Section 1.1, the Acquired Andina Shares will be
duly and validly issued and fully paid and nonassessable, free
and clear of all preemptive rights, subscription rights, liens,
security interests, encumbrances, claims, charges and
restrictions (other than such preemptive rights, subscription
rights, liens, security interests, encumbrances, claims,
charges and restrictions that may arise from the act of SPC).
(b) Each of the Majority Shareholders is
beneficially owned in equal shares by the persons set forth in
Schedule 2.3(b).
2.4 ANDINA REPORTS; FINANCIAL STATEMENTS
(a) Andina has previously made available to Citicorp
and SPC complete and correct copies of all filings made by
Andina with the Superintendencia de Valores y Seguros (the
"SVS") and the United States Securities and Exchange Commission
(the "SEC") since January 1, 1993, in each case including all
exhibits thereto and items incorporated therein by reference
(collectively, the "Andina SEC Documents"). As of their
respective dates, the Andina SEC Documents did not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading. Since January 1, 1993, Andina
has filed all registration statements, reports and documents
(x) with the SVS required to be filed by it pursuant to
applicable Chilean laws and regulations and (y) with the SEC
required to be filed by it pursuant to the United States
Securities Act of 1933, as amended (the "Securities Act"), the
United States Securities Exchange Act of 1934, as amended (the
"Exchange Act") and the rules and regulations of the SEC
promulgated thereunder, each of which complied as to form, at
the time such registration statement, report or document was
filed, in all material respects with the requirements of
applicable Chilean laws and regulations, in the case of
clause (x), or the Securities Act, the Exchange Act and
applicable rules and regulations of the SEC thereunder in the
case of clause (y).
(b) Andina has furnished Citicorp and SPC (i) the
audited balance sheets of Andina and the Andina Subsidiaries,
translated into U.S. Dollars, as of December 31, 1994 and 1995,
and the related audited statements of income, retained earnings
and cash flows for the years then ended (the "Audited Andina
Financial Statements"), and (ii) the unaudited balance
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sheets of Andina and the Andina Subsidiaries as of March 31, 1996,
and the related unaudited statements of income, retained earnings
and cash flows for the three-month periods ended March 31, 1995
and 1996 (the "Interim Andina Financial Statements"). The
Audited Andina Financial Statements have been prepared and are
presented in conformity with generally accepted accounting
principles in Chile ("Chilean GAAP") consistently applied
throughout the periods involved (except as noted therein). The
Audited Andina Financial Statements present fairly in all
material respects the financial position and the results of
operations and cash flows of Andina and the Andina Subsidiaries
as of their respective dates and for the respective periods
covered thereby. The Interim Andina Financial Statements
present fairly in all material respects the financial position
of Andina and the Andina Subsidiaries as of March 31, 1996, and
the related results of their operations for the three-month
period then ended (subject to normal and recurring year-end
adjustments). As used in this Agreement, the term "Andina
Financial Statements" means, collectively, the Audited Andina
Financial Statements and the Interim Andina Financial
Statements. The audited balance sheet as of December 31, 1995
included in the Audited Andina Financial Statements is referred
to herein as the "1995 Andina Balance Sheet".
2.5 NO UNDISCLOSED LIABILITIES Neither Andina nor any
Andina Subsidiary is subject to any obligation or liability of
any nature (including contingent liabilities and unasserted
claims), which would be required by Chilean GAAP to be
reflected on a consolidated balance sheet of Andina or the
notes thereto and which is not reflected on the 1995 Andina
Balance Sheet or the notes thereto, other than obligations
pursuant to this Agreement or the transactions contemplated
hereby and liabilities which individually or in the aggregate
do not have a Material Adverse Effect on the Andina Parties.
2.6 NO CONFLICT The execution, delivery and performance
of this Agreement, the consummation by the Andina Parties of
the transactions contemplated hereby and the fulfillment of and
compliance with the terms and conditions hereof do not and will
not (i) violate or conflict with any of the provisions of the
Estatutos Sociales of Andina, Atlantico, any of the Majority
Shareholders or any Andina Subsidiary, (ii) violate, conflict
with or result in a breach or default under or cause the
termination, modification or acceleration of any term or
condition of any mortgage, indenture, contract, license, permit
or other agreement, document or instrument to which any Andina
Party or any Andina Subsidiary is a party or by which any
Andina Party or any Andina Subsidiary or any of its properties
may be bound, in each case except for any such violations,
conflicts, breaches, defaults, terminations, modifications or
accelerations that individually or in the aggregate would not
have a Material Adverse Effect on the Andina Parties,
(iii) violate any provision of applicable laws or regulations
by which any Andina Party or any Andina Subsidiary or any of
its properties may be bound or any order, judgment, decree or
ruling of any governmental or arbitral authority or court of
law applicable to any Andina Party or any Andina Subsidiary or
its respective assets, except those which individually or in
the aggregate would not have a Material Adverse Effect on the
Andina Parties, (iv) result in the creation or imposition of
any lien, claim, charge, restriction, security interest or
encumbrance of any kind upon any material asset of any Andina
Party or any Andina Subsidiary, except those which individually
or in the aggregate would not have a Material Adverse Effect on
the Andina Parties or (v) require the approval, authorization or act
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of, or the making by any Andina Party or any Andina
Subsidiary of any declaration, filing or registration with, any
federal, state or local authority, except those the absence of
which would not have a Material Adverse Effect on the Andina
Parties.
2.7 LITIGATION AND CLAIMS. Except as set forth in
Schedule 2.7, there are no lawsuits, claims, actions,
investigations, indictments or information, or administrative,
arbitration or other proceedings pending, or, to the knowledge
of Andina or the Majority Shareholders, threatened against
Andina or any Andina Subsidiary or involving any of their
properties or businesses which (individually or in the
aggregate), if adversely determined, would result in a Material
Adverse Effect on the Andina Parties, and neither Andina nor
the Majority Shareholders has any knowledge of any grounds for
the assertion of any claim which if adversely determined would
have such an effect. There are no material judgments, orders,
injunctions, decrees, stipulations or awards (whether rendered
by a court, administrative agency, or by arbitration, pursuant
to a grievance or other procedure) against or relating to
Andina or any Andina Subsidiary.
2.8 EMPLOYEE CONTRACTS, UNION AGREEMENTS AND BENEFIT
PLANS
(a) As used in this Agreement, the term "Andina
Employee Benefit Plans" means all agreements, arrangements,
commitments, policies or understandings of any kind (whether
written or oral) which relate to compensation, remuneration or
benefits in any way and/or which constitute employment,
consulting or collective bargaining contracts, or deferred
compensation, pension, multiemployer, profit sharing, thrift,
retirement, stock ownership, stock appreciation rights, bonus,
stock option, stock purchase or other compensation commitments,
benefit plans, arrangements or plans, including all welfare
plans and all union-sponsored plans, of or pertaining to the
present or former employees (including retirees), directors or
independent contractors (or their dependents, spouses or
beneficiaries) of Andina and each Andina Subsidiary or any
predecessors in interest thereto, that are currently in effect
or as to which Andina or any Andina Subsidiary has any ongoing
liability or obligation whatsoever.
(b) Andina and each Andina Subsidiary and its
predecessors in interest have complied with all of their
respective obligations with respect to all Andina Employee
Benefit Plans, including the payment of all social security and
other contributions required by law, except in each case for
failures to comply that individually or in the aggregate would
not have a Material Adverse Effect on the Andina Parties, and
the Andina Employee Benefit Plans have been maintained in
compliance with all applicable laws and regulations
(c) No Andina Employee Benefit Plan is currently
under investigation, audit or review by any governmental
authority or agency.
(d) No Andina Employee Benefit Plan is liable for
any Taxes, except in the ordinary course and for current
periods.
(e) Except as set forth on Schedule 2.8, to the
knowledge of Andina or the Majority Shareholders, there are no
claims, pending or threatened, by any participant in any of
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the Andina Employee Benefit Plans and no basis for any such
claim or claims exists, except for benefits to participants
or beneficiaries in accordance with the terms of the Andina
Employee Benefit Plans and except for claims that individually
or in the aggregate would not have a Material Adverse Effect on
the Andina Parties.
2.9 LABOR RELATIONS. Except as set forth in Schedule
2.9:
(a) Andina and each Andina Subsidiary is in
compliance with all applicable laws and collective bargaining
agreements respecting employment and employment practices,
terms and conditions of employment, wages and hours and
occupational safety and health, which if not complied with
(individually or in the aggregate) would have a Material
Adverse Effect on the Andina Parties.
(b) There is no social security or labor complaint
and, no charges, investigations, administrative proceedings or
formal complaints of discrimination against or involving Andina
or any Andina Subsidiary pending or, to the knowledge of Andina
or the Majority Shareholders, threatened before any regulatory
agency or any court of law, which, if determined adversely to
Andina or any Andina Subsidiary, individually or in the
aggregate would have a Material Adverse Effect on the Andina
Parties.
(c) There is no labor strike, dispute, slowdown or
stoppage pending or threatened against Andina or any Andina
Subsidiary, except for threatened actions which, if realized,
individually or in the aggregate would not have a Material
Adverse Effect on the Andina Parties.
(d) No organizational drive exists or has existed
within the past twenty-four (24) months respecting the
employees of Andina or any Andina Subsidiary or any predecessor
thereof, except for those which individually or in the
aggregate did not and will not have a Material Adverse Effect
on the Andina Parties.
(e) No grievance proceeding or arbitration
proceeding arising out of or under any collective bargaining
agreement is pending against Andina or any Andina Subsidiary,
or, to the knowledge of Andina or the Majority Shareholders,
threatened, and no basis for any claim therefor exists, except
for such proceedings or claims which individually or in the
aggregate would not have a Material Adverse Effect on the
Andina Parties.
2.10 ENVIRONMENTAL MATTERS. Except as set forth in
Schedule 2.10:
(a) Except for failures to comply which would not
individually or in the aggregate have a Material Adverse Effect
on the Andina Parties, Andina and each Andina Subsidiary is in
compliance with all applicable laws and regulations relating to
pollution or the protection of human health and the environment
(including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) and with all
applicable requirements and obligations contained in such laws
and regulations and with any orders or judgments of any
government agency or court of law relating thereto.
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(b) Andina and each Andina Subsidiary has obtained
all permits, licenses and other authorizations and has filed
all notices which are required to be obtained or filed by it
for the operation of its business under all applicable laws
relating to pollution or the protection of human health and the
environment, except for failures to obtain or file any of the
foregoing which individually or in the aggregate would not have
a Material Adverse Effect on the Andina Parties.
(c) Andina and each Andina Subsidiary is in
compliance with all terms and conditions of such required
permits, licenses and authorizations, except for noncompliance
therewith which individually or in the aggregate would not have
a Material Adverse Effect on the Andina Parties.
(d) To the knowledge of Andina or the Majority
Shareholders, and based on current (or enacted but not yet
effective) laws, regulations and interpretations thereof, as
currently administered, with respect to Andina or any Andina
Subsidiary or its business, there are no past or present
events, conditions, circumstances, activities, practices or
plans which may interfere with or prevent continued compliance,
or which may give rise to any liability, or otherwise form the
basis of any claim, action, proceeding or investigation, based
on or related to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling, or the emission, discharge, release or threatened
release into the environment, of any pollutant, contaminant or
hazardous or toxic material or waste, except for any of the
foregoing which individually or in the aggregate would not have
a Material Adverse Effect on the Andina Parties.
2.11 REQUIRED LICENSES AND PERMITS. Andina and each
Andina Subsidiary has all licenses, permits or other
authorizations necessary for the production and sale of its
products in the manner currently produced and sold, and the
conduct of its business as now conducted, except for failures
to have the same which would not individually or in the
aggregate have a Material Adverse Effect on the Andina Parties.
2.12 INSURANCE POLICIES. As used in this Agreement, the
term "Andina Insurance Policies" means all insurance policies
in force naming Andina or any Andina Subsidiary as an insured
or beneficiary or as a loss payable payee. Except as set forth
in Schedule 2.12, neither Andina nor any Andina Subsidiary has
received notice of any pending or threatened cancellation or
premium increase (retroactive or otherwise) with respect to any
of the Andina Insurance Policies, and Andina and each Andina
Subsidiary is in compliance with all conditions contained
therein, except for such cancellations, increases or failures
to comply which individually or in the aggregate would not have
a Material Adverse Effect on the Andina Parties. There are no
material pending claims against such insurance by Andina or any
Andina Subsidiary as to which insurers are defending under
reservation of rights or have denied liability, and there
exists no material claim under such insurance that has not been
properly filed by Andina or each Andina Subsidiary.
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2.13 CONTRACTS AND COMMITMENTS.
(a) As used in this Agreement, the term "Andina
Contract" means any material contract, agreement, promissory
note, debt instrument, or legally binding commitment,
arrangement, undertaking or understanding to which Andina or
any Andina Subsidiary is a party or by which it is bound or to
which it or its property is subject, whether written or oral
and including without limitation each and every amendment,
modification or supplement thereto.
(b) Andina and each Andina Subsidiary is in
compliance in all respects with all terms of the Andina
Contracts, except for noncompliance which individually or in
the aggregate would not have a Material Adverse Effect on the
Andina Parties. To the knowledge of Andina or the Majority
Shareholders, (i) except as set forth on Schedule 2.13, there
is no bankruptcy, insolvency or similar proceeding with respect
to any party to an Andina Contract having any material
executory obligations thereunder; (ii) all such Andina
Contracts are valid and binding, are in full force and effect
and are enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization and other
laws affecting the rights of creditors generally; and (iii) no
event has occurred and is continuing which alone or in
combination with any other event would constitute a default
under any such Andina Contract by any party thereto which,
individually or in the aggregate with other such events, would
have a Material Adverse Effect on the Andina Parties.
2.14 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Since March 31, 1996, there has been no material
adverse change in the financial condition or business of Andina
and the Andina Subsidiaries taken as a whole.
(b) Except as disclosed in Schedule 2.14(b) or in
the Andina SEC Documents filed with the SEC, or in any other
Schedule hereto, and except for the transactions contemplated
by this Agreement, since March 31, 1996 Andina and each of the
Andina Subsidiaries has conducted its business only in the
ordinary course and consistent with past practice.
(c) Except as disclosed in Schedule 2.14(c) or in
the Andina SEC Documents filed with the SEC, or in any other
Schedule hereto, from March 31, 1996 to the date hereof, each
of Andina and the Andina Subsidiaries has:
(i) neither changed nor amended its Estatutos
Sociales or similar charter documents;
(ii) other than pursuant to the exercise of
employee stock options outstanding on the date
hereof and pursuant to Andina Employee Benefit Plans,
not issued, sold or granted options, warrants or
rights to purchase or subscribe to, or entered
into any arrangement or contract with respect to
the issuance or sale of any of the capital
stock of Andina, Atlantico or any other Andina
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Subsidiary or rights or obligations convertible into
or exchangeable for any shares of the capital stock of
Andina, Atlantico or any other Andina Subsidiary and not
altered the terms of any presently outstanding options or
made any changes (by split-up, combination, reorganization
or otherwise) in the capital structure of Andina,
Atlantico or any other Andina Subsidiary;
(iii) other than pursuant to the exercise of
employee stock options outstanding on the date
hereof, not declared, paid or set aside for payment
any dividend or other distribution in respect of the
capital stock or other equity securities of Andina or
Atlantico and not redeemed, purchased or otherwise
acquired any shares of the capital stock or other
securities of Andina, Atlantico or any of the other
Andina Subsidiaries, or rights or obligations
convertible into or exchangeable for any shares of
the capital stock or other securities of Andina,
Atlantico or any other Andina Subsidiary or
obligations convertible into such, or any options,
warrants or other rights to purchase or subscribe to
any of the foregoing;
(iv) not merged or consolidated with any other
person or acquired or entered into an agreement to
acquire stock or assets of any business or entity in
an amount in excess of U.S. $1,000,000;
(v) not (A) created, incurred or assumed any
long-term indebtedness, or letters of credit or
similar obligations (including obligations in respect
of capital leases which individually or in the
aggregate involve annual payments in excess of
U.S.$1,000,000) in excess of U.S. $10,000,000 or,
except in the ordinary course of business under
existing lines of credit, created, incurred or
assumed any short-term debt for borrowed money, (B)
assumed, guaranteed, endorsed or otherwise become
liable or responsible (whether directly, contingently
or otherwise) for the obligations of any other person
other than Andina, Atlantico or any other Andina
Subsidiary in excess of U.S. $50,000 (except in the
ordinary course of business and consistent with past
practice), (C) made any loans or advances to any
other person in excess of U.S. $10,000, except in the
ordinary course of business and consistent with past
practice, or (D) made capital expenditures not
reflected in Andina's current business plan involving
in excess of U.S.$3,000,000 in the aggregate;
(vi) not granted any increase in the
compensation of officers, directors or employees,
whether now or hereafter payable (except for employee
compensation increases in the ordinary course of
business and consistent with past practice);
(vii) not sold or otherwise disposed of in
any transaction or related series of transactions
assets having a value greater than U.S. $1,000,000 in
the aggregate;
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(viii) not waived any material claims or
rights except in the ordinary course of business;
(ix) not entered into any agreement involving
payments annually in excess of U.S. $1,000,000 or in
the aggregate in excess of U.S. $10,000,000, except
in the ordinary course of business;
(x) not entered into any transaction with any
of the Majority Shareholders;
(xi) not commenced, defended or settled any
litigation or arbitration in which the aggregate
amount involved is in excess of U.S. $1,000,000;
(xii) not assumed or incurred any lien or
similar encumbrance on any of its assets in an amount
in excess of U.S. $1,000,000 in the aggregate;
(xiii) not made any material change in its
accounting principles, methods or practices or
amortization policies or rates; or
(xiv) not entered into any binding agreement
to do any of the foregoing.
2.15 COMPLIANCE WITH LAW. Except for failures to comply
which would not individually or in the aggregate have a
Material Adverse Effect on the Andina Parties, neither Andina
nor any Andina Subsidiary is or has been (by virtue of any
action, omission to act, contract to which it is a party or any
occurrence or state of facts whatsoever) in violation of any
applicable laws, ordinances, regulations, orders or decrees or
any other requirement of any governmental agency or court of
law binding upon it, or relating to its properties, employees
or business, or its advertising, sales or pricing practices.
2.16 TAX MATTERS
(a) For purposes of this Agreement, the term "Taxes"
shall mean all taxes, including withholding taxes and social
security contributions, assessments, charges, duties, fees,
levies, mandatory employee profit sharing or other governmental
charges (including interest, penalties or surcharges associated
therewith), including national, state, province, city, county
or other income, franchise, capital stock, real property,
personal property, tangible, withholding, unemployment
compensation, disability, transfer, sales, soft drink, use,
excise, gross receipts and all other taxes of any kind for
which a person may have any liability imposed by any federal,
state, province, county, city, country or government or
subdivision or agency thereof, whether disputed or not.
(b) Except as set forth in Schedule 2.16:
(i) all returns with respect to Taxes, including estimated
returns and reports of every kind, which are due to have
been filed by Andina or any Andina Subsidiary in
accordance with any applicable law, have been duly
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filed, except where failure to file does not and will not
individually or in the aggregate have a Material Adverse
Effect on the Andina Parties; (ii) all Taxes for which Andina
or any Andina Subsidiary may have any liability through the date
hereof, have been paid in full or are to the extent required by
Chilean GAAP accrued as liabilities for Taxes on the books and
records of Andina and the Andina Subsidiaries, except where the
failure to do so would not have a Material Adverse Effect on the
Andina Parties; (iii) the amounts so paid on or before the date
hereof, together with any amounts accrued as liabilities for Taxes
(whether accrued as currently payable or deferred Taxes) on the
books of Andina and reflected in the Andina Financial
Statements will be adequate to satisfy all material liabilities
for Taxes of Andina and the Andina Subsidiaries in any
jurisdiction through March 31, 1996, including Taxes accruable
upon income earned through March 31, 1996; (iv) there are not
now any extensions of time in effect with respect to the dates
on which any returns or reports of Taxes on the part of Andina
or any Andina Subsidiary were or are due to be filed, except
where such extensions would not have a Material Adverse Effect
on the Andina Parties; (v) all deficiencies asserted as a
result of any examination of any return or report of Taxes on
the part of Andina or any Andina Subsidiary have been paid in
full, accrued on the books of Andina and the Andina
Subsidiaries, or finally settled, and no issue has been raised
in any such examination which, by application of the same or
similar principles, reasonably could be expected to result in a
proposed deficiency for any other period not so examined;
(vi) no claims have been asserted and, to the knowledge of
Andina or the Majority Shareholders, no proposals or
deficiencies for any Taxes on the part of Andina or any Andina
Subsidiary are being asserted, proposed or threatened, and no
audit or investigation of any return or report of Taxes on the
part of Andina or any Andina Subsidiary is currently underway,
pending or, to the knowledge of Andina or the Majority
Shareholders, threatened, except such as will not individually
or in the aggregate have a Material Adverse Effect on the
Andina Parties; (vii) to the knowledge of Andina or the
Majority Shareholders, all returns or reports of Taxes on the
part of Andina or any Andina Subsidiary due to have been
examined by all relevant tax authorities have either been
examined by all relevant tax authorities or the taxable years
therefor have been closed by operation of law; and (viii) there
are no equivalents under local law of U.S. style outstanding
waivers or agreements by Andina or any Andina Subsidiary for
the extension of time for the assessment of any Taxes on the
part of Andina or any Andina Subsidiary or deficiency thereof,
nor any equivalents thereof under applicable local law, nor are
there any requests for rulings, outstanding subpoenas or
requests for information, notices of proposed reassessment of
any property owned or leased by Andina or any Andina Subsidiary
or any other matter outside the ordinary course of business
pending between Andina or any Andina Subsidiary and any taxing
authority, except such as would not have a Material Adverse
Effect on the Andina Parties.
(c) In each case, adequate provision, including
provision in the deferred tax account, has been made in the
Audited Andina Financial Statements for all material deferred
and accrued liabilities for Taxes as of their respective dates
with respect to operations for periods ending on such dates.
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2.17 STATUS AS A FOREIGN ISSUER; NO SIGNIFICANT U.S.
PRESENCE.
(a) Neither Andina nor its ultimate parent entity
(i) is incorporated in the United States, (ii) is organized
under the laws of the United States or (iii) has its principal
offices located in the United States.
(b) Neither Andina nor any entity controlled by
Andina (i) holds assets (other than investment assets) located
in the United States having an aggregate book value or market
value of U.S.$15,000,000 or more or (ii) had sales in or into
the United States of U.S. $25,000,000 or more during the fiscal
year ended December 31, 1995.
2.18 OTHER REGISTRATION RIGHTS. Andina has not granted,
and has not agreed to grant, any demand or incidental
registration rights to any person.
2.19 TAKEOVER STATUTES. No "fair price," "moratorium,"
"control share acquisition," "business combination,"
"shareholder protection" or similar antitakeover statute or
regulation will apply to this Agreement or the transactions
contemplated hereby.
2.20 VOTE REQUIRED; BOARD RECOMMENDATION. The only vote
of the shareholders of Andina required to approve the
transactions contemplated by this Agreement or to approve the
Amendments (as defined in Section 4.3) is the affirmative vote
of two-thirds of the outstanding shares of Common Stock of
Andina. The Board of Directors of Andina has unanimously
determined that this Agreement and the transactions
contemplated hereby (including the Amendments) are advisable
and in the best interests of the shareholders of Andina, and
the Board of Directors of Andina has unanimously approved this
Agreement and the transactions contemplated hereby (including
the Amendments).
2.21 NO THIRD-PARTY INVASION OF TERRITORY CLAIMS. Except
as set forth in Schedule 2.21, to the knowledge of Andina or
the Majority Shareholders, since December 31, 1995, neither
Andina nor any Andina Subsidiary has received notice of any
claim against it by another bottler for wrongful shipment of
soft drinks into such bottler's territory, nor has Andina or
any Andina Subsidiary wrongfully shipped any soft drink
products into any third party's bottling territory, and neither
Andina nor any Andina Subsidiary has any such claim against any
other bottler.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF CITICORP AND SPC
Citicorp and SPC hereby jointly and severally represent
and warrant to Andina and the Majority Shareholders as follows:
3.1 POWER AND AUTHORITY; ENFORCEABILITY. Each of Citicorp
and SPC has all requisite power and authority to execute and
deliver this Agreement and to perform its obligations
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hereunder and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by
Citicorp and SPC, and the consummation by each of them of the
transactions contemplated hereby have been duly authorized by
all required corporate action. This Agreement has been duly
executed and delivered by each of Citicorp and SPC and constitutes
the legal, valid and binding obligation of Citicorp and SPC
enforceable against each of them in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and
other laws affecting the rights of creditors generally.
3.2 ORGANIZATION. Citicorp is a banking corporation duly
organized, validly existing and in good standing under the laws
of Delaware, U.S.A. SPC is a Cayman Islands corporation duly
organized and validly existing under the laws of the Cayman
Islands. SPC was formed on June 3, 1996. SPC has no assets
and, except for the execution and delivery of this Agreement,
SPC has not engaged in any activity, conducted any business,
entered into any agreement or otherwise incurred any
liabilities or obligations.
3.3 NO CONFLICT. The execution, delivery and performance
by Citicorp and SPC of this Agreement, the consummation by
Citicorp and SPC of the transactions contemplated hereby, and
the fulfillment of and compliance with the terms and conditions
hereof do not and will not (i) violate or conflict with any of
the provisions of the charter or bylaws of Citicorp or SPC,
(ii) violate, conflict with or result in a breach or default
under or cause the termination, modification or acceleration of
any term or condition of any mortgage, indenture, contract,
license, permit, instrument or other agreement, document or
instrument to which Citicorp or SPC is a party or by which
Citicorp or SPC or any of their respective properties may be
bound, (iii) violate any provision of applicable laws or
regulations by which Citicorp or SPC or any of their respective
properties may be bound, or any order, judgment, decree or
ruling of any governmental or arbitral authority or court of
law applicable to Citicorp or SPC or their respective assets,
(iv) result in the creation or imposition of any lien, claim,
charge, restriction, security interest or encumbrance of any
kind upon any asset of Citicorp or SPC or (v) require the
approval, authorization or act of, or the making by Citicorp or
SPC of any declaration, filing or registration with, any
federal, state or local authority.
ARTICLE 4
CERTAIN COVENANTS AND AGREEMENTS
4.1 CONDUCT OF BUSINESS BY ANDINA. From the date hereof
to the Closing, Andina and the Majority Shareholders will, and
will cause Atlantico and each other Andina Subsidiary to,
except as otherwise contemplated by this Agreement and the
transactions contemplated hereby and except as otherwise
consented to by Citicorp and SPC:
(a) Carry on its business in the ordinary course
consistent with past practice;
(b) Except for the adoption of the Amendments,
neither change nor amend its Estatutos Sociales or similar
charter documents;
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(c) Other than pursuant to the exercise of employee
stock options outstanding on the date hereof and pursuant to
Andina Employee Benefit Plans, not issue, sell or grant
options, warrants or rights to purchase or subscribe to, or
enter into any arrangement or contract with respect to the
issuance or sale of any of the capital stock of Andina or any
Andina Subsidiary or rights or obligations convertible into or
exchangeable for any shares of the capital stock of Andina or
any Andina Subsidiary and not alter the terms of any presently
outstanding options or make any changes (by split-up,
combination, reorganization or otherwise) in the capital
structure of Andina or any Andina Subsidiary;
(d) Other than pursuant to the exercise of employee
stock options outstanding on the date hereof, not declare, pay
or set aside for payment any dividend or other distribution in
respect of the capital stock or other equity securities of
Andina or any Andina Subsidiary and not redeem, purchase or
otherwise acquire any shares of the capital stock or other
securities of Andina or any Andina Subsidiary, or rights or
obligations convertible into or exchangeable for any shares of
the capital stock or other securities of Andina or any Andina
Subsidiary or obligations convertible into such, or any
options, warrants or other rights to purchase or subscribe to
any of the foregoing;
(e) Not merge or consolidate with any other person
or acquire or enter into an agreement to acquire stock or
assets of any business or entity in an amount in excess of
U.S. $1,000,000;
(f) Not enter into a transaction involving the sale
of all or substantially all of the assets of Andina;
(g) Not enter into a transaction involving any
reorganization, merger, consolidation, share exchange, business
combination or similar transaction involving Andina;
(h) Not enter into a transaction involving a change
in the ownership of the outstanding voting power or equity
interests of Andina as a result of which the Majority
Shareholders own less than 50.1% of the outstanding voting
power of Andina or less than 50.1% of the outstanding equity
interests of Andina; and
(i) Not enter into any binding agreement to do any
of the foregoing.
4.2 INSPECTION AND ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Between the date of this Agreement and the
Closing, each party hereto (other than Citicorp) will provide
each other party and its accountants, counsel and other
authorized representatives access, during reasonable business
hours and under reasonable circumstances to any and all
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of its premises, properties, contracts, commitments, books,
records and other information (including tax returns filed and
those in preparation) and will cause its respective officers to
furnish to the other party and its authorized representatives any
and all financial, technical and operating data and other
information pertaining to its business, as each other party
shall from time to time reasonably request.
(b) The parties hereto shall, and shall cause their
authorized representatives to, hold in strict confidence, and
not disclose to any person, or use in any manner except in
connection with the transactions contemplated under this
Agreement, all information obtained from any other party hereto
in connection with the transactions contemplated hereby, except
that such information may be disclosed (i) where necessary as
required by law to any regulatory authorities or governmental
agencies, (ii) if required by court order or decree or
applicable law, (iii) if it is ascertainable or obtained from
public or published information, (iv) if it is received from a
third party not known to the recipient to be under an
obligation to keep such information confidential, (v) if it is
or becomes known to the public other than through disclosure by
the recipient or (vi) if the recipient can demonstrate that it
was in its possession prior to disclosure thereof in connection
with this Agreement.
4.3 INFORMATION STATEMENT. As promptly as practicable
after the date hereof, Andina shall prepare and, after
consultation with Citicorp and SPC, shall mail a notice of a
proposed shareholders' meeting (the "Special Meeting") and
accompanying companion information statement (the "Information
Statement") to all shareholders of Andina entitled to vote at
the Special Meeting and to the SVS. The notice shall request
the shareholders of Andina to approve amendments to the
Estatutos Sociales of Andina in substantially the form set
forth in Exhibit 4.3 (the "Amendments") to permit (a) an
increase in the share capital of Andina to permit the issuance
by Andina of the Acquired Andina Shares and the shares to be
issued in the Preemptive Rights Offering, (b) following the
issuance of the Acquired Andina Shares pursuant to this
Agreement, the reclassification (the "Reclassification") of the
existing Common Stock such that each share of Common Stock will
become one share of Class A Stock (the "Class A Stock") and one
share of Class B Stock (the "Class B Stock") of Andina, each
having the respective rights and privileges set forth in
Exhibit 4.3, and (c) an increase in the number of members of
Andina's board of directors to seven incumbent members and
seven alternate members.
4.4 NEW YORK STOCK EXCHANGE MATTERS.
(a) Andina shall use its reasonable and good faith
efforts to obtain confirmation from the New York Stock Exchange
that the American Depository Shares representing the Class A
Stock and the Class B Stock will be listed on the New York
Stock Exchange after (i) the issuance and sale of the Acquired
Andina Shares and the shares to be issued in the Preemptive
Rights Offering and the Reclassification and (ii) the
effectiveness of the provisions of this Agreement and the
Amendments.
(b) Andina shall use its reasonable and good faith
efforts to insure that the Class B Stock issuable upon
conversion of the Class A Stock shall be duly authorized and
reserved for issuance by Andina and shall take all necessary
action to receive confirmation from the New York Stock Exchange
that American Depository Shares representing such shares
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of Class B Stock have been listed on the New York Stock Exchange,
subject to official notice of issuance.
4.5 SHAREHOLDER MATTERS. Andina shall cause the Special
Meeting to be convened and held promptly after the date hereof
for the purpose of voting upon the approval of the Amendments.
Andina's Board of Directors shall recommend to its shareholders
approval of the Amendments at the Special Meeting, and the
Majority Shareholders shall vote all of their shares of Common
Stock in favor of approval of the Amendments.
4.6 PREEMPTIVE RIGHTS OFFERING; RECLASSIFICATION.
(a) Promptly after the Special Meeting, Andina shall
take all necessary actions to make a preemptive rights offering
of shares of Common Stock to the existing shareholders of
Andina pursuant to the requirements of the Chilean Companies
Act (the "Preemptive Rights Offering") and to register the
shares of Common Stock to be offered in the Preemptive Rights
Offering with the SVS. Prior to the commencement of the period
in which Andina shareholders have the right to elect to
purchase shares of Andina Common Stock in the Preemptive Rights
Offering, the Board of Directors of Andina in its good faith
judgment shall fix the per share price to be paid for Andina
Common Stock in the Preemptive Rights Offering taking into
account all relevant factors, including the trading price of
the Andina Common Stock.
(b) Promptly after the Special Meeting and the
Preemptive Rights Offering, Andina shall take all necessary
actions to effect the Reclassification.
4.7 FURTHER ASSURANCES. Subject to the other provisions
of this Agreement, the parties hereto shall each use their
reasonable, good faith efforts to perform their obligations
herein and to take, or cause to be taken, or do, or cause to be
done, all things necessary, proper or advisable under
applicable law to obtain all approvals and satisfy all
conditions to the obligations of the parties under this
Agreement and to cause the Closing to be effected on or prior
to December 2, 1996 in accordance with the terms hereof and
shall cooperate fully with each other and their respective
officers, directors, employees, agents, counsel, accountants
and other designees in connection with any steps required to be
taken as part of their respective obligations under this
Agreement.
4.8 PUBLIC ANNOUNCEMENTS. Without the prior written
consent of the other parties hereto, each party agrees that it
will not make any public announcement concerning the
transactions contemplated by this Agreement, provided that any
party may make such public announcement if it is advised by
counsel that such public announcement is required by law or the
rules of any U.S. or Chilean national securities exchange or is
otherwise legally advisable in light of the prior disclosure
practice of such party. Each party hereto will discuss any
public announcements concerning the transactions contemplated
by this Agreement with the other parties hereto prior to making
such announcements.
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4.9 ASSIGNMENT OF PREEMPTIVE RIGHTS. In order to
facilitate the issuance to, and the purchase by, SPC of the
Acquired Andina Shares, the Majority Shareholders hereby
irrevocably commit that, at the beginning of the option period
for the Preemptive Rights Offering, they will deliver to
Citicorp and SPC a written assignment of all of their rights
with respect to the exercise of preemptive rights under Chilean
corporate law or otherwise necessary to permit SPC to subscribe
to the Acquired Andina Shares.
4.10 SPC COVENANTS. Citicorp and SPC agree that, prior to
the Closing, except as otherwise specifically contemplated by
this Agreement and except for filings required under the laws
of the Cayman Islands, SPC will not engage in any activity,
conduct any business, enter into any agreement or otherwise
incur any liabilities or obligations.
ARTICLE 5
CONDITIONS
5.1 CONDITION TO EACH PARTY'S OBLIGATIONS. The
respective obligations of each party to effect the Closing
shall be subject to the fulfillment at or prior to the Closing
of the condition that all consents, authorizations, orders and
approvals of (or filings or registrations with) any
governmental commission, board or other regulatory body
required in connection with the transactions contemplated to be
consummated at the Closing shall have been obtained or made,
except for filing of any documents required to be filed after
the Closing Date.
5.2 CONDITIONS TO OBLIGATIONS OF CITICORP AND SPC. The
obligations of Citicorp and SPC to effect the Closing shall be
subject to the satisfaction on or prior to the Closing of all
of the following conditions, except such conditions as Citicorp
and SPC may waive in writing:
(a) No preliminary or permanent injunction or other
order, judgment, writ or decree by any court or other
governmental authority or agency shall have been issued and
shall remain in effect, and there shall not be any statute,
rule, regulation or order enacted, promulgated or issued after
the date of this Agreement by any governmental authority or
agency which in any case would (i) prohibit or restrain
Citicorp, SPC or the Andina Parties from consummating, or make
illegal, the transactions contemplated under this Agreement to
be consummated at the Closing or impair SPC's ownership of the
Acquired Andina Shares or compel SPC to dispose of all or a
material portion of the Acquired Andina Shares, or (ii) render
Citicorp or SPC unable to consummate the transactions
contemplated hereby to be consummated at the Closing. No suit,
investigation, action, lawsuit or other proceeding shall have
been commenced or threatened for the purpose of obtaining any
such order, writ, injunction, decree or judgment which would
have any of the effects set forth in subparts (i) or (ii)
above.
(b) The Amendments shall have been approved by the
shareholders of Andina in accordance with the requirements of
applicable Chilean laws and regulations.
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(c) The Estatutos Sociales of Andina shall have been
amended to reflect the Amendments and duly filed with the SVS
in accordance with the requirements of applicable Chilean laws
and regulations.
(d) The Class A Stock and the Class B Stock shall
have been duly registered by Andina with the SVS in accordance
with the requirements of applicable Chilean laws and
regulations but shall not have been issued until after the
issuance of the Acquired Andina Shares.
(e) Andina shall have taken all necessary action to
ensure that the Class B Stock issuable upon conversion of the
Class A Stock shall have been duly authorized and reserved for
issuance by Andina.
(f) The president or chief executive officer of each
of the Andina Parties shall deliver to Citicorp and SPC a
written certificate to the effect that the representations and
warranties set forth in Sections 2.1, 2.2(a), 2.2(b), 2.2(c),
2.3, 2.6 and 2.17 are true and correct in all material respects
at and as of the Closing Date, as if made on such date and to
the further effect that:
(i) the shareholders of Andina have duly
approved the Amendments by the necessary vote, and
that immediately after the issuance of the Acquired
Andina Shares the Amendments will be duly adopted and
will be in full force and effect; and
(ii) the Majority Shareholders have validly
assigned to SPC all preemptive rights necessary to
permit SPC to subscribe to the Acquired Andina
Shares.
(g) A foreign investment agreement between SPC and
the Republic of Chile has been executed, enabling SPC to
register the funds necessary to pay the Aggregate Subscription
Price as a foreign investment capital contribution under Decree
Law No. 600 (Foreign Investment Statute).
5.3 CONDITIONS TO OBLIGATIONS OF ANDINA PARTIES. The
obligations of the Andina Parties to effect the Closing shall
be subject to the satisfaction on or prior to the Closing Date
of the following conditions, unless the Andina Parties have
waived such conditions in writing:
(a) No preliminary or permanent injunction or other
order, judgment, writ or decree by any court or other
governmental authority or agency shall have been issued and
shall remain in effect, and there shall not be any statute,
rule, regulation or order enacted, promulgated or issued after
the date of this Agreement by any governmental authority or
agency, which in any case would (i) prohibit or restrain any
Andina Party from consummating, or make illegal, the
transactions contemplated under this Agreement to be
consummated at the Closing, or (ii) render any Andina Party
unable to consummate the transactions contemplated
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hereby to be consummated at the Closing. No suit, investigation,
action, lawsuit or other proceeding shall have been commenced or
threatened for the purpose of obtaining any such order, writ,
injunction, decree or judgment, which would have any of the
effects set forth in subpart (i) through (ii) above.
(b) A senior officer of Citicorp and SPC shall
deliver to the Andina Parties a written certificate to the
effect that the representations and warranties set forth in
Article 3 are true and correct in all material respects at and
as of the Closing Date, as if made on such date.
5.4 NO OTHER CONDITIONS; EFFECT OF CERTAIN BREACHES.
None of the obligations of any party to this Agreement shall be
subject to any conditions other than those conditions set forth
in this Article 5. Except as set forth in Sections 5.2, 5.3
and 8.1, no breach of the representations, warranties,
covenants or agreements contained in this Agreement shall
affect the obligations of the parties hereto to consummate the
transactions contemplated by this Agreement; provided, however,
that this sentence shall not affect any other rights,
liabilities, duties or obligations of any of the parties hereto
arising under this Agreement as a result of such breach.
ARTICLE 6
ACTIONS REQUIRED AT CLOSING
Unless this Agreement is first terminated as provided in
Article 8, and subject to the satisfaction or waiver of the
conditions set forth herein, the closing of the purchase and
sale of the Acquired Andina Shares (the "Closing") shall take
place at the offices of Andina, Avenida Andres Bello No. 2687,
Piso 20, Santiago, Chile, at 10:00 a.m., local time, on
December 2, 1996, or such other time, date and/or place as the
parties hereto may agree (the "Closing Date") at which the
following actions, including without limitation, shall take
place:
6.1 SHARE CERTIFICATES OF ANDINA. Andina shall deliver
to SPC stock certificates in definitive form representing the
Acquired Andina Shares, registered in the name of SPC.
6.2 AGGREGATE SUBSCRIPTION PRICE. SPC shall tender the
Aggregate Subscription Price to Andina in Chilean Pesos in
immediately available funds to an account reasonably designated
by Andina, which account shall be designated at least five days
prior to the Closing.
6.3 FURTHER ASSURANCES. Following the Closing, Andina
shall take such actions which were required by this Agreement
to be taken at or prior to the Closing but which were not
taken, as may be requested by Citicorp or SPC to confirm and
vest in SPC title to the Acquired Andina Shares.
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<PAGE>
<PAGE>
ARTICLE 7
INDEMNIFICATION
7.1 SURVIVAL. The representations and warranties of the
parties hereto contained herein or in any certificate or other
document delivered pursuant hereto shall not survive the
Closing Date, except that the representations and warranties
contained in Sections 2.1, 2.2(a), 2.2(b), 2.2(c), 2.3, 2.6 and
2.17, in Article 3 and in the certificates delivered pursuant
to Section 5.2(f) and 5.3(b) shall survive the Closing Date
without limitation as to time. The covenants, agreements and
obligations contained in this Agreement shall not survive the
Closing Date, except that (x) the covenants and agreements set
forth in Article 1, Sections 4.2(b), 4.8 and 6.3, this
Article 7 and Article 9 shall survive the Closing Date without
limitation as to time, and (y) the covenants and agreements set
forth in Section 4.6 shall survive the Closing Date until one
month after the completion of the Preemptive Rights Offering
and the Reclassification. Any claim for indemnification under
this Article 7 must be made in writing within the applicable
survival period. Each of the parties hereto acknowledges that
(a) it is a sophisticated institution capable of evaluating the
risks inherent in the transactions contemplated hereby, and (b)
it and its counsel have been afforded an adequate opportunity
to conduct, and have in fact conducted, a due diligence
investigation with respect to each of the transactions
contemplated hereby to the extent they consider it appropriate.
7.2 INDEMNIFICATION BY ANDINA PARTIES
(a) Except as otherwise limited by this Article 7
and subject to the limitations on survival set forth in Section
7.1, the Andina Parties, jointly and severally (except as
otherwise provided in this Agreement), shall indemnify and hold
harmless Citicorp and SPC, their respective officers,
directors, shareholders, employees, agents and representatives
and their successors and permitted assigns (each, an
"Indemnified SPC Party") against and in respect of:
(i) if this Agreement is terminated prior to
the Closing, any and all claims, losses, liabilities,
damages and reasonable costs and expenses directly or
indirectly suffered or incurred or disbursed by any
Indemnified SPC Party as a result of, or with respect
to, any breach of or noncompliance by any Andina
Party with any representation, warranty, covenant or
agreement of any Andina Party contained in this
Agreement;
(ii) if the Closing occurs, any and all claims,
losses, liabilities, damages and reasonable costs and
expenses directly or indirectly suffered or incurred
or disbursed by any Indemnified SPC Party as a result
of, or with respect to, any breach of or
noncompliance by any Andina Party with any
representation, warranty, covenant or agreement of
any Andina Party contained in this Agreement which,
pursuant to Section 7.1 hereof, is stated to survive
the Closing Date; and
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<PAGE>
(iii) any and all actions, suits, claims,
proceedings, investigations, audits, penalties,
fines, judgments, reasonable costs (including court
costs) and other expenses (including, without
limitation, reasonable legal and accounting fees and
expenses) incident to any of the foregoing.
(b) Any amounts owed to any Indemnified SPC Party as
a result of a breach of a representation, warranty, covenant or
agreement set forth in Article 1 or Section 2.1, 2.2(a),
2.2(b), 2.2(c), 2.3, 2.6, 2.17 or 6.3 or in the certificates
delivered pursuant to Section 5.2(f) (other than amounts owed
to any Indemnified SPC Party if this Agreement is terminated
prior to the Closing) shall be satisfied by the transfer by the
Majority Shareholders to such Indemnified SPC Party of shares
of Common Stock (or, after the Reclassification, equal numbers
of shares of Class A Stock and Class B Stock) equal in value to
the amount of any indemnification payment which is owed by such
Indemnified SPC Party.
(c) Any amounts owed to any Indemnified SPC Party as
a result of a breach of a representation, warranty, covenant or
agreement if this Agreement is terminated prior to the Closing
or as a result of a breach of a covenant or agreement set forth
in Section 4.2(b), 4.6 or 4.8 or Article 9 shall not be
required to be satisfied in stock, but shall instead be
satisfied by the direct assertion against the Andina Parties of
such indemnified claims to be satisfied out of the assets or
cash of the Andina Parties.
7.3 INDEMNIFICATION BY CITICORP AND SPC. Except as
otherwise limited by this Article 7, Citicorp and SPC shall
indemnify and hold harmless the Andina Parties, their
respective officers, directors, shareholders, employees, agents
and representatives and their successors and permitted assigns
(each, an "Indemnified Andina Party") against and in respect
of:
(a) any and all claims, losses, liabilities,
damages, reasonable costs and expenses directly or indirectly
suffered or incurred or disbursed by any Indemnified Andina
Party as a result of, or with respect to, any breach or of
noncompliance by either Citicorp or SPC with any
representation, warranty, covenant or agreement of Citicorp or
SPC contained in this Agreement; and
(b) any and all actions, suits, claims, proceedings,
investigations, audits, penalties, fines, judgments, reasonable
costs (including court costs) and other expenses (including,
without limitation, reasonable legal and accounting fees and
expenses) incident to any of the foregoing.
7.4 NOTICE OF CLAIM. If any Indemnified SPC Party or any
Indemnified Andina Party (as the case may be, an "Indemnified
Party") believes that it has suffered or incurred or disbursed
any claims, losses, liabilities, damages, and reasonable costs
and expenses for which it is entitled to such indemnification
(hereinafter, collectively, a "Loss" or "Losses"), such
Indemnified Party shall promptly notify the party or parties
from whom indemnification is being claimed (the "Indemnifying
Parties") and shall provide them with sufficient information
as is then available. If any legal action or Tax Claim
(as hereinafter defined) is instituted by or
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<PAGE>
<PAGE>
against a third party with respect to which any Indemnified
Party intends to claim any Losses, such Indemnified Party shall
promptly notify the Indemnifying Parties of such action. The
failure of an Indemnified Party to give any notice required by
this Section 7.4 shall not affect any of such party's rights under
this Article 7 except to the extent such failure is actually
prejudicial to the rights or obligations of the Indemnifying
Parties. The Indemnified Party shall promptly deliver to the
Indemnifying Parties copies of all notices and documents
(including court papers) received by the Indemnified Party
relating thereto. As used in this Agreement, the term "Tax
Claim" means a written assertion by the U.S. Internal Revenue
Service or other taxing authority of a proposed adjustment to
be made with respect to taxes for which an indemnification
obligation would arise hereunder.
7.5 THIRD PARTY CLAIMS. If a claim made pursuant to this
Article 7 arises out of the claim of any third party (including
any Tax Claims), or if there is any claim against a third party
available by virtue of the circumstances relating thereto, the
Indemnifying Parties shall have sixty (60) days after receipt
of the notice referred to in Section 7.4 to notify the
Indemnified Party that they elect to conduct and control such
action. If the Indemnifying Party does not give the foregoing
notice, the Indemnified Party shall have the right to defend,
contest, settle or compromise such action in the exercise of
its reasonable discretion, and the Indemnifying Parties shall,
upon request from the Indemnified Party, promptly pay to such
Indemnified Party, in accordance with the other terms of this
Article 7, the amount of any Losses for which indemnification
is provided hereunder provided, however, that, the Indemnifying
Party will not be subject to any liability for any settlement
made without its written consent, which consent will not be
unreasonably withheld . If the Indemnifying Parties give the
foregoing notice, the Indemnifying Parties shall have the right
to undertake, conduct and control, through counsel of their own
choosing and at their sole expense, the conduct and settlement
of such action and the Indemnified Parties shall cooperate with
the Indemnifying Parties in connection therewith; provided that
(a) the Indemnifying Parties shall not, without the written
consent of the Indemnified Party, enter into any settlement the
effect of which is to create or impose any lien upon any of the
properties or assets of such Indemnified Party; (b) the
Indemnifying Parties shall not consent to any settlement that
does not include as an unconditional term thereof the giving of
a complete release from liability with respect to such action
to the Indemnified Party; (c) the Indemnifying Parties shall
not enter into any settlement the effect of which is to permit
any injunction, declaratory judgment or other nonmonetary
relief to be entered against any Indemnified Party; (d) the
Indemnifying Parties shall permit the Indemnified Party to
participate in such conduct or settlement through counsel
chosen by the Indemnified Party, with the fees and expenses of
such counsel borne by the Indemnified Party unless under then
applicable standards of professional conduct a conflict of
interest would exist, or be reasonably foreseeable to arise,
between the Indemnifying Parties and the Indemnified Party in
which event such fees and expenses of such counsel shall be
borne by the Indemnifying Parties, but under no circumstances
shall the Indemnifying Parties be required to pay the expenses
of more than one such separate counsel in connection with such
claim; and (e) the Indemnifying Parties shall agree promptly to
reimburse the Indemnified Party for the full amount of any
Losses resulting from such action (except for expenses borne by
the Indemnified Party pursuant to clause (d) hereof) incurred
by the Indemnified Party, including reasonable fees and
expenses of counsel for the Indemnified Party.
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<PAGE>
ARTICLE 8
TERMINATION
8.1 TERMINATION AND ABANDONMENT. This Agreement may be
terminated at any time prior to the Closing Date, whether
before or after the Special Meeting and the Preemptive Rights
Offering:
(a) by mutual agreement of Andina, Citicorp and SPC;
(b) by Andina, if the conditions set forth in
Sections 5.1 and 5.3 hereof shall not have been complied with
or performed and such noncompliance or nonperformance shall not
have been cured or eliminated (or by its nature cannot be cured
or eliminated) on or before April 30, 1997; and
(c) by Citicorp and SPC, if the conditions set forth
in Sections 5.1 and 5.2 hereof shall not have been complied
with or performed and such noncompliance or nonperformance
shall not have been cured or eliminated (or by its nature
cannot be cured or eliminated) on or before April 30, 1997.
8.2 EFFECT OF TERMINATION. In the event of termination
of this Agreement pursuant to this Article 8, this Agreement
shall forthwith become void and there shall be no liability on
the part of any party or its respective officers, directors or
shareholders, except for obligations under Sections 4.2(b) and
4.8, Article 7, this Section 8.2 and Sections 9.11 and 9.17,
all of which shall survive the termination; provided, however,
that termination pursuant to this Article 8 prior to the
Closing shall not relieve a defaulting or breaching party from
any liability to the other party or parties hereto due to a
breach of any representation, warranty, covenant or agreement
contained in this Agreement (whether or not such
representation, warranty, covenant or agreement would have
survived the Closing Date).
ARTICLE 9
MISCELLANEOUS
9.1 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the
other Operative contains the entire agreement among the parties
hereto with respect to the transactions contemplated herein,
and supersedes all prior agreements and negotiations and oral
understandings relating to the subject matter hereof; provided
that this provision is not intended to abrogate any other
written agreement between the parties executed
contemporaneously with or after this Agreement. No amendment,
modification or alteration of the terms or provisions of this
Agreement shall be binding unless the same shall be in writing
and duly executed by the parties hereto.
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<PAGE>
9.2 SUCCESSORS AND ASSIGNS. This Agreement and the
rights of a party hereunder may not be assigned, and the
obligations of a party hereunder may not be delegated, in whole
or in part, without the prior written consent of all other
parties hereto. This Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective
successors and permitted assigns.
9.3 SCHEDULES AND EXHIBITS. This Agreement includes all
Schedules and Exhibits referred to herein and attached hereto.
9.4 COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall for all purposes be
deemed to be an original and all of which shall constitute one
and the same instrument.
9.5 HEADINGS. The headings of the sections and
paragraphs of this Agreement are inserted for convenience only
and shall not be deemed to constitute part of this Agreement or
to affect the interpretation hereof.
9.6 MODIFICATION AND WAIVER. Any rights arising under
this Agreement may be waived in writing at any time by the
party holding the same. No waiver of any right shall be deemed
to or shall constitute a waiver of any other rights hereunder
(whether or not similar).
9.7 NOTICES. Any notice, request, instruction or other
document to be given hereunder by any party hereto to any other
party hereto shall be in writing and delivered personally or by
telecopy transmission or sent by registered or certified mail
or by any express mail service, postage and fees prepaid:
if to Andina: Embotelladora Andina S.A.
Avenida Andres Bello No. 2687 Piso 20
Casilla 7187
Santiago, Chile
Attention: Chief Executive Officer
Telefax No.: 562/338/0510
with a copy to: Embotelladora Andina S.A.
Avenida Andres Bello No. 2687 Piso 20
Casilla 7187
Santiago, Chile
Attention: General Counsel
Telefax No.: 562/338/0570
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<PAGE>
if to the Majority Inversiones Freire Ltda.
Shareholders: Inversiones Freire Dos Ltda.
c/o Portaluppi, Guzman y Bezanilla
Huerfanos 863 Piso 9
Santiago, Chile
Attention: Eugenio Guzman
Telefax No.: 562/638/3934
if to Citicorp: Citicorp Banking Corporation
Avenida Andres Bello No. 2687 Piso 7
Casilla 7187
Santiago, Chile
Attention: General Legal Counsel
Telefax No.: 562/338/8138
if to SPC: Bottling Investment Limited
Avenida Andres Bello No. 2687 Piso 7
Casilla 7187
Santiago, Chile
Attention: General Legal Counsel
Telefax No.: 562/338/8138
or at such other address or number for a party as shall be
specified by like notice. Any notice which is delivered
personally or by telecopy transmission or by mail in the manner
provided herein shall be deemed to have been duly given to the
party to whom it is directed upon actual receipt by such party.
9.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
9.9 CONSTRUCTION. No provision of this Agreement shall
be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental authority by
reason of such party's having or being deemed to have
structured or drafted such provision.
9.10 SPECIFIC PERFORMANCE. The parties agree that
irreparable damage would occur if any of the provisions of this
Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to equitable relief,
including in the form of injunctions, in order to enforce
specifically the provisions of this Agreement, in addition to
any other remedy to which they are entitled at law or in
equity.
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<PAGE>
<PAGE>
9.11 CONSENT TO JURISDICTION, ETC.
(a) Each of the parties hereby irrevocably consents
and agrees that any action, suit or proceeding arising in
connection with any disagreement, dispute, controversy or claim
arising out of or relating to this Agreement (for purposes of
this Section, a "Legal Dispute") may be brought to the non-
exclusive jurisdiction of the United States District Court for
the Southern District of New York, New York, United States of
America or, in the event (but only in the event) such court
does not have subject matter jurisdiction over such action,
suit or proceeding, in the courts of the State of New York
sitting in the City of New York, New York, United States of
America.
(b) Each of the parties hereby waives, and agrees
not to assert, as a defense in any action, suit or proceeding
referred to in Section 9.11(a), that it is not subject thereto
or that such action, suit or proceeding may not be brought or
is not maintainable in such court or that its property is
exempt or immune from execution, that the action, suit or
proceeding is brought in an inconvenient forum or that the
venue of the action, suit or proceeding is improper. Each of
the Andina Parties hereby irrevocably appoints CT Corporation
System (the "Agent for Service") as its agent to receive on its
behalf service of copies of the summons and complaint and any
other process which may be served in any such action, suit or
proceeding. Such service may be made by mailing or delivering
a copy of such process to such Andina Party in care of the
Agent for Service at the address of the Agent for Service in
the State of New York, United States of America, and each
Andina Party hereby irrevocably authorizes and directs the
Agent for Service to accept such service on its behalf.
(c) Each party hereto agrees that a final judgment
in any action, suit or proceeding described in this Section
9.11 after the expiration of any period permitted for appeal
and subject to any stay during appeal shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.
9.12 TRANSLATIONS This Agreement has been executed, and
all amendments, supplements, modifications or replacements
hereto shall be made, in the English language. This Agreement
may be translated into the Spanish language for convenience of
one or more of the parties hereto, provided that in case of
discrepancies the English version shall prevail in all cases.
9.13 NO THIRD-PARTY BENEFICIARIES. Except as otherwise
specifically provided herein, nothing in this Agreement is
intended to confer upon any person other than the parties
thereto any rights or remedies.
9.14 "INCLUDING". Words of inclusion shall not be
construed as terms of limitation herein, so that references to
"included" matters shall be regarded as non-exclusive, non-
characterizing illustrations.
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<PAGE>
9.15 REFERENCES. Whenever reference is made in this
Agreement to any Article, Section, Schedule or Exhibit, such
reference shall be deemed to apply to the specified Article or
Section of this Agreement or the specified Schedule or Exhibit
to this Agreement.
9.16 MATERIAL ADVERSE EFFECT. As used in this Agreement,
the term "Material Adverse Effect" means (a) when used with
reference to any of the Andina Parties, a material adverse
effect on (i) the financial condition or business of Andina and
the Andina Subsidiaries, taken as a whole or (ii) the ability
of Andina, the Majority Shareholders, Atlantico or any other
Andina Subsidiary to consummate the transactions contemplated
by this Agreement; and (b) when used with reference to Citicorp
or SPC, a material adverse effect on the ability of Citicorp
or SPC to consummate the transactions contemplated by this
Agreement.
9.17 EXPENSES. Except as otherwise agreed herein or in
any other agreement between the parties entered into on or
subsequent to the date hereof, each party hereto shall pay all
costs and expenses incurred by such party or its subsidiaries
or affiliates or on its or their behalf in connection with this
Agreement and the transactions contemplated hereby, including
any stock transfer taxes, recording fees or other similar
taxes, any brokerage fees, commissions or finder's fees, and
any fees and expenses of its or their own financial
consultants, accountants and counsel.
9.18 EXCHANGE RATE. To the extent that any amount
specified herein in a particular currency is paid in another
country in the currency of that country, the amount paid shall
be converted into the specified currency at the average of the
conversion rates for such currencies as announced by Citicorp,
N.A., New York, New York. For purposes hereof, the "conversion
rate" shall be the average of the buy and sell conversion rates
for commercial transactions at the end of the business day
prior to the business day on which such amount is paid.
9.19 SEVERABILITY. The invalidity or unenforceability of
any provision hereof in any jurisdiction will not affect the
validity or enforceability of the remainder hereof in that
jurisdiction or the validity or enforceability of this
Agreement, including that provision, in any other jurisdiction.
To the extent permitted by applicable law, each party waives
any provision of law that renders any provision hereof
prohibited or unenforceable in any respect. If any provision
of this Agreement is held to be unenforceable for any reason,
it shall be adjusted rather than voided, if possible, in order
to achieve the intent of the parties to the extent possible.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be signed by their duly authorized
representatives on the date first above written.
EMBOTELLADORA ANDINA S.A.
By: /s/ JOSE SAID S.
Name: Jose Said S.
Title: Chairman of the Board
By: /s/ JOSE ANTONIO GARCES
Name: Jose Antonio Garces
Title: Director
INVERSIONES FREIRE LTDA.
By: /s/ JOSE SAID S.
Name: Jose Said S.
Title: Attorney-in-fact
By: /s/ JOSE ANTONIO GARCES
Name: Jose Antonio Garces
Title: Attorney-in-fact
INVERSIONES FREIRE DOS LTDA.
By: /s/ JOSE SAID S.
Name: Jose Said S.
Title: Attorney-in-fact
By: /s/ JOSE ANTONIO GARCES
Name: Jose Antonio Garces
Title: Attorney-in-fact
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<PAGE>
CITICORP BANKING CORPORATION
By: /s/ DIEGO PERALTA V.
Name: Diego Peralta V.
Title: Authorized Officer
BOTTLING INVESTMENT LIMITED
By:/s/ DIEGO PERALTA V.
Name: Diego Peralta V.
Title: Chairman of the Board
- 30 -
EXHIBIT 99.3
STOCK PURCHASE AGREEMENT
by and among
EMBOTELLADORA ANDINA S.A.,
INVERSIONES DEL ATLANTICO S.A.,
INVERSIONES FREIRE LTDA.,
INVERSIONES FREIRE DOS LTDA.,
THE COCA-COLA COMPANY,
COCA-COLA INTERAMERICAN CORPORATION,
COCA-COLA DE ARGENTINA S.A.,
CITICORP BANKING CORPORATION
and
BOTTLING INVESTMENT LIMITED
Dated as of September 5, 1996
<PAGE>
<PAGE>
STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
ARTICLE 1 PURCHASE AND SALE OF SHARES 2
1.1 Purchase and Sale of CIPET Shares. 2
1.2 Purchase and Sale of INTI Shares and CIPET Debt 2
1.3 Purchase and Sale of CIPET Shares, INTI
Shares and CIPET Debt 2
1.4 Definitions 3
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF ANDINA,
ATLANTICO AND THE MAJORITY SHAREHOLDERS 3
2.1 Power and Authority; Enforceability 4
2.2 Organization 4
2.3 No Conflict 4
2.4 Investment Intent 5
2.5 Incorporation of Representation and Warranties 5
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF KO AND
INTERAMERICAN 5
3.1 Power and Authority 6
3.2 Organization 6
3.3 Capital Stock 6
3.4 Financial Statements 7
3.5 No Undisclosed Liabilities 7
3.6 No Conflict 8
3.7 Litigation and Claims 8
3.8 Employee Contracts, Union Agreements and
Benefit Plans 8
3.9 Labor Relations 9
3.10 Environmental Matters 10
3.11 Required Licenses and Permits 10
3.12 Insurance Policies 11
3.13 Contracts and Commitments 11
3.14 Absence of Certain Changes or Events 11
3.15 Compliance With Law 13
3.16 Tax Matters 13
3.17 Status as a Foreign Issuer;
No Significant U.S. Presence 14
3.18 Investment Intent 15
3.19 No Third-Party Invasion of Territory Claims 15
3.20 Inventory 15
<PAGE>
<PAGE>
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF KO
AND TCCC ARGENTINA 15
4.1 Power and Authority 15
4.2 Organization 16
4.3 Capital Stock 16
4.4 Financial Statements 17
4.5 No Undisclosed Liabilities 17
4.6 No Conflict 17
4.7 Litigation and Claims 18
4.8 Employee Contracts, Union Agreements
and Benefit Plans 18
4.9 Labor Relations 19
4.10 Environmental Matters 19
4.11 Required Licenses and Permits 20
4.12 Insurance Policies 20
4.13 Contracts and Commitments 21
4.14 Absence of Certain Changes or Events 21
4.15 Compliance With Law 23
4.16 Tax Matters 23
4.17 Status as a Foreign Issuer;
No Significant U.S. Presence 24
4.18 Investment Intent 24
4.19 Sale of Blowing Molds 24
4.20 Inventory 24
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF CITICORP
AND SPC 25
5.1 Power and Authority; Enforceability 25
5.2 Organization 25
5.3 Capital Stock 25
5.4 No Conflict 26
ARTICLE 6 CERTAIN COVENANTS AND AGREEMENTS 26
6.1 Inspection and Access to Information;
Confidentiality 26
6.2 Further Assurances 27
6.3 Public Announcements 27
6.4 Tax Covenants 27
6.5 Reorganization of CICAN 28
6.6 Spirit of the Transactions 29
6.7 Accounting for Operating Results. 30
6.8 SPC Covenants. 30
6.9 Covenants in Andina Purchase Agreement 30
6.10 Rights of Citicorp and SPC Under Andina
Purchase Agreement 30
6.11 Andina Board of Directors 30
<PAGE>
<PAGE>
ARTICLE 7 MANAGEMENT OF INTI AND CIPET BY ANDINA
AND ATLANTICO 31
7.1 Management Authority and Responsibility. 31
7.2 Right of Access 31
7.3 Reports 31
7.4 No Compensation; Expenses 32
7.5 Effect of Termination of this Agreement 32
ARTICLE 8 CONDITIONS 33
8.1 Conditions to Each Party's Obligations 33
8.2 Conditions to Obligations of the INTI
Parties and the CIPET Parties 33
8.3 Conditions to Obligations of Andina Parties 34
8.4 No Other Conditions; Effect of Certain Breaches 35
ARTICLE 9 ACTIONS REQUIRED AT CLOSING 35
9.1 Share Certificates of CIPET 35
9.2 Share Certificates of SPC to TCCC Argentina 36
9.3 Share Certificates of INTI; Assignment of
CIPET Debt 36
9.4 Share Certificates of SPC to Interamerican 36
9.5 Share Certificates of CIPET and INTI;
CIPET Debt 36
9.6 Purchase Price 37
9.7 Further Assurances 37
ARTICLE 10 INDEMNIFICATION 37
10.1 Survival 37
10.2 Indemnification by Andina Parties 38
10.3 Indemnification by KO, TCCC Argentina and
Interamerican 39
10.4 Indemnification by Citicorp and SPC 42
10.5 Notice of Claim 42
10.6 Third Party Claims 42
ARTICLE 11 TERMINATION 43
11.1 Termination and Abandonment 43
11.2 Effect of Termination 44
ARTICLE 12 MISCELLANEOUS 44
12.1 Entire Agreement; Amendment 44
12.2 Successors and Assigns 44
12.3 Schedules and Exhibits 45
12.4 Counterparts 45
12.5 Headings 45
12.6 Modification and Waiver 45
12.7 Notices 45
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<PAGE>
12.8 GOVERNING LAW 46
12.9 Construction 47
12.10 Specific Performance 47
12.11 Consent to Jurisdiction, Etc. 47
12.12 Translations 47
12.13 No Third-Party Beneficiaries 48
12.14 "Including" 48
12.15 References 48
12.16 Material Adverse Effect 48
12.17 Expenses 48
12.18 Exchange Rate 48
12.19 Severability 49
<PAGE>
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), made and
entered into this 5th day of September, 1996, by and among
EMBOTELLADORA ANDINA S.A., a corporation organized under the
laws of Chile ("Andina"), INVERSIONES DEL ATLANTICO S.A., a
corporation organized under the laws of Argentina
("Atlantico"), INVERSIONES FREIRE LTDA., a limited liability
company organized under the laws of Chile ("Freire One"),
INVERSIONES FREIRE DOS LTDA., a limited liability company
organized under the laws of Chile ("Freire Two," and together
with Freire One, the "Majority Shareholders"), THE COCA-COLA
COMPANY, a corporation organized under the laws of Delaware,
U.S.A. ("KO"), COCA-COLA INTERAMERICAN CORPORATION, a
corporation organized under the laws of Delaware, U.S.A.
("Interamerican"), COCA-COLA DE ARGENTINA S.A., a corporation
organized under the laws of Argentina ("TCCC Argentina"),
CITICORP BANKING CORPORATION, a banking corporation organized
under the laws of Delaware, U.S.A. ("Citicorp"), and BOTTLING
INVESTMENT LIMITED, a corporation organized under the laws of
the Cayman Islands ("SPC").
W I T N E S S E T H:
WHEREAS, Interamerican owns of record and beneficially
7,802,259 shares of the capital stock of INTI S.A. Industrial Y
Comercial ("INTI") representing approximately 78.7% of the
outstanding shares of capital stock of INTI (the "INTI
Shares");
WHEREAS, TCCC Argentina owns of record and beneficially
40,006,163,999 shares of the capital stock of Complejo
Industrial Pet (CIPET) S.A. ("CIPET") representing all of the
outstanding shares of capital stock of CIPET (other than one
share held by a nominee) (the "CIPET Shares");
WHEREAS, both Interamerican and TCCC Argentina are direct
or indirect wholly owned subsidiaries of KO;
WHEREAS, Andina owns of record and beneficially 99.9% of
the outstanding shares of capital stock of Atlantico;
WHEREAS, Citicorp owns of record and beneficially all of
the outstanding shares of capital stock of SPC;
WHEREAS, pursuant to a Stock Purchase Agreement dated of
even date herewith (the "Andina Purchase Agreement"), SPC will
acquire 24,000,000 shares of the Common Stock of Andina (the
"Common Stock"), which will represent more than 6% of the
outstanding shares of capital stock of Andina;
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WHEREAS, the parties hereto desire to effect a series of
transactions relating to the acquisition by Interamerican and
TCCC Argentina of all of the outstanding shares of SPC and the
acquisition by Atlantico of the INTI Shares, the CIPET Shares
and the CIPET Debt (as defined in Section 1.2);
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements set forth herein, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES
Upon the terms and subject to the conditions of this
Agreement, the parties hereto agree as follows:
1.1 PURCHASE AND SALE OF CIPET SHARES Citicorp agrees to
purchase from TCCC Argentina and TCCC Argentina agrees to sell,
transfer, convey and deliver to Citicorp at the Closing good
and marketable title in and to the CIPET Shares. In exchange,
TCCC Argentina agrees to purchase from Citicorp and Citicorp
agrees to sell, transfer, convey and deliver to TCCC Argentina
at the Closing good and marketable title in and to a number of
shares of capital stock of SPC ("SPC Stock") which shall be
equal to (x) the number of outstanding shares of SPC Stock
multiplied by (y) the quotient obtained by dividing (i) the
CIPET Equity Value (as defined in Section 1.4) by (ii) the sum
of the CIPET Equity Value, the INTI Equity Value (as defined in
Section 1.4) and the CIPET Debt Value (as defined in Section
1.4) (such number of shares of SPC Stock to be acquired by TCCC
Argentina is referred to herein as the "TCCC Argentina Acquired
SPC Shares").
1.2 PURCHASE AND SALE OF INTI SHARES AND CIPET DEBT.
Citicorp agrees to purchase from Interamerican and
Interamerican agrees to sell, transfer, convey and deliver to
Citicorp at the Closing good and marketable title in and to the
INTI Shares and to the U.S. $66,363,532.30 of indebtedness owed
to Interamerican by CIPET (the "CIPET Debt"). In exchange,
Interamerican agrees to purchase from Citicorp and Citicorp
agrees to sell, transfer, convey and deliver to Interamerican
at the Closing good and marketable title in and to a number of
shares of SPC Stock which shall be equal to (x) the number of
outstanding shares of SPC Stock multiplied by (y) the quotient
obtained by dividing (i) the INTI Equity Value and the CIPET
Debt Value by (ii) the sum of the CIPET Equity Value, the INTI
Equity Value and the CIPET Debt Value (such number of shares of
SPC Stock to be acquired by Interamerican is referred to herein
as the "Interamerican Acquired SPC Shares").
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1.3 PURCHASE AND SALE OF CIPET SHARES, INTI SHARES AND
CIPET DEBT. Atlantico agrees to purchase from Citicorp and
Citicorp agrees to sell, transfer, convey and deliver to
Atlantico at the Closing good and marketable title in and to
the CIPET Shares, the INTI Shares and the CIPET Debt. In
exchange, Atlantico agrees to pay Citicorp an amount equal to
the Aggregate Andina Subscription Price (as defined in Section
1.4).
1.4 DEFINITIONS. For purposes of this Agreement, the
following capitalized terms shall have the following meanings:
"Aggregate Andina Subscription Price" shall mean
24,000,000 shares multiplied by the Andina Per Share
Subscription Price.
"Aggregate Market Value" shall mean the product of (i)
24,000,000 shares, times (ii) (A) the closing trading price on
the New York Stock Exchange as of the second trading day prior
to the Closing of an American Depository Share representing
shares of the Common Stock of Andina divided by (B) six.
"Andina Per Share Subscription Price" shall mean the per
share price of Andina Common Stock fixed by the Andina Board of
Directors in accordance with Section 4.6 of the Andina Purchase
Agreement as the purchase price of shares of Andina Common
Stock in connection with the Preemptive Rights Offering (as
defined in Section 4.6 of the Andina Purchase Agreement).
"CIPET Debt Value" shall equal U.S. $66,363,532.30, which
is the amount payable by CIPET in respect of the CIPET Debt.
"CIPET Equity Value" shall equal (i) 13.5% times (ii) (A)
the Aggregate Market Value, minus (B) the CIPET Debt Value.
"INTI Equity Value" shall equal (i) 86.5% times (ii) (A)
the Aggregate Market Value, minus (B) the CIPET Debt Value.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF ANDINA, ATLANTICO AND THE MAJORITY SHAREHOLDERS
Andina, Atlantico and the Majority Shareholders
hereby jointly and severally represent and warrant to KO,
Interamerican, TCCC Argentina, Citicorp and SPC as follows
(except that (x) the representations and warranties in
Sections 2.1, 2.2 and 2.3 of this Agreement relating to the
Majority Shareholders, (y) the representations and warranties
in Sections 2.1, 2.2, 2.3 and 2.6 of the Andina Purchase
Agreement relating to the Majority Shareholders incorporated
by reference in Section 2.5 of this Agreement, and
(z) the representations and warranties in
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Section 2.17 of the Andina Purchase Agreement to the extent
relating to the ultimate parent entity of Andina incorporated
by reference in Section 2.5 of this Agreement are made severally
by the Majority Shareholders only):
2.1 POWER AND AUTHORITY; ENFORCEABILITY.
(a) Each of Andina, the Majority Shareholders and
Atlantico (such parties sometimes being referred to herein
collectively as the "Andina Parties") has all requisite power
and authority to execute and deliver this Agreement, the Andina
Purchase Agreement and each other agreement entered into on the
date hereof pursuant to this Agreement or the Andina Purchase
Agreement (collectively, including this Agreement, the
"Operative Agreements") to which it is a party, to perform its
obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. Subject to the
receipt of the approval of the Amendments (as defined in the
Andina Purchase Agreement) on the part of the shareholders of
Andina, the execution, delivery and performance of this
Agreement and the other Operative Agreements by each of Andina,
the Majority Shareholders and Atlantico which is a party
thereto and the consummation by each of them of the
transactions contemplated hereby and thereby have been duly
authorized by all required corporate action.
(b) Each of this Agreement and the other Operative
Agreements has been duly executed and delivered by each of the
Andina Parties which is a party thereto and constitutes the
legal, valid and binding obligation of each such person
enforceable against each such person in accordance with its
terms, in each case subject to applicable bankruptcy,
insolvency, reorganization and other laws affecting the rights
of creditors generally.
2.2 ORGANIZATION.
(a) Andina is a corporation duly organized and
validly existing under the laws of Chile; Atlantico is a
sociedad anonima duly organized and validly existing under the
laws of Argentina; and each of the Majority Shareholders is a
limited liability company duly organized and validly existing
under the laws of Chile. Each of the Andina Parties has all
requisite power and authority, corporate or otherwise, to carry
on and conduct its business as it is now being conducted and to
own or lease its properties and assets, and is duly qualified
in each of the jurisdictions in which the conduct of its
business or the ownership of its properties and assets requires
such qualification, except where the failure to so qualify
would not have a Material Adverse Effect (as defined in Section
12.16) on the Andina Parties.
(b) The copies of the articles of incorporation
(escritura constitutiva) and Estatutos Sociales of Andina,
Atlantico and each other Andina Subsidiary and the Majority
Shareholders that have been delivered to KO, TCCC Argentina,
Interamerican, Citicorp and SPC are the complete, true and
correct articles of incorporation and Estatutos Sociales of
Andina, the Andina Subsidiaries and the Majority Shareholders.
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2.3 NO CONFLICT. The execution, delivery and performance
of this Agreement and the other Operative Agreements to which
any of the Andina Parties is a party or of any other documents
to be executed and delivered by any of the Andina Parties
pursuant to this Agreement, the consummation by the Andina
Parties of the transactions contemplated hereby or thereby, and
the fulfillment of and compliance with the terms and conditions
hereof and thereof do not and will not (i) violate or conflict
with any of the provisions of the Estatutos Sociales of Andina,
Atlantico, any of the Majority Shareholders or any Andina
Subsidiary, (ii) violate, conflict with or result in a breach
or default under or cause the termination, modification or
acceleration of any term or condition of any mortgage,
indenture, contract, license, permit or other agreement,
document or instrument to which any Andina Party or any Andina
Subsidiary is a party or by which any Andina Party or any
Andina Subsidiary or any of its properties may be bound, except
in each case for any such violations, conflicts, breaches,
defaults, terminations, modifications or accelerations that
individually or in the aggregate would not have a Material
Adverse Effect on the Andina Parties, (iii) violate any
provision of applicable laws or regulations by which any Andina
Party or any Andina Subsidiary or any of its properties may be
bound or any order, judgment, decree or ruling of any
governmental or arbitral authority or court of law applicable
to any Andina Party or any Andina Subsidiary or its respective
assets, except those which individually or in the aggregate
would not have a Material Adverse Effect on the Andina Parties,
(iv) result in the creation or imposition of any lien, claim,
charge, restriction, security interest or encumbrance of any
kind upon any asset of any Andina Party or any Andina
Subsidiary, except those which individually or in the aggregate
would not have a Material Adverse Effect on the Andina Parties,
or (v) require the approval, authorization or act of, or the
making by any Andina Party or any Andina Subsidiary of any
declaration, filing or registration with, any federal, state or
local authority, except those the absence of which would not
have a Material Adverse Effect on the Andina Parties.
2.4 INVESTMENT INTENT. Atlantico has been advised that
the INTI Shares, the CIPET Shares and the CIPET Debt have not
been registered under the United States Securities Act of 1933,
as amended (the "Securities Act"), or the securities laws of
any other jurisdiction. Atlantico is acquiring the INTI
Shares, the CIPET Shares and the CIPET Debt for investment only
and not with a view to any public distribution thereof, and
Atlantico will not offer to sell or otherwise dispose of the
INTI Shares, the CIPET Shares or the CIPET Debt in violation of
any of the registration requirements of the Securities Act or
the securities laws of any other jurisdiction.
2.5 INCORPORATION OF REPRESENTATION AND WARRANTIES. The
representations and warranties set forth in Article 2 of the
Andina Purchase Agreement are incorporated herein by reference
with the same effect as if fully set forth herein (and any
reference to Citicorp or SPC in such incorporated
representations and warranties shall also for purposes of this
Agreement be deemed to be a reference to KO, TCCC Argentina and
Interamerican), and KO, Interamerican, TCCC Argentina, Citicorp
and SPC are entitled to rely on such representations and
warranties as if fully set forth herein.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF KO AND INTERAMERICAN
KO and Interamerican hereby jointly and severally
represent and warrant to Andina, the Majority Shareholders and
Atlantico as follows:
3.1 POWER AND AUTHORITY.
(a) Each of Interamerican and INTI (collectively,
the "INTI Parties") and KO has all requisite power and
authority to execute and deliver this Agreement and the other
Operative Agreements to which it is a party and to perform its
obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and the other
Operative Agreements by KO and by each of the INTI Parties
which is a party hereto and thereto and the consummation by
each of them of the transactions contemplated hereby and
thereby have been duly authorized by all required corporate
action.
(b) Each of this Agreement and the other Operative
Agreements has been duly executed and delivered by KO and by
each of the INTI Parties which is a party hereto and thereto
and constitutes the legal, valid and binding obligation of each
such person enforceable against each such person in accordance
with their terms, in each case subject to applicable
bankruptcy, insolvency, reorganization and other laws affecting
the rights of creditors generally.
3.2 ORGANIZATION.
(a) INTI is a corporation duly organized and validly
existing under the laws of Argentina, and each of KO and
Interamerican is a corporation duly organized and validly
existing under the laws of Delaware, U.S.A. Each of
Interamerican and INTI has all requisite power and authority,
corporate or otherwise, to carry on and conduct its business as
it is now being conducted and to own or lease its properties
and assets, and is duly qualified in each of the jurisdictions
in which the conduct of its business or the ownership of its
properties and assets requires such qualification except where
the failure to so qualify would not have a Material Adverse
Effect on the INTI Parties.
(b) INTI has no subsidiaries. Schedule 3.2(b) sets
forth every ownership interest of INTI in any partnership or
commercial corporation, joint venture or other entity. There
are no outstanding options, subscriptions, rights or other
commitments or obligations on the part of Interamerican or INTI
to issue or dispose of or to redeem or acquire any shares of
capital stock of INTI or other ownership interest therein.
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(c) The copies of the organizational documents of
Interamerican and INTI that have been delivered to Andina are
complete, true and correct copies of such organizational
documents.
3.3 CAPITAL STOCK.
(a) The authorized capital stock of INTI and the
number of issued and outstanding shares thereof is set forth in
Schedule 3.3(a). All of such issued and outstanding shares of
capital stock are validly issued, fully paid and nonassessable
and, except as noted in Schedule 3.3(a), owned of record and
beneficially by Interamerican directly or indirectly. No such
shares have been issued in violation of, or will be subject to,
any preemptive or any subscription rights. The transfer and
delivery of the INTI Shares by Interamerican to Citicorp as
contemplated by this Agreement will transfer good and valid
title to the INTI Shares to Citicorp, free and clear of all
liens, security interests, encumbrances, claims, charges and
restrictions (other than any such liens, security interests,
encumbrances, claims, charges and restrictions that may arise
from the act of Citicorp). Except for this Agreement, neither
Interamerican nor INTI has outstanding, and neither is bound
by, any subscriptions, options, warrants, puts, calls,
commitments, agreements, arrangements or rights of any
character (including employee benefit plans) obligating INTI to
issue, sell, purchase, redeem, repurchase, acquire, register,
vote or transfer any shares of capital stock or any other
equity security of INTI, including any right of conversion or
exchange under any outstanding security or other instrument.
All issuances, transfers, purchases or redemptions of the
capital stock of INTI have been in compliance in all material
respects with all applicable agreements and all applicable
laws, and all taxes thereon payable by INTI have been paid.
There are no shares of capital stock held in the treasury of
INTI.
(b) All of the capital stock of Interamerican is,
directly or indirectly, owned beneficially by KO.
3.4 FINANCIAL STATEMENTS. INTI has furnished Andina
(i) the audited balance sheet of INTI, translated into U.S.
Dollars, as of December 31, 1995, and the related unaudited
statements of income, retained earnings and cash flows for the
year then ended (the "Annual INTI Financial Statements") and
(ii) the unaudited balance sheet of INTI as of March 31, 1996
and the related unaudited statements of income, retained
earnings and cash flows for the three-month period ended March
31, 1996 (the "Interim INTI Financial Statements"). The Annual
INTI Financial Statements have been prepared and are presented
in conformity with U.S. GAAP consistently applied throughout
the periods involved (except as noted therein). The Annual
INTI Financial Statements present fairly in all material
respects the financial position and the results of operations
and cash flows of INTI as of their respective dates and for the
respective periods covered thereby. The Interim INTI Financial
Statements present fairly in all material respects the
financial position of INTI as of March 31, 1996, and the
related results of their operations for the three-month
period then ended (subject to normal and recurring
year-end adjustments). As used in this Agreement,
the term "INTI Financial Statements" means,
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collectively, the Annual INTI Financial Statements and the
Interim INTI Financial Statements. The audited balance sheet
as of December 31, 1995, included in the INTI Financial
Statements is referred to herein as the "1995 INTI Balance Sheet."
3.5 NO UNDISCLOSED LIABILITIES. INTI is not subject to
any obligation or liability of any nature (including contingent
liabilities and unasserted claims), which would be required by
U.S. GAAP to be reflected on a consolidated balance sheet of
INTI or the notes thereto and which is not reflected on the
1995 INTI Balance Sheet or the notes thereto, other than
obligations pursuant to this Agreement or the transactions
contemplated hereby and liabilities which individually or in
the aggregate do not have a Material Adverse Effect on the INTI
Parties.
3.6 NO CONFLICT. The execution, delivery and performance
of this Agreement and the other Operative Agreements to which
any of the INTI Parties is a party or of any other documents to
be executed and delivered by Interamerican and INTI pursuant to
this Agreement, the consummation by Interamerican and INTI of
the transactions contemplated hereby or thereby, and the
fulfillment of and compliance with the terms and conditions
hereof and thereof do not and will not (i) violate or conflict
with any of the provisions of the Estatutos Sociales or other
organizational documents of Interamerican or INTI, (ii) except
as set forth on Schedule 3.6, violate, conflict with or result
in a breach or default under or cause the termination,
modification or acceleration of any term or condition of any
mortgage, indenture, contract, license, permit or other
agreement, document or instrument to which Interamerican or
INTI is a party or by which Interamerican or INTI or any of its
properties may be bound, except in each case for any such
violations, conflicts, breaches, defaults, terminations,
modifications or accelerations that individually or in the
aggregate would not have a Material Adverse Effect on the INTI
Parties, (iii) violate any provision of applicable laws or
regulations by which Interamerican or INTI or any of their
respective properties may be bound, or any order, judgment,
decree or ruling of any governmental or arbitral authority or
court of law applicable to Interamerican or INTI or its
respective assets, except those which individually or in the
aggregate would not have a Material Adverse Effect on the INTI
Parties, (iv) result in the creation or imposition of any lien,
claim, charge, restriction, security interest or encumbrance of
any kind upon any material asset of Interamerican or INTI,
except those which individually or in the aggregate would not
have a Material Adverse Effect on the INTI Parties or
(v) require the approval, authorization or act of, or the
making by Interamerican or INTI of any declaration, filing or
registration with, any federal, state or local authority,
except those the absence of which would not have a Material
Adverse Effect on the INTI Parties.
3.7 LITIGATION AND CLAIMS. Except as set forth in
Schedule 3.7, there are no lawsuits, claims, actions,
investigations, indictments or information, or administrative,
arbitration or other proceedings pending, or, to the knowledge
of Interamerican threatened against INTI or involving any of
its properties or businesses which (individually or in the
aggregate), if adversely determined, would result in a Material
Adverse Effect on the INTI Parties, and neither Interamerican
nor INTI has any knowledge of any grounds for the assertion of any
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claim which if adversely determined would have such an
effect. There are no material judgments, orders, injunctions,
decrees, stipulations or awards (whether rendered by a court,
administrative agency, or by arbitration, pursuant to a
grievance or other procedure) against or relating to INTI.
3.8 EMPLOYEE CONTRACTS, UNION AGREEMENTS AND BENEFIT
PLANS.
(a) As used in this Agreement, the term "INTI
Employee Benefit Plans" means all agreements, arrangements,
commitments, policies or understandings of any kind (whether
written or oral) which relate to compensation, remuneration or
benefits in any way and/or which constitute employment,
consulting or collective bargaining contracts, or deferred
compensation, pension, multi-employer, profit sharing, thrift,
retirement, stock ownership, stock appreciation rights, bonus,
stock option, stock purchase or other compensation commitments,
benefit plans, arrangements or plans, including all welfare
plans and all union-sponsored plans, of or pertaining to the
present or former employees (including retirees), directors or
independent contractors (or their dependents, spouses or
beneficiaries) of INTI or any predecessors in interest thereto,
that are currently in effect or as to which INTI has any
ongoing liability or obligation whatsoever.
(b) INTI and its predecessors in interest have
complied with all of their respective obligations with respect
to all INTI Employee Benefit Plans, including the payment of
all social security and other contributions required by law,
except for failures to comply that individually or in the
aggregate would not have a Material Adverse Effect on the INTI
Parties, and the INTI Employee Benefit Plans have been
maintained in compliance with all applicable laws and
regulations.
(c) No INTI Employee Benefit Plan is currently under
investigation, audit or review by any governmental authority or
agency.
(d) No INTI Employee Benefit Plan is liable for any
Taxes, except in the ordinary course and for current periods.
(e) To the knowledge of INTI, there are no claims,
pending or threatened, by any participant in any of INTI
Employee Benefit Plans and no basis for any such claim or
claims exists, except for benefits to participants or
beneficiaries in accordance with the terms of the INTI Employee
Benefit Plans and except for claims that individually or in the
aggregate would not have a Material Adverse Effect on the INTI
Parties.
3.9 LABOR RELATIONS. Except as set forth in Schedule 3.9:
(a) INTI is in compliance with all applicable
laws and collective bargaining agreements respecting
employment and employment practices, terms and conditions of
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employment, wages and hours and occupational safety and health,
which if not complied with (individually or in the aggregate)
would have a Material Adverse Effect on the INTI Parties.
(b) There is no social security or labor complaint
and, no charges, investigations, administrative proceedings or
formal complaints of discrimination against or involving INTI
pending or to the knowledge of INTI threatened before any
regulatory agency or any court of law, which, if determined
adversely to INTI, individually or in the aggregate would have
a Material Adverse Effect on the INTI Parties.
(c) There is no labor strike, dispute, slowdown or
stoppage pending or threatened against INTI, except for
threatened actions which, if realized, individually or in the
aggregate would not have a Material Adverse Effect on the INTI
Parties.
(d) No organizational drive exists or has existed
within the past twenty-four (24) months respecting the
employees of INTI or any predecessor thereof, except for those
which individually or in the aggregate did not and will not
have a Material Adverse Effect on the INTI Parties.
(e) No grievance proceeding or arbitration
proceeding arising out of or under any collective bargaining
agreement is pending against INTI, or to the knowledge of INTI,
threatened, and no basis for any claim therefor exists, except
for such proceedings or claims which individually or in the
aggregate would not have a Material Adverse Effect on the INTI
Parties.
3.10 ENVIRONMENTAL MATTERS. Except as set forth in
Schedule 3.10:
(a) Except for failures to comply which would not
individually or in the aggregate have a Material Adverse Effect
on the INTI Parties, INTI is in compliance with all applicable
laws and regulations relating to pollution or the protection of
human health and the environment (including, without
limitation, ambient air, surface water, ground water, land
surface or subsurface strata) and with all applicable
requirements and obligations contained in such laws and
regulations and with any orders or judgments of any government
agency or court of law relating thereto.
(b) INTI has obtained all permits, licenses and
other authorizations and has filed all notices which are
required to be obtained or filed by it for the operation of its
business under all applicable laws relating to pollution or the
protection of human health and the environment, except for
failures to obtain or file any of the foregoing which
individually or in the aggregate would not have a Material
Adverse Effect on the INTI Parties.
(c) INTI is in compliance with all terms and
conditions of such required permits, licenses and
authorizations, except for noncompliance therewith which
individually or in the aggregate would not have a Material
Adverse Effect on the INTI Parties.
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(d) To INTI's knowledge, and based on current (or
enacted but not yet effective) laws, regulations and
interpretations thereof, as currently administered, with
respect to INTI or its business, there are no past or present
events, conditions, circumstances, activities, practices or
plans which may interfere with or prevent continued compliance,
or which may give rise to any liability, or otherwise form the
basis of any claim, action, proceeding or investigation, based
on or related to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling, or the emission, discharge, release or threatened
release into the environment, of any pollutant, contaminant or
hazardous or toxic material or waste, except for any of the
foregoing which individually or in the aggregate would not have
a Material Adverse Effect on the INTI Parties.
3.11 REQUIRED LICENSES AND PERMITS. INTI has all
licenses, permits or other authorizations necessary for the
production and sale of its products in the manner currently
produced and sold, and the conduct of its business as now
conducted, except for failures to have the same which would not
individually or in the aggregate have a Material Adverse Effect
on the INTI Parties.
3.12 INSURANCE POLICIES. As used in this Agreement, the
term "INTI Insurance Policies" means all insurance policies in
force naming INTI as an insured or beneficiary or as a loss
payable payee. Except as set forth in Schedule 3.12, neither
INTI has received notice of any pending or threatened
cancellation or premium increase (retroactive or otherwise)
with respect to any of the INTI Insurance Policies, and INTI is
in compliance with all conditions contained therein, except for
such cancellations, increases or failures to comply which
individually or in the aggregate would not have a Material
Adverse Effect on the INTI Parties. There are no material
pending claims against such insurance by INTI as to which
insurers are defending under reservation of rights or have
denied liability, and there exists no material claim under such
insurance that has not been properly filed by INTI.
3.13 CONTRACTS AND COMMITMENTS.
(a) As used in this Agreement, the term "INTI
Contract" means any material contract, agreement, promissory
note, debt instrument, or legally binding commitment,
arrangement, undertaking or understanding to which INTI is a
party or by which it is bound or to which it or its property is
subject, whether written or oral and including without
limitation each and every amendment, modification or supplement
thereto.
(b) INTI is in compliance in all respects with all
terms of the INTI Contracts, except for noncompliance which
individually or in the aggregate would not have a Material
Adverse Effect on the INTI Parties. To the knowledge of INTI,
(i) there is no bankruptcy, insolvency or similar proceeding
with respect to any party to an INTI Contract having any
material executory obligations thereunder; (ii) all such INTI
Contracts are valid and binding, are in full force and effect
and are enforceable in accordance with their terms, subject
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to applicable bankruptcy, insolvency, reorganization and other
laws affecting the rights of creditors generally; and (iii)
except as set forth in Schedule 3.13, no event has occurred and
is continuing which alone or in combination with any other
event would constitute a default under any such INTI Contract
by any party thereto which, individually or in the aggregate
with other such events, would have a Material Adverse Effect on
the INTI Parties.
3.14 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Since March 31, 1996, there has been no material
adverse change in the financial condition or business of INTI
taken as a whole.
(b) Except as disclosed in Schedule 3.14(b), or in
any other Schedule hereto, and except for the transactions
contemplated by this Agreement, since March 31, 1996 INTI has
conducted its business only in the ordinary course and
consistent with past practice.
(c) Except as disclosed in Schedule 3.14(c), from
March 31, 1996 through the date hereof, INTI has:
(i) neither changed nor amended its Estatutos
Sociales or similar charter documents;
(ii) not issued, sold or granted options, warrants or
rights to purchase or subscribe to, or entered into any
agreement or contract with respect to the issuance or sale
of, any capital stock of INTI or rights or obligations
convertible into or exchangeable for any shares of capital
stock of INTI and not altered the terms of any presently
outstanding options or made any changes (by split-up,
combination, reorganization or otherwise) in the capital
structure of INTI;
(iii) not declared, paid or set aside for payment
any dividend or other distribution in respect of the
capital stock or other equity securities of INTI and not
redeemed, purchased or otherwise acquired any shares of
capital stock or other securities of INTI or rights or
obligations convertible into or exchangeable for any
shares of capital stock or other securities of INTI or
obligations convertible into such, or any options,
warrants or other rights to purchase or subscribe to any
of the foregoing;
(iv) not merged or consolidated with any other person
or acquired or entered into an agreement to acquire stock
or assets of any business or entity in an amount in excess
of U.S. $50,000;
(v) not (A) created, incurred or assumed any
long-term indebtedness, letters of credit or similar
obligations (including obligations in respect of
capital leases which individually or in the
aggregate involve annual payments in excess of
U.S. $50,000) in excess of U.S. $50,000 or, except
in the ordinary course of business under existing lines
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of credit, created, incurred or assumed any short-term debt
for borrowed money, (B) assumed, guaranteed, endorsed or
otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other
person other than INTI in excess of U.S. $50,000 (except in
the ordinary course of business and consistent with past
practice), (C) made any loans or advances to any other
person in excess of U.S. $50,000, except in the ordinary
course of business and consistent with past practice, or
(D) made capital expenditures not reflected in INTI's
current business plan involving in excess of U.S.$50,000;
(vi) not granted any increase in the compensation of
officers, directors or employees, whether now or hereafter
payable (except for employee compensation increases in the
ordinary course of business and consistent with past
practice);
(vii) not sold or otherwise disposed of in any
transaction or related series of transactions assets
having a value greater than U.S. $100,000 in the
aggregate;
(viii) not waived any material claims or rights
except in the ordinary course of business;
(ix) not entered into any agreement involving
payments annually in excess of U.S. $50,000 or in the
aggregate in excess of U.S. $150,000, except in the
ordinary course of business; and
(x) not entered into any transaction with KO or any
of its subsidiaries which is not in the ordinary course of
business and on arms' length terms;
(xi) not commenced, defended or settled any
litigation or arbitration in which the aggregate amount
involved is in excess of U.S. $50,000;
(xii) not assumed or incurred any lien or similar
encumbrance on any of its assets in an amount in excess of
U.S. $50,000 in the aggregate;
(xiii) not made any material change in its
accounting principles, methods or practices or
amortization policies or rates; or
(xiv) not entered into any binding agreement to
do any of the foregoing.
3.15 COMPLIANCE WITH LAW. Except for failures to comply
which would not individually or in the aggregate have a
Material Adverse Effect on the INTI Parties, INTI is not and
has not been (by virtue of any action, omission to act,
contract to which it is a party or any occurrence or state of
facts whatsoever) in violation of any applicable laws,
ordinances, regulations, orders or decrees or any other
requirement of any governmental agency or court of
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law binding upon it, or relating to its properties, employees
or business, or its advertising, sales or pricing practices.
3.16 TAX MATTERS
(a) For purposes of this Agreement, the term "Taxes"
shall mean all taxes, including withholding taxes and social
security contributions, assessments, charges, duties, fees,
levies, mandatory employee profit sharing or other governmental
charges (including interest, penalties or surcharges associated
therewith), including national, state, province, city, country
or other income, franchise, capital stock, real property,
personal property, tangible, withholding, unemployment
compensation, disability, transfer, sales, soft drink, use,
excise, gross receipts and all other taxes of any kind for
which a person may have any liability imposed by any federal,
state, province, county, city, country or government or
subdivision or agency thereof, whether disputed or not.
(b) Except as set forth in Schedule 3.16: (i) all
returns with respect to Taxes, including estimated returns and
reports of every kind, which are due to have been filed by INTI
in accordance with any applicable law, have been duly filed,
except where failure to file does not and will not individually
or in the aggregate have a Material Adverse Effect on the INTI
Parties; (ii) all Taxes for which INTI may have any liability
through the date hereof, have been paid in full or are to the
extent required by U.S. GAAP accrued as liabilities for Taxes
on the books and records of INTI, except where the failure to
do so would not have a Material Adverse Effect on the INTI
Parties; (iii) the amounts so paid on or before the date
hereof, together with any amounts accrued as liabilities for
Taxes (whether accrued as currently payable or deferred Taxes)
on the books of INTI and reflected in the INTI Financial
Statements will be adequate to satisfy all material liabilities
for Taxes of INTI in any jurisdiction through March 31, 1996,
including Taxes accruable upon income earned through March 31,
1996; (iv) there are not now any extensions of time in effect
with respect to the dates on which any returns or reports of
Taxes on the part of INTI were or are due to be filed, except
where such extensions would not have a Material Adverse Effect
on the INTI Parties; (v) all deficiencies asserted as a result
of any examination of any return or report of Taxes on the part
of INTI have been paid in full, accrued on the books of INTI,
or finally settled, and no issue has been raised in any such
examination which, by application of the same or similar
principles, reasonably could be expected to result in a
proposed deficiency for any other period not so examined;
(vi) no claims have been asserted and, to the knowledge of INTI
no proposals or deficiencies for any Taxes on the part of INTI
are being asserted, proposed or threatened, and no audit or
investigation of any return or report of Taxes on the part of
INTI is currently underway, pending or, to the knowledge of
INTI threatened, except such as will not individually or in the
aggregate have a Material Adverse Effect on the INTI Parties;
(vii) to the knowledge of INTI all returns or reports of
Taxes on the part of INTI due to have been examined by all
relevant tax authorities have either been examined by all
relevant tax authorities or the taxable years therefor have
been closed by operation of law; and (viii) there are no
equivalents under local law of U.S. style outstanding waivers
or agreements by INTI for the extension of time for the
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assessment of any Taxes on the part of INTI or deficiency thereof,
nor any equivalents thereof under applicable local law, nor are
there any requests for rulings, outstanding subpoenas or requests
for information, notices of proposed reassessment of any property
owned or leased by INTI or any other matter outside the ordinary
course of business pending between INTI and any taxing authority,
except such as would not have a Material Adverse Effect on the
INTI Parties.
(c) In each case, adequate provision, including
provision in the deferred tax account, has been made in the
INTI Financial Statements for all material deferred and accrued
liabilities for Taxes of INTI as of their respective dates with
respect to operations for periods ending on such dates.
3.17 STATUS AS A FOREIGN ISSUER; NO SIGNIFICANT U.S.
PRESENCE.
(a) INTI (i) is not incorporated in the United
States, (ii) is not organized under the laws of the United
States and (iii) does not have its principal offices located in
the United States.
(b) The acquisition of voting securities of INTI
would not confer on the acquiring person control of (i) assets
(other than investment assets) located in the United States
having an aggregate book value or market value of
U.S.$15,000,000 or more or (ii) sales in or into the United
States of U.S. $25,000,000 or more during the fiscal year ended
December 31, 1995.
3.18 INVESTMENT INTENT. Interamerican has been advised
that the Acquired Andina Shares have not been registered under
the Securities Act or the securities laws of any other
jurisdiction. Interamerican is acquiring the Acquired Andina
Shares through SPC for investment only and not with a view to
any public distribution thereof, and Interamerican will not
offer to sell or otherwise dispose of the Acquired Andina
Shares in violation of any of the registration requirements of
the Securities Act or the securities laws of any other
jurisdiction.
3.19 NO THIRD-PARTY INVASION OF TERRITORY CLAIMS. Except
as set forth in Schedule 3.19, to the knowledge of
Interamerican, since March 31, 1996, INTI has not received
notice of any claim against it by another bottler for wrongful
shipment of soft drinks into such bottler's territory, nor has
INTI wrongfully shipped any soft drink products into any third
party's bottling territory, and INTI does not have any such
claim against any other bottler.
3.20 INVENTORY. Substantially all of the inventories of
INTI included on the March 31, 1996 unaudited balance sheet of
INTI referred to in Section 3.4 which have not been disposed of
prior to the Closing conform to acceptable KO standards and are
either useable in the ordinary course of INTI's business or are
of a quality that would permit substantially all of such
inventories to be sold at prices reasonably approximate to the
market prices for such inventories as prevailing on the date of
this Agreement.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF KO AND TCCC ARGENTINA
KO and TCCC Argentina hereby jointly and severally
represent and warrant to Andina as follows:
4.1 POWER AND AUTHORITY.
(a) Each of TCCC Argentina and CIPET (collectively,
the "CIPET Parties") and KO has all requisite power and
authority to execute and deliver this Agreement and the other
Operative Agreements to which it is a party and to perform its
obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and the other
Operative Agreements by KO (in the case of this Agreement) and
by each of the CIPET Parties which is a party hereto and
thereto and the consummation by each of them of the
transactions contemplated hereby and thereby have been duly
authorized by all required corporate action.
(b) Each of this Agreement and the other Operative
Agreements has been duly executed and delivered by KO (in the
case of this Agreement) and by each of the CIPET Parties which
is a party hereto and thereto and constitutes the legal, valid
and binding obligation of each such person enforceable against
each such person in accordance with their terms, in each case
subject to applicable bankruptcy, insolvency, reorganization
and other laws affecting the rights of creditors generally.
4.2 ORGANIZATION.
(a) Each of TCCC Argentina and CIPET is a
corporation duly organized and validly existing under the laws
of the Republic of Argentina ("Argentina") and has all
requisite power and authority, corporate or otherwise, to carry
on and conduct its business as it is now being conducted and to
own or lease its properties and assets, and is duly qualified
in each of the jurisdictions in which the conduct of its
business or the ownership of its properties and assets requires
such qualification except where the failure to so qualify would
not have a Material Adverse Effect on the CIPET Parties.
(b) CIPET has no subsidiaries. Schedule 4.2(b) sets
forth every ownership interest of CIPET in any partnership or
commercial corporation, joint venture or other entity. There
are no outstanding options, subscriptions, rights or other
commitments or obligations on the part of TCCC Argentina or
CIPET to issue or dispose of or to redeem or acquire any shares
of capital stock of CIPET or other ownership interest therein.
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(c) The copies of the articles of incorporation
(escritura constitutiva) and Estatutos of TCCC Argentina and
CIPET that have been delivered to Andina are the complete, true
and correct articles of incorporation and Estatutos of TCCC
Argentina and CIPET.
4.3 CAPITAL STOCK.
(a) The authorized capital stock of CIPET and the
number of issued and outstanding shares thereof is set forth in
Schedule 4.3(a). All of such issued and outstanding shares of
capital stock are validly issued, fully paid and nonassessable
and, except as noted in Schedule 4.3(a), owned of record and
beneficially by TCCC Argentina directly or indirectly. No such
shares have been issued in violation of, or will be subject to,
any preemptive or any subscription rights. The transfer and
delivery of the CIPET Shares by TCCC Argentina to Citicorp as
contemplated by this Agreement will transfer good and valid
title to the CIPET Shares to Citicorp, free and clear of all
liens, security interests, encumbrances, claims, charges and
restrictions (other than any such liens, security interests,
encumbrances, claims, charges and restrictions that may arise
from the act of Citicorp). Except for this Agreement, neither
TCCC Argentina nor CIPET has outstanding, and neither is bound
by, any subscriptions, options, warrants, puts, calls,
commitments, agreements, arrangements or rights of any
character (including employee benefit plans) obligating CIPET
to issue, sell, purchase, redeem, repurchase, acquire,
register, vote or transfer any shares of capital stock or any
other equity security of CIPET, including any right of
conversion or exchange under any outstanding security or other
instrument. All issuances, transfers, purchases or redemptions
of the capital stock of CIPET have been in compliance in all
material respects with all applicable agreements and all
applicable laws, and all taxes thereon payable by CIPET have
been paid. There are no shares of capital stock held in the
treasury of CIPET.
(b) All of the capital stock of TCCC Argentina is,
directly or indirectly, owned beneficially by KO.
4.4 FINANCIAL STATEMENTS. CIPET has furnished Andina
(i) the unaudited balance sheet of CIPET, translated into U.S.
Dollars, as of December 31, 1995, and the related unaudited
statements of income, retained earnings and cash flows for the
year then ended (the "Annual CIPET Financial Statements") and
(ii) the unaudited balance sheet of CIPET as of March 31, 1996
and the related unaudited statements of income, retained
earnings and cash flows for the three-month period ended March
31, 1996 (the "Interim CIPET Financial Statements"). The
Audited CIPET Financial Statements have been prepared and are
presented in conformity with U.S. GAAP consistently applied
throughout the periods involved (except as noted therein). The
Annual CIPET Financial Statements present fairly in all
material respects the financial position and the results of
operations and cash flows of CIPET as of their respective dates
and for the respective periods covered thereby. The Interim
CIPET Financial Statements present fairly in all material
respects the financial position of CIPET as of March 31, 1996,
and the related results of their operations for the three-month
period then ended (subject to normal and recurring year-end
adjustments). As used in this Agreement, the term
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"CIPET Financial Statements" means, collectively, the Annual
CIPET Financial Statements and the Interim CIPET Financial
Statements. The audited balance sheet as of December 31, 1995,
included in the CIPET Financial Statements is referred to
herein as the "1995 CIPET Balance Sheet".
4.5 NO UNDISCLOSED LIABILITIES. CIPET is not subject to
any obligation or liability of any nature (including contingent
liabilities and unasserted claims), which would be required by
U.S. GAAP to be reflected on a consolidated balance sheet of
CIPET or the notes thereto and which is not reflected on the
1995 CIPET Balance Sheet or the notes thereto, other than
obligations pursuant to this Agreement or the transactions
contemplated hereby and liabilities which individually or in
the aggregate do not have a Material Adverse Effect on the
CIPET Parties.
4.6 NO CONFLICT. The execution, delivery and performance
of this Agreement and the other Operative Agreements to which
any of the CIPET Parties is a party or of any other documents
to be executed and delivered by TCCC Argentina and CIPET
pursuant to this Agreement, the consummation by TCCC Argentina
and CIPET of the transactions contemplated hereby or thereby,
and the fulfillment of and compliance with the terms and
conditions hereof and thereof do not and will not (i) violate
or conflict with any of the provisions of the Estatutos
Sociales or other organizational documents of TCCC Argentina or
CIPET, (ii) violate, conflict with or result in a breach or
default under or cause the termination, modification or
acceleration of any term or condition of any mortgage,
indenture, contract, license, permit or other agreement,
document or instrument to which TCCC Argentina or CIPET is a
party or by which TCCC Argentina or CIPET or any of its
properties may be bound, except in each case for any such
violations, conflicts, breaches, defaults, terminations,
modifications or accelerations that individually or in the
aggregate would not have a Material Adverse Effect on the CIPET
Parties, (iii) violate any provision of applicable laws or
regulations by which TCCC Argentina or CIPET or any of their
respective properties may be bound or any order, judgment,
decree or ruling of any governmental or arbitral authority or
court of law applicable to TCCC Argentina or CIPET or its
respective assets, except those which individually or in the
aggregate would not have a Material Adverse Effect on the CIPET
Parties, (iv) result in the creation or imposition of any lien,
claim, charge, restriction, security interest or encumbrance of
any kind upon any material asset of TCCC Argentina or CIPET,
except those which individually or in the aggregate would not
have a Material Adverse Effect on the CIPET Parties, or
(v) require the approval, authorization or act of, or the
making by TCCC Argentina or CIPET of any declaration, filing or
registration with, any federal, state or local authority,
except those the absence of which would not have a Material
Adverse Effect on the CIPET Parties.
4.7 LITIGATION AND CLAIMS. Except as set forth in
Schedule 4.7, there are no lawsuits, claims, actions, investigations,
indictments or information, or administrative, arbitration or other
proceedings pending, or, to the knowledge of TCCC Argentina
threatened against CIPET or involving any of its properties or
businesses which (individually or in the aggregate), if
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adversely determined, would result in a Material Adverse
Effect on the CIPET Parties, and neither TCCC Argentina
nor CIPET has any knowledge of any grounds for the assertion of
any claim which if adversely determined would have such an
effect. There are no material judgments, orders, injunctions,
decrees, stipulations or awards (whether rendered by a court,
administrative agency, or by arbitration, pursuant to a
grievance or other procedure) against or relating to CIPET.
4.8 EMPLOYEE CONTRACTS, UNION AGREEMENTS AND BENEFIT
PLANS.
(a) As used in this Agreement, the term "CIPET
Employee Benefit Plans" means all agreements, arrangements,
commitments, policies or understandings of any kind (whether
written or oral) which relate to compensation, remuneration or
benefits in any way and/or which constitute employment,
consulting or collective bargaining contracts, or deferred
compensation, pension, multi-employer, profit sharing, thrift,
retirement, stock ownership, stock appreciation rights, bonus,
stock option, stock purchase or other compensation commitments,
benefit plans, arrangements or plans, including all welfare
plans and all union-sponsored plans, of or pertaining to the
present or former employees (including retirees), directors or
independent contractors (or their dependents, spouses or
beneficiaries) of CIPET or any predecessors in interest
thereto, that are currently in effect or as to which CIPET has
any ongoing liability or obligation whatsoever.
(b) CIPET and its predecessors in interest have
complied with all of their respective obligations with respect
to all CIPET Employee Benefit Plans, including the payment of
all social security and other contributions required by law,
except in each case for failures to comply that individually or
in the aggregate would not have a Material Adverse Effect on
the CIPET Parties, and the CIPET Employee Benefit Plans have
been maintained in compliance with all applicable laws and
regulations.
(c) No CIPET Employee Benefit Plan is currently
under investigation, audit or review by any governmental
authority or agency.
(d) No CIPET Employee Benefit Plan is liable for any
Taxes, except in the ordinary course and for current periods.
(e) To the knowledge of CIPET, there are no claims,
pending or threatened, by any participant in any of CIPET
Employee Benefit Plans and no basis for any such claim or
claims exists, except for benefits to participants or
beneficiaries in accordance with the terms of the CIPET
Employee Benefit Plans and except for claims that individually
or in the aggregate would not have a Material Adverse Effect on
the CIPET Parties.
4.9 LABOR RELATIONS. Except as set forth in Schedule 4.9:
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(a) CIPET is in compliance with all applicable laws
and collective bargaining agreements respecting employment and
employment practices, terms and conditions of employment, wages
and hours and occupational safety and health, which if not
complied with (individually or in the aggregate) would have a
Material Adverse Effect on the CIPET Parties.
(b) There is no social security or labor complaint
and, no charges, investigations, administrative proceedings or
formal complaints of discrimination against or involving CIPET
pending or to the knowledge of CIPET threatened before any
regulatory agency or any court of law, as to which there is a
reasonable possibility of an adverse determination, except
those which, if determined adversely to CIPET, individually or
in the aggregate would have a Material Adverse Effect on the
CIPET Parties.
(c) There is no labor strike, dispute, slowdown or
stoppage pending or threatened against CIPET, except for
threatened actions which, if realized, individually or in the
aggregate would not have a Material Adverse Effect on the CIPET
Parties.
(d) No organizational drive exists or has existed
within the past twenty-four (24) months respecting the
employees of CIPET or any predecessor thereof, except for those
which individually or in the aggregate did not and will not
have a Material Adverse Effect on the CIPET Parties.
(e) No grievance proceeding or arbitration
proceeding arising out of or under any collective bargaining
agreement is pending against CIPET, or, to the knowledge of
CIPET, threatened, and no basis for any claim therefor exists,
except for such proceedings or claims which individually or in
the aggregate would not have a Material Adverse Effect on the
CIPET Parties.
4.10 ENVIRONMENTAL MATTERS. Except as set forth in
Schedule 4.10:
(a) Except for failures to comply which would not
individually or in the aggregate have a Material Adverse Effect
on the CIPET Parties, CIPET is in compliance with all
applicable laws and regulations relating to pollution or the
protection of human health and the environment (including,
without limitation, ambient air, surface water, ground water,
land surface or subsurface strata) and with all applicable
requirements and obligations contained in such laws and
regulations and with any orders or judgments of any government
agency or court of law relating thereto.
(b) CIPET has obtained all permits, licenses and
other authorizations and has filed all notices which are
required to be obtained or filed by it for the operation of its
business under all applicable laws relating to pollution or the
protection of human health and the environment, except for
failures to obtain or file any of the foregoing which
individually or in the aggregate would not have a Material
Adverse Effect on the CIPET Parties.
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(c) CIPET is in compliance with all terms and
conditions of such required permits, licenses and
authorizations, except for noncompliance therewith which
individually or in the aggregate would not have a Material
Adverse Effect on the CIPET Parties.
(d) To CIPET's knowledge, and based on current, (or
enacted but not yet effective) laws, regulations and
interpretations thereof, as currently administered, with
respect to CIPET or its business, there are no past or present
events, conditions, circumstances, activities, practices or
plans which may interfere with or prevent continued compliance,
or which may give rise to any liability, or otherwise form the
basis of any claim, action, proceeding or investigation, based
on or related to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling, or the emission, discharge, release or threatened
release into the environment, of any pollutant, contaminant or
hazardous or toxic material or waste, except for any of the
foregoing which individually or in the aggregate would not have
a Material Adverse Effect on the CIPET Parties.
4.11 REQUIRED LICENSES AND PERMITS. CIPET has all
licenses, permits or other authorizations necessary for the
production and sale of its products in the manner currently
produced and sold, and the conduct of its business as now
conducted, except for failures to have the same which would not
individually or in the aggregate have a Material Adverse Effect
on the CIPET Parties.
4.12 INSURANCE POLICIES. As used in this Agreement, the
term "CIPET Insurance Policies" means all insurance policies in
force naming CIPET as an insured or beneficiary or as a loss
payable payee. Except as set forth in Schedule 4.12, neither
CIPET has received notice of any pending or threatened
cancellation or premium increase (retroactive or otherwise)
with respect to any of the CIPET Insurance Policies, and CIPET
is in compliance with all conditions contained therein, except
for such cancellations, increases or failures to comply which
individually or in the aggregate would not have a Material
Adverse Effect on the CIPET Parties. There are no material
pending claims against such insurance by CIPET as to which
insurers are defending under reservation of rights or have
denied liability, and there exists no material claim under such
insurance that has not been properly filed by CIPET.
4.13 CONTRACTS AND COMMITMENTS.
(a) As used in this Agreement, the term "CIPET
Contract" means any material contract, agreement, promissory
note, debt instrument, or legally binding commitment,
arrangement, undertaking or understanding to which CIPET is a
party or by which it is bound or to which it or its property is
subject, whether written or oral and including without
limitation each and every amendment, modification or supplement
thereto.
(b) CIPET is in compliance in all respects with
all terms of the CIPET Contracts, except for noncompliance
which individually or in the aggregate would not have a
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Material Adverse Effect on the CIPET Parties. Except as set
forth on Schedule 3.13(b), to the knowledge of CIPET, (i) there
is no bankruptcy, insolvency or similar proceeding with respect
to any party to a CIPET Contract having any material executory
obligations thereunder; (ii) all such CIPET Contracts are valid
and binding, are in full force and effect and are enforceable
in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization and other laws affecting
the rights of creditors generally; and (iii) no event has
occurred and is continuing which alone or in combination with
any other event would constitute a default under any such CIPET
Contract by any party thereto which, individually or in the
aggregate with other such events, would have a Material Adverse
Effect on the CIPET Parties.
4.14 ABSENCE OF CERTAIN CHANGES OR EVENTS.
(a) Since March 31, 1996, there has been no material
adverse change in the financial condition or business of CIPET
taken as a whole.
(b) Except as disclosed in Schedule 4.14(b), or in
any other Schedule hereto, and except for the transactions
contemplated by this Agreement, since March 31, 1996 CIPET has
conducted its business only in the ordinary course and
consistent with past practice.
(c) Except as disclosed in Schedule 4.14(c), from
March 31, 1996 through the date hereof, CIPET has:
(i) neither changed nor amended its Estatutos
Sociales or similar charter documents;
(ii) not issued, sold or granted options, warrants or
rights to purchase or subscribed to, or entered into any
agreement or contract with respect to the issuance or sale
of, any capital stock of CIPET or rights or obligations
convertible into or exchangeable for any shares of capital
stock of CIPET and not altered the terms of any presently
outstanding options or made any changes (by split-up,
combination, reorganization or otherwise) in the capital
structure of CIPET;
(iii) not declared, paid or set aside for payment
any dividend or other distribution in respect of the
capital stock or other equity securities of CIPET and not
redeemed, purchased or otherwise acquired any shares of
capital stock or other securities of CIPET or rights or
obligations convertible into or exchangeable for any
shares of capital stock or other securities of CIPET or
obligations convertible into such, or any options,
warrants or other rights to purchase or subscribe to any
of the foregoing;
(iv) not merged or consolidated with any other person
or acquired or entered into an agreement to acquire stock
or assets, of any business or entity in an amount in
excess of U.S. $50,000;
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(v) not (A) created, incurred or assumed any long-
term indebtedness, letters of credit or similar
obligations (including obligations in respect of capital
leases which individually or in the aggregate involve
annual payments in excess of U.S. $50,000) in excess of
U.S. $50,000 or, except in the ordinary course of business
under existing lines of credit, created, incurred or
assumed any short-term debt for borrowed money, (B)
assumed, guaranteed, endorsed or otherwise become liable
or responsible (whether directly, contingently or
otherwise) for the obligations of any other person other
than CIPET in excess of U.S. $50,000 (except in the
ordinary course of business and consistent with past
practice), (C) made any loans or advances to any other
person in excess of U.S. $50,000, except in the ordinary
course of business and consistent with past practice, or
(D) made capital expenditures not reflected in CIPET's
current business plan involving in excess of U.S.$50,000
in the aggregate;
(vi) not granted any increase in the compensation of
officers, directors or employees, whether now or hereafter
payable (except for employee compensation increases in the
ordinary course of business and consistent with past
practice);
(vii) not sold or otherwise disposed of in any
transaction or related series of transactions assets
having a value greater than U.S. $100,000 in the
aggregate;
(viii) not waived any material claims or rights
except in the ordinary course of business;
(ix) not entered into any agreement involving
payments annually in excess of U.S. $50,000 or in the
aggregate in excess of U.S. $150,000, except in the
ordinary course of business; and
(x) not entered into any transaction with KO or any
of its subsidiaries which is not in the ordinary course of
business and on arms' length terms;
(xi) not commenced, defended or settled any
litigation or arbitration in which the aggregate amount
involved is in excess of U.S. $50,000;
(xii) not assumed or incurred any lien or similar
encumbrance on any of its assets in an amount in excess of
U.S. $50,000 in the aggregate;
(xiii) not made any material change in its
accounting principles, methods or practices or
amortization policies or rates; or
(xiv) not entered into any binding agreement to
do any of the foregoing.
4.15 COMPLIANCE WITH LAW. Except for failures to comply
which would not individually or in the aggregate have a
Material Adverse Effect on the CIPET Parties, CIPET is
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not and has not been (by virtue of any action, omission to act,
contract to which it is a party or any occurrence or state of
facts whatsoever) in violation of any applicable laws,
ordinances, regulations, orders or decrees or any other
requirement of any governmental agency or court of law binding
upon it, or relating to its properties, employees or business,
or its advertising, sales or pricing practices.
4.16 TAX MATTERS.
(a) Except as set forth in Schedule 4.16; (i) all
returns with respect to Taxes, including estimated returns and
reports of every kind, which are due to have been filed by
CIPET in accordance with any applicable law, have been duly
filed, except where failure to file does not and will not
individually or in the aggregate have a Material Adverse Effect
on the CIPET Parties; (ii) all Taxes for which CIPET may have
any liability through the date hereof, have been paid in full
or are to the extent required by U.S. GAAP accrued as
liabilities for Taxes on the books and records of CIPET, except
where the failure to do so would not have a Material Adverse
Effect on the CIPET Parties; (iii) the amounts so paid on or
before the date hereof, together with any amounts accrued as
liabilities for Taxes (whether accrued as currently payable or
deferred Taxes) on the books of CIPET and reflected in the
Audited CIPET Financial Statements will be adequate to satisfy
all material liabilities for Taxes of CIPET in any jurisdiction
through March 31, 1996, including Taxes accruable upon income
earned through March 31, 1996; (iv) there are not now any
extensions of time in effect with respect to the dates on which
any returns or reports of Taxes on the part of CIPET were or
are due to be filed, except where such extensions would not
have a Material Adverse Effect on the CIPET Parties; (v) all
deficiencies asserted as a result of any examination of any
return or report of Taxes on the part of CIPET have been paid
in full, accrued on the books of CIPET, or finally settled, and
no issue has been raised in any such examination which, by
application of the same or similar principles, reasonably could
be expected to result in a proposed deficiency for any other
period not so examined; (vi) no claims have been asserted and,
to the knowledge of CIPET no proposals or deficiencies for any
Taxes on the part of CIPET are being asserted, proposed or
threatened, and no audit or investigation of any return or
report of Taxes on the part of CIPET is currently underway,
pending or, to the knowledge of TCCC Argentina threatened,
except such as will not individually or in the aggregate have a
Material Adverse Effect on the CIPET Parties; (vii) to the
knowledge of CIPET all returns or reports of Taxes on the part
of CIPET due to have been examined by all relevant tax
authorities have either been examined by all relevant tax
authorities or the taxable years therefor have been closed by
operation of law; and (viii) there are no equivalents under
local law of U.S. style outstanding waivers or agreements by
CIPET for the extension of time for the assessment of any Taxes
on the part of CIPET or deficiency thereof, nor any equivalents
thereof under applicable local law, nor are there any requests
for rulings, outstanding subpoenas or requests for information,
notices of proposed reassessment of any property owned or
leased by CIPET or any other matter outside the ordinary course
of business pending between CIPET and any taxing authority,
except such as would not have a Material Adverse Effect on the
CIPET Parties.
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(b) In each case, adequate provision, including
provision in the deferred tax account, has been made in the
Audited CIPET Financial Statements for all material deferred
and accrued liabilities for Taxes of CIPET as of their
respective dates with respect to operations for periods ending
on such dates.
4.17 STATUS AS A FOREIGN ISSUER; NO SIGNIFICANT U.S.
PRESENCE.
(a) CIPET (i) is not incorporated in the United
States, (ii) is not organized under the laws of the United
States and (iii) does not have its principal offices located in
the United States.
(b) The acquisition of voting securities of CIPET
would not confer on the acquiring person control of (i) assets
(other than investment assets) located in the United States
having an aggregate book value or market value of
U.S.$15,000,000 or more or (ii) sales in or into the United
States of U.S. $25,000,000 or more during the fiscal year ended
December 31, 1995.
4.18 INVESTMENT INTENT. TCCC Argentina has been advised
that the Acquired Andina Shares have not been registered under
the Securities Act or the securities laws of any other
jurisdiction. TCCC Argentina is acquiring the Acquired Andina
Shares through SPC for investment only and not with a view to
any public distribution thereof, and TCCC Argentina will not
offer to sell or otherwise dispose of the Acquired Andina
Shares in violation of any of the registration requirements of
the Securities Act or the securities laws of any other
jurisdiction.
4.19 SALE OF BLOWING MOLDS. Prior to the date hereof,
TCCC Argentina has transferred to CIPET all REFPET blowing
molds currently owned by TCCC Argentina as reflected on the
balance sheet of TCCC Argentina.
4.20 INVENTORY. Substantially all of the inventories of
CIPET included on the March 31, 1996 unaudited balance sheet of
CIPET referred to in Section 4.4 which have not been disposed
of prior to the Closing conform to acceptable KO standards and
are either useable in the ordinary course of CIPET's business
or are of a quality that would permit substantially all of such
inventories to be sold at prices reasonably approximate to the
market prices for such inventories as prevailing on the date of
this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF CITICORP AND SPC
Citicorp and SPC hereby jointly and severally represent
and warrant to Andina, the Majority Shareholders, Atlantico,
KO, Interamerican and TCCC Argentina as follows:
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5.1 POWER AND AUTHORITY; ENFORCEABILITY. Each of
Citicorp and SPC has all requisite power and authority to
execute and deliver this Agreement and the other Operative
Agreements to which it is a party and to perform its
obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and the other
Operative Agreements to which it is a party by Citicorp and
SPC, and the consummation by each of them of the transactions
contemplated hereby and thereby have been duly authorized by
all required corporate action. Each of this Agreement and the
other Operative Agreements to which it is a party has been duly
executed and delivered by each of Citicorp and SPC and
constitutes the legal, valid and binding obligation of Citicorp
and SPC enforceable against each of them in accordance with its
terms, in each case subject to applicable bankruptcy,
insolvency, reorganization and other laws affecting the rights
of creditors generally.
5.2 ORGANIZATION. Citicorp is a banking corporation duly
organized and validly existing under the laws of Delaware
U.S.A. SPC is a Cayman Islands corporation duly organized and
validly existing under the laws of the Cayman Islands. SPC was
formed on June 3, 1996. SPC has no assets and, except for the
execution and delivery of this Agreement and the other
Operative Agreements, SPC has not engaged in any activity,
conducted any business, entered into any agreement or otherwise
incurred any liabilities or obligations.
5.3 CAPITAL STOCK. The authorized and outstanding
capital stock of SPC consists of 50,000 shares of capital
stock, U.S.$ 1.00 par value per share. All of such outstanding
shares of capital stock are validly issued, fully paid and
nonassessable and owned of record and beneficially by Citicorp.
No such shares have been issued in violation of, or will be
subject to, any preemptive or any subscription rights. Neither
Citicorp nor SPC has outstanding, and neither is bound by, any
subscriptions, options, preemptive rights, warrants, calls,
commitments, agreements, or rights of any character obligating
Citicorp or SPC to issue or sell any additional shares of SPC
capital stock or any other equity security of SPC, including
any right of conversion or exchange under any outstanding
security or other instrument. There are no outstanding
obligations of Citicorp or SPC to repurchase, redeem or
otherwise acquire any outstanding shares of capital stock of
SPC. The transfer and delivery of the SPC Stock by Citicorp to
Interamerican and TCCC Argentina as contemplated by this
Agreement will transfer good and valid title to the SPC Stock,
free and clear of all liens, security interests, encumbrances,
claims, charges and restrictions (other than any such liens,
security interests, encumbrances, claims, charges and
restrictions that may arise from the act of Interamerican or
TCCC Argentina). The transfer and delivery of the INTI Shares
and CIPET Shares by Citicorp to Atlantico as contemplated by
this Agreement will transfer good and valid title to the CIPET
Shares and INTI Shares, free and clear of all liens, security
interests, encumbrances, claims, charges and restrictions
(other than any such liens, security interests, encumbrances,
claims, charges and restrictions that may arise from the act of
Atlantico). Except for this Agreement, there are no
agreements, arrangements, warrants, options, puts, calls,
rights or other legally binding commitments of any character
relating to the issuance, sale, purchase, redemption,
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conversion, exchange, registration, voting or transfer of any
shares of capital stock or other securities of SPC.
5.4 NO CONFLICT. The execution, delivery and performance
by Citicorp and SPC of this Agreement and the other Operative
Agreements to which it is a party or of any other documents to
be executed and delivered by Citicorp and SPC pursuant to this
Agreement or the other Operative Agreements, the consummation
by Citicorp and SPC of the transactions contemplated hereby
and thereby, and the fulfillment of and compliance with the
terms and conditions hereof and thereof do not and will not
(i) violate or conflict with any of the provisions of the
charter or bylaws of Citicorp or SPC, (ii) violate, conflict
with or result in a breach or default under or cause the
termination, modification or acceleration of any term or
condition of any mortgage, indenture, contract, license,
permit, instrument or other agreement, document or instrument
to which Citicorp or SPC is a party or by which Citicorp or SPC
or any of their respective properties may be bound,
(iii) violate any provision of applicable laws or regulations
by which Citicorp or SPC or any of their respective properties
may be bound or violate any order, judgment, decree or ruling
of any governmental or arbitral authority or court of law
applicable to Citicorp or SPC or their respective assets,
(iv) result in the creation or imposition of any lien, claim,
charge, restriction, security interest or encumbrance of any
kind upon any asset of Citicorp or SPC or (v) require the
approval, authorization or act of, or the making by Citicorp or
SPC of any declaration, filing or registration with, any
federal, state or local authority.
ARTICLE 6
CERTAIN COVENANTS AND AGREEMENTS
6.1 INSPECTION AND ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Between the date of this Agreement and the
Closing, each party hereto (other than Citicorp) will provide
each other party and its accountants, counsel and other
authorized representatives access, during reasonable business
hours and under reasonable circumstances to any and all of its
premises, properties, contracts, commitments, books, records
and other information (including tax returns filed and those in
preparation) and will cause its respective officers to furnish
to the other party and its authorized representatives any and
all financial, technical and operating date and other
information pertaining to its business, as each other party
shall from time to time reasonably request.
(b) The parties hereto shall, and shall cause their
authorized representatives to, hold in strict confidence, and
not disclose to any person, or use in any manner except in
connection with the transactions contemplated under this
Agreement, all information obtained from any other party hereto
in connection with the transactions contemplated hereby, except
that such information may be disclosed (i) where necessary as
required by law to any regulatory authorities or governmental
agencies, (ii) if required by court order or decree or
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applicable law, (iii) if it is ascertainable or obtained from
public or published information, (iv) if it is received from a
third party not known to the recipient to be under an
obligation to keep such information confidential, (v) if it is
or becomes known to the public other than through disclosure by
the recipient or (vi) if the recipient can demonstrate that it
was in its possession prior to disclosure thereof in connection
with this Agreement.
6.2 FURTHER ASSURANCES. Subject to the other provisions
of this Agreement, the parties hereto shall each use their
reasonable, good faith efforts to perform their obligations
herein and to take, or cause to be taken, or do, or cause to be
done, all things necessary, proper or advisable under
applicable law to obtain all approvals and satisfy all
conditions to the obligations of the parties under this
Agreement and the other Operative Agreements and to cause the
Closing to be effected on or prior to December 2, 1996 in
accordance with the terms hereof and shall cooperate fully with
each other and their respective officers, directors, employees,
agents, counsel, accountants and other designees in connection
with any steps required to be taken as part of their respective
obligations under this Agreement and the other Operative
Agreements.
6.3 PUBLIC ANNOUNCEMENTS. Without the prior written
consent of the other parties hereto, each party agrees that it
will not make any public announcement concerning the
transactions contemplated by this Agreement or the other
Operative Agreements, provided that any party may make such
public announcement if it is advised by counsel that such
public announcement is required by law or the rules of any U.S.
or Chilean national securities exchange or is otherwise legally
advisable in light of the prior disclosure practice of such
party. Each party hereto will discuss any public announcements
concerning the transactions contemplated by this Agreement and
the other Operative Agreements with the other parties hereto
prior to making such announcements.
6.4 TAX COVENANTS. Andina and Atlantico hereby covenant
and agree to the following:
(a) Andina and Atlantico covenant that they will
continue to operate CIPET's and INTI's historic businesses of
being a PET manufacturer and a bottler of soft drink products,
respectively, for at least two years after the Closing. In
this regard, CIPET and INTI, without limitation, may add
additional lines of business and may dispose of some of the
assets of their historic businesses so long as they retain
sufficient assets to continue the historic businesses.
(b) Andina and Atlantico covenant that, with respect
to any Transaction (as hereinafter defined), set forth below,
they:
(i) as of the Closing Date, will not have a current
understanding with another party to carry out any such
Transaction;
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(ii) as of the Closing Date, will not be under any
legal obligation to carry out any such Transaction;
(iii) will not carry out any such Transaction or
permit CIPET or INTI to carry out any such Transaction for
a period of two years after the Closing; and
(iv) will not enter into any legally enforceable
obligation to carry out any such Transaction or permit
CIPET or INTI to enter into any such obligation for a
period of two years after the Closing.
(c) Andina and Atlantico covenant that, as of the
date hereof and at the time of the Closing, Andina will own
sufficient capital stock of Atlantico to constitute control.
(d) For purposes of this Section 6.4, the following
definitions shall apply:
(i) "control" means the direct ownership by one
entity of at least eighty percent (80%) of the total
combined voting power of all classes of stock entitled to
vote and at least eighty percent (80%) of the total number
of shares of all other classes of stock of the
corporation.
(ii) "Transaction" means (A) the liquidation of CIPET
or INTI; (B) the merger of CIPET or INTI into another
corporation, unless Atlantico controls the surviving
entity; (C) the sale or other disposition by CIPET or INTI
of their assets, such that CIPET or INTI will no longer
possess sufficient assets to continue to conduct their
historic businesses (as described in Section 6.4(a)); (D)
except as permitted pursuant to Section 368(a)(2)(C) of
the Internal Revenue Code of 1986, as amended, the
disposition of a sufficient amount of the stock of CIPET
or INTI to cause Atlantico to lose control of CIPET or
INTI; (E) the issuance by CIPET or INTI of additional
shares of capital stock such that Atlantico no longer
controls CIPET or INTI; (F) any other transaction that
would result in the loss of control by Atlantico of the
stock of CIPET or INTI; and (G) any transaction that would
result in the loss of control by Andina of the stock of
Atlantico.
(e) The parties agree that a transaction (other than
a transaction relating to matters described in Section
6.4(b)(ii)) occurring at least seven years after the Closing
Date shall not be subject to the covenants set forth in this
Section 6.4.
6.5 REORGANIZATION OF CICAN. Promptly following the date
of this Agreement, TCCC Argentina, the Majority Shareholders
and Andina will use their reasonable efforts to have by
December 1, 1996 a definitive agreement to implement a
reorganization of CICAN S.A. ("CICAN") prior to January 1, 1997
which would result in certain bottlers (including Andina's
bottling subsidiaries) in KO's River Plate Division
participating in the ownership of CICAN. If a definitive
agreement relating to a reorganization of CICAN involving such
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bottlers is not entered into by January 1, 1997, then subject
to the approval of the Boards of Directors of KO and TCCC
Argentina, TCCC Argentina will enter into an agreement with
Andina by means of which (i) TCCC Argentina will sell to
Andina's current bottling subsidiaries in the River Plate
Division (the "Bottling Subsidiaries") at a value equal to
CICAN's net worth, a percentage equity interest in CICAN which
is proportionate to the percentage of the unit can volume of
Coca-Cola products in the River Plate Division represented by
sales of the Bottling Subsidiaries during the twelve calendar
months preceding the date of such agreement (for purposes of
reference, the parties acknowledge that, based upon unit can
volume in the River Plate Division during the preceding twelve
months, the Bottling Subsidiaries would purchase approximately
14% of CICAN); (ii) CICAN will enter, upon such investment by
the Bottling Subsidiaries, into a Supply Agreement effective
January 1, 1997 pursuant to which it will agree to supply cans
to the Bottling Subsidiaries at CICAN's cost (plus any excise
taxes, value added taxes or other applicable taxes pursuant to
Argentine tax law). For this purpose, cost is defined as the
total cash and non cash expenses incurred by CICAN in a given
month (plus any excise taxes, value added taxes or other
applicable taxes pursuant to Argentine tax law) plus the
interest expenses, if any; and (iii) Andina will receive as its
sole return for the equity investment referred to in (i) the
right to be supplied by CICAN on the terms and conditions of
the Supply Agreement referred to in (ii) without being entitled
to profits, dividends or any other return derived from CICAN's
ongoing operations. If arriving to a structure which
accomplishes (i), (ii) and (iii) proves not to be feasible,
then the parties will work together towards finding an
alternative mechanism which delivers the economic objectives
sought by Andina, KO and TCCC Argentina. TCCC Argentina's
undertaking to sell CICAN cans to the Bottling Subsidiaries at
cost, as described above, is limited to 14% of CICAN sales
(assuming Andina acquires 14% of CICAN's net worth). In the
event that the Bottling Subsidiaries' needs exceed, at a given
time, 14% of CICAN sales (or whatever is the applicable
percentage), TCCC Argentina and Andina will agree to adjust to
the new business reality through a mechanism with the same
economic objectives as the one described above. Nothing in
this Agreement or in any subsequent agreements between KO or
TCCC Argentina and Andina affects or will affect the right of
TCCC Argentina to establish the pricing formula of the
concentrate and beverage bases for the products packaged by
CICAN in cans. The pricing formulae of the concentrate and
beverage bases sold to CICAN will be the same that TCCC
Argentina currently applies or may apply in the future to the
Bottling Subsidiaries.
6.6 SPIRIT OF THE TRANSACTIONS.
(a) The transactions contemplated by this Agreement
and the other Operative Agreements, which will result in an
equity investment by KO in Andina through TCCC Argentina and
Interamerican (after their acquisition of SPC), are intended to
establish a new and expanded relationship that both KO and
Andina believe has the potential to enhance the growth and
profitability of Andina as well as the potential to afford KO
and the Majority Shareholders the opportunity to participate in
the future growth in the region through Andina. In light of
this new and expanded relationship, KO will give full
consideration to the possibility of financing future growth
through increased equity participation, to the extent that
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reinvestment of Andina's profits and prudent incurrence of debt
prove insufficient to satisfy the capital expenditure needs of
Andina, and Andina and the Majority Shareholders will look
favorably upon KO's desire to have an investment not
significantly in excess of twenty percent (20%) of the equity
of Andina.
(b) KO views the current control of the management
of Andina by the Majority Shareholders as an important factor
in KO's willingness to enter into the transactions contemplated
by this Agreement, and the parties understand the importance to
KO, the Majority Shareholders and Andina of the control by the
Majority Shareholders of the management of Andina.
Accordingly, to the extent practicable and appropriate at such
time and under the circumstances, if KO increases its
participation in Andina capital stock in the future, the
parties intend to structure such increased investment in a
manner that maintains the Majority Shareholders' current
ability to elect a majority of the Andina Board of Directors.
The parties recognize that the structure of any transaction is
necessarily dependent on the facts and circumstances that may
exist at such time and that the foregoing sentence is not
intended to be a commitment on the part of any party.
6.7 ACCOUNTING FOR OPERATING RESULTS. From and after
August 28, 1996, Andina agrees that it will for all purposes
record on its financial statements the operating results of
INTI or CIPET.
6.8 SPC COVENANTS. Citicorp and SPC agree that, prior to
the Closing, except as otherwise specifically contemplated by
this Agreement, SPC will not engage in any activity, conduct
any business, enter into any agreement or otherwise incur any
liabilities or obligations.
6.9 COVENANTS IN ANDINA PURCHASE AGREEMENT. The
covenants and agreements set forth in Article 4 of the Andina
Purchase Agreement are incorporated herein by reference with
the same effect as if fully set forth herein (and any reference
to Citicorp or SPC in such incorporated covenants and
agreements shall also for purposes of this Agreement be deemed
to be a reference to KO, TCCC Argentina and Interamerican), and
KO, Interamerican and TCCC Argentina are entitled to rely on
such covenants and agreements as if fully set forth herein.
6.10 RIGHTS OF CITICORP AND SPC UNDER ANDINA PURCHASE
AGREEMENT. Citicorp and SPC agree with KO, Interamerican and
TCCC Argentina that Citicorp and SPC:
(a) will not amend, modify or terminate the Andina
Purchase Agreement or exercise any right under the Andina
Purchase Agreement without the written consent of KO;
(b) will follow the instructions of KO with respect
to the exercise of any right or waiver of rights or conditions
under the Andina Purchase Agreement; and
(c) at the Closing will assign all of their rights
under the Andina Purchase Agreement to KO, Interamerican and
TCCC Argentina.
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6.11 ANDINA BOARD OF DIRECTORS. Andina shall take all
necessary actions to effect the election to the Board of
Directors at or prior to Closing of one incumbent member and
one alternate member, each of whom is a nominee of the KO
Parties.
ARTICLE 7
MANAGEMENT OF INTI AND CIPET BY ANDINA AND ATLANTICO
7.1 MANAGEMENT AUTHORITY AND RESPONSIBILITY.
(a) From and after the date of this Agreement,
unless this Agreement is terminated in accordance with
Article 11 hereof, Andina and Atlantico shall be fully
responsible for the supervision, management and operation of
the businesses of INTI and CIPET, and Andina shall be
responsible for the following, among other matters, in
connection with the operation of such businesses:
(i) Financial planning and management, including the
preparation of capital and operating budgets for INTI and
CIPET;
(ii) Marketing and consulting services, including
management of advertising functions;
(iii) Production planning and management,
including management of purchasing functions;
(iv) Pricing planning and management;
(v) Industrial engineering services required by the
businesses of INTI and CIPET;
(vi) Technical services related to the businesses of
INTI and CIPET; and
(vii) Accounting and bookkeeping services, cost
analysis and reporting.
(b) As soon as practicable after the date hereof,
the existing directors of INTI and CIPET shall be replaced by
persons nominated by Andina.
7.2 RIGHT OF ACCESS. Interamerican and TCCC Argentina
and their officers, directors, employees and representatives
shall have complete and unrestricted access, at all times
prior to the Closing, to the offices and other facilities
of INTI and CIPET and to the books and records of INTI
and CIPET. In addition, Interamerican and TCCC Argentina
and their respective officers, directors, employees and
representatives shall have access prior to the
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Closing, during reasonable business hours, to the employees
of Andina and Atlantico exercising supervision over the
management and operations of INTI and CIPET.
7.3 REPORTS. Prior to the Closing, Andina shall provide,
not less frequently than monthly, written reports to
Interamerican and TCCC Argentina concerning the results of
operations of INTI and CIPET in substantially the form
currently provided to Interamerican and TCCC Argentina. Such
reports shall be delivered by Andina to Interamerican and TCCC
Argentina not later than twenty-five (25) days after the end
of each respective month of operations prior to the Closing and
shall include consolidated financial statements, including
balance sheet, income statement, statement of changes in
financial position, comparison of current operating results to
budget and to prior period results, and unit sales and
production reports. In addition, prior to Closing, Andina
shall provide notice to Interamerican and TCCC Argentina within
four business days of its occurrence of any significant
development affecting the business or assets of INTI or CIPET,
including matters affecting labor relations or any of their
relationships with customers or suppliers, claims of any nature
made or threatened against INTI or CIPET, or any basis for any
such claim or liability, and the like.
7.4 NO COMPENSATION; EXPENSES Andina and Atlantico shall
not receive any compensation for any services provided in
connection with the exercise of its authority and
responsibility under this Article 7. Andina and Atlantico
shall be responsible for all expenses incurred by it or any of
the Andina Subsidiaries or any of their respective officers,
directors, employees, or representatives in connection with the
exercise of its authority and responsibility under this Article 7.
7.5 EFFECT OF TERMINATION OF THIS AGREEMENT. In addition
to any other remedies available to KO, Interamerican, INTI,
TCCC Argentina or CIPET under this Agreement or otherwise, if
this Agreement is terminated pursuant to Article 11 hereof and
the transactions contemplated herein are not consummated,
Andina and Atlantico shall take all actions necessary to effect
the orderly return of the supervision, management and operation
of the businesses of INTI and CIPET to Interamerican and TCCC
Argentina, respectively, so that the businesses of INTI and
CIPET are in all material respects in the same condition as
when the supervision, management and operation of such
businesses were transferred to Andina and Atlantico, after
taking into account changes reasonably attributable to
seasonality and the operation of such business in the ordinary
course and in a manner consistent with past practices. Subject
to the foregoing sentence, such actions shall include, but
shall not be limited to, the following:
(a) Restoring to INTI and CIPET the levels of assets
and liabilities (both in terms of aggregate dollar amounts and
composition of assets and liabilities) as existed at INTI and
CIPET at the time that Andina and Atlantico assumed
responsibility for the supervision, management and operation of
the businesses of INTI and CIPET;
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(b) Restoring to INTI and CIPET substantially the
same customer bases as existed at INTI and CIPET at the time
that Andina and Atlantico assumed responsibility for the
supervision, management and operation of the businesses of INTI
and CIPET;
(c) Restoring to INTI and CIPET substantially the
same employee bases as existed at INTI and CIPET at the time
that Andina and Atlantico assumed responsibility for the
supervision, management and operation of the businesses of INTI
and CIPET;
(d) Restoring to INTI and CIPET substantially the
same revenue bases, profit margins and pricing structures (both
in terms of aggregate dollar amounts and composition) as
existed at INTI and CIPET, at the time that Andina and
Atlantico assumed responsibility for the supervision,
management and operation of the businesses of INTI and CIPET;
and
(e) Causing the persons nominated by Andina as
directors of INTI and CIPET pursuant to Section 7.1(b) to
resign as directors of such entities immediately upon the
termination of this Agreement.
ARTICLE 8
CONDITIONS
8.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The
respective obligations of each party to effect the Closing
shall be subject to the fulfillment at or prior to the Closing
of the following conditions:
(a) All consents, authorizations, orders and
approvals of (or filings or registrations with) any
governmental commission, board or other regulatory body
required in connection with the transactions contemplated to be
consummated at the Closing shall have been obtained or made,
except for filing of any documents required to be filed after
the Closing Date.
(b) All of the conditions to the "Closing" as
defined in the Andina Purchase Agreement shall have been
satisfied or waived and the "Closing" under the Andina Purchase
Agreement shall have occurred simultaneously with the Closing
under this Agreement.
8.2 CONDITIONS TO OBLIGATIONS OF THE INTI PARTIES AND THE
CIPET PARTIES. The obligations of the INTI Parties and the
CIPET Parties to effect the Closing shall be subject to the
satisfaction on or prior to the Closing of all of the following
conditions, except such conditions as the INTI Parties and the
CIPET Parties may waive in writing:
(a) No preliminary or permanent injunction
or other order, judgment, writ or decree by any court
or other governmental authority or agency shall have
been issued and shall remain in effect, and there shall
not be any statute, rule, regulation or order enacted,
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promulgated or issued after the date of this Agreement by any
governmental authority or agency which in any case would (i)
prohibit or restrain the INTI Parties, the CIPET Parties or the
Andina Parties from consummating, or make illegal, the transactions
contemplated under this Agreement to be consummated at the Closing
or impair Interamerican's or TCCC Argentina's ownership of the
Acquired Andina Shares or compel Interamerican or TCCC Argentina
to dispose of all or a material portion of the Acquired Andina
Shares, or (ii) render any INTI Party or CIPET Party unable to
consummate the transactions contemplated hereby to be
consummated at the Closing. No suit, investigation, action,
lawsuit or other proceeding shall have been commenced or
threatened for the purpose of obtaining any such order, writ,
injunction, decree or judgment which would have any of the
effects set forth in subparts (i) or (ii) above.
(b) The Amendments shall have been approved by the
shareholders of Andina in accordance with the requirements of
applicable Chilean laws and regulations.
(c) The Estatutos Sociales of Andina shall have been
amended to reflect the Amendments and duly filed with the SVS
in accordance with the requirements of applicable Chilean laws
and regulations.
(d) The Class A Stock of Andina (the "Class A
Stock") of Andina and the Class B Stock of Andina (the "Class B
Stock") to be created pursuant to the Amendments shall have
been duly registered by Andina with the SVS in accordance with
the requirements of applicable Chilean laws and regulations but
shall not have been issued until after the issuance of the
Acquired Andina Shares and after Andina has taken all necessary
actions to effect the reclassification (the "Reclassification")
of the existing Common Stock of Andina such that each share of
Common Stock will become one share of Class A Stock and one
share of Class B Stock.
(e) Andina shall have taken all necessary action to
ensure that the Class B Stock issuable upon conversion of the
Class A Stock shall have been duly authorized and reserved for
issuance by Andina.
(f) The president or chief executive officer of each
of the Andina Parties shall deliver to KO, Interamerican, TCCC
Argentina, Citicorp and SPC a written certificate to the effect
that the representations and warranties set forth in Sections
2.1, 2.2, 2.3 and 2.4 of this Agreement and in Sections 2.1,
2.2(a), 2.2(b), 2.2(c), 2.3, 2.6 and 2.17 of the Andina
Purchase Agreement are true and correct in all material
respects at and as of the Closing Date, as if made on such date
and to the further effect that:
(i) the shareholders of Andina have duly approved
the Amendments by the necessary vote, and that immediately
after the issuance of the Acquired Andina Shares, the
Amendments will be duly adopted and will be in full force
and effect; and
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(ii) the Majority Shareholders have validly assigned
to SPC all preemptive rights necessary to permit SPC to
subscribe to the Acquired Andina Shares.
8.3 CONDITIONS TO OBLIGATIONS OF ANDINA PARTIES. The
obligations of the Andina Parties to effect the Closing shall
be subject to the satisfaction on or prior to the Closing Date
of the following conditions, unless the Andina Parties have
waived such conditions in writing:
(a) No preliminary or permanent injunction or other
order, judgment, writ or decree by any court or other
governmental authority or agency shall have been issued and
shall remain in effect, and there shall not be any statute,
rule, regulation or order enacted, promulgated or issued after
the date of this Agreement by any governmental authority or
agency, which in any case would (i) prohibit or restrain any
Andina Party, INTI Party or CIPET Party from consummating, or
make illegal, the transactions contemplated under this
Agreement to be consummated at the Closing or impair Andina's
ownership of the CIPET Shares or the INTI Shares or compel
Andina to dispose of all or a material portion of the CIPET
Shares or the INTI Shares, or (ii) render any Andina Party
unable to consummate the transactions contemplated hereby to be
consummated at the Closing. No suit, investigation, action,
lawsuit or other proceeding shall have been commenced or
threatened for the purpose of obtaining any such order, writ,
injunction, decree or judgment, which would have any of the
effects set forth in subpart (i) or (ii) above.
(b) A senior officer of Interamerican and TCCC
Argentina shall deliver to the Andina Parties a written
certificate to the effect that the representations and
warranties set forth in Sections 3.1, 3.2, 3.3, 3.6, 3.17,
3.18, 4.1, 4.2, 4.3, 4.6, 4.17 and 4.18 are true and correct in
all material respects at and as of the Closing Date, as if made
on such date.
8.4 NO OTHER CONDITIONS; EFFECT OF CERTAIN BREACHES.
None of the obligations of any party to this Agreement shall be
subject to any conditions other than those conditions set forth
in this Article 8. Except as set forth in Sections 8.2, 8.3
and 11.1, no breach of the representations, warranties,
covenants or agreements contained in this Agreement or any of
the other Operative Agreements shall affect the obligations of
the parties hereto to consummate the transactions contemplated
by this Agreement; provided, however, that this sentence shall
not affect any other rights, liabilities, duties or obligations
of any of the parties hereto arising under this Agreement or
any other Operative Agreement as a result of such breach.
ARTICLE 9
ACTIONS REQUIRED AT CLOSING
Unless this Agreement is first terminated as provided in
Article 11, and subject to the satisfaction or waiver of the
conditions set forth herein, the closing of the purchase and
sale of the CIPET Shares, the INTI Shares, the CIPET Debt and
the SPC Stock (the "Closing") shall take place at the offices of
Andina, Avenida Andres Bello No. 2687, Piso 20, Santiago, Chile, at
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10:00 a.m., local time, on December 2, 1996, or such other
time, date and/or place as the parties hereto may agree
(the "Closing Date") at which the following actions, including
without limitation, shall take place:
9.1 SHARE CERTIFICATES OF CIPET. TCCC Argentina shall
(a) deliver to Citicorp certificates in definitive
form representing the CIPET Shares; (b) deliver to CIPET a
letter substantially in the form of Exhibit 9.1 notifying the
transfer of the CIPET Shares to Citicorp pursuant to Article
215 of Law No. 19,550 of the laws of Argentina; and (c) procure
CIPET to enter the name of Citicorp in the register of
shareholders of CIPET as the registered holder of the CIPET
Shares. In addition, at the Closing, TCCC Argentina shall
cause Juan Manuel Almiron to (x) deliver to the nominee of
Citicorp (the "Citicorp Nominee") the one share of Class B
Stock of CIPET owned of record by him (the "Nominee Share") and
the written consent to such transfer signed by the spouse of
Mr. Almiron, (y) deliver a letter substantially in the form of
Exhibit 9.1 signed by Mr. Almiron and his spouse notifying the
transfer of the Nominee Share to the Citicorp Nominee pursuant
to Article 215 of Law No. 19,500 of the laws of Argentina, and
(z) procure CIPET to enter the name of the Citicorp Nominee in
the register of shareholders of CIPET as the registered holder
of the Nominee Share.
9.2 SHARE CERTIFICATES OF SPC TO TCCC ARGENTINA.
Citicorp shall (a) deliver to TCCC Argentina certificates in
definitive form representing the TCCC Argentina Acquired SPC
Shares, in a form effective under Cayman Islands law, duly
endorsed in blank for transfer or accompanied by duly executed
blank stock powers, and otherwise in good form for transfer,
and (b) procure SPC to enter the name of TCCC Argentina in the
register of shareholders of SPC as the registered holder of the
TCCC Argentina Acquired SPC Shares.
9.3 SHARE CERTIFICATES OF INTI; ASSIGNMENT OF CIPET DEBT.
Interamerican shall (a) deliver to Citicorp certificates in
definitive form representing the INTI Shares; (b) deliver to
INTI a letter substantially in the form of Exhibit 9.1
notifying the transfer of the INTI Shares to Citicorp pursuant
to Article 215 of Law No. 19,550 of the laws of Argentina; and
(c) procure INTI to enter the name of Citicorp in the register
of shareholders of INTI as the registered holder of the INTI
Shares. In addition, at Closing Interamerican shall assign the
CIPET Debt to Citicorp and shall notify CIPET of such
assignment.
9.4 SHARE CERTIFICATES OF SPC TO INTERAMERICAN. Citicorp
shall (a) deliver to Interamerican certificates in definitive
form representing the Interamerican Acquired SPC Shares, in a
form effective under Cayman Islands law, duly endorsed in blank
for transfer or accompanied by duly executed blank stock
powers, and otherwise in good form for transfer, and (b)
procure SPC to enter the name of Interamerican in the register
of shareholders of SPC as the registered holder of the
Interamerican Acquired SPC Shares.
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9.5 SHARE CERTIFICATES OF CIPET AND INTI; CIPET DEBT.
(a) Citicorp shall (i) deliver to Atlantico
certificates in definitive form representing the CIPET Shares;
(ii) deliver to CIPET a letter substantially in the form of
Exhibit 9.1 notifying the transfer of the CIPET Shares to
Atlantico pursuant to Article 215 of Law No. 19,550 of the laws
of Argentina; and (iii) procure CIPET to enter the name of
Atlantico in the register of shareholders of CIPET as the
registered holder of the CIPET Shares. In addition, at the
Closing, Citicorp shall cause the Citicorp Nominee to (x)
deliver to the nominee of Atlantico (the "Atlantico Nominee")
the Nominee Share and, if applicable, the written consent to
such transfer signed by the spouse of the Citicorp Nominee, (y)
deliver a letter substantially in the form of Exhibit 9.1
signed by the Citicorp Nominee and, if applicable, his or her
spouse, notifying the transfer of the Nominee Share to the
Atlantico Nominee pursuant to Article 215 of Law No. 19,500 of
the laws of Argentina, and (z) procure CIPET to enter the name
of the Atlantico Nominee in the register of shareholders of
CIPET as the registered holder of the Nominee Share.
(b) Citicorp shall (i) deliver to Atlantico
certificates in definitive form representing the INTI Shares;
(ii) deliver to INTI a letter substantially in the form of
Exhibit 9.1 notifying the transfer of the INTI Shares to
Atlantico pursuant to Article 215 of Law No. 19,500 of the laws
of Argentina; and (iii) procure INTI to enter the name of
Atlantico in the register of shareholders of INTI as the
registered holder of the INTI Shares.
(c) Citicorp shall assign the CIPET Debt to
Atlantico and shall notify CIPET of such assignment.
9.6 PURCHASE PRICE. Atlantico shall tender to Citicorp
the Aggregate Purchase Price by wire transfer of immediately
available funds to an account reasonably designated by
Citicorp, which account shall be designated at least five days
prior to the Closing.
9.7 FURTHER ASSURANCES. Following the Closing, each
party transferring INTI Shares, CIPET Shares, CIPET Debt or SPC
Stock pursuant to this Agreement shall take such actions which
were required by this Agreement to be taken at or prior to the
Closing but which were not taken, as may be requested by the
transferee to confirm and vest in such transferee title to such
shares or debt, as the case may be.
ARTICLE 10
INDEMNIFICATION
10.1 SURVIVAL. The representations and warranties of the
parties hereto contained herein or in any certificate or other
document delivered pursuant hereto shall not survive the
Closing Date, except that the representations and warranties
contained in Sections 3.20 and 4.20 shall survive until the
date which is four months after the date of this Agreement and
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(x) the representations and warranties contained in
Sections 2.1, 2.2, 2.3, 2.4, 3.1, 3.2, 3.3, 3.6, 3.17, 3.18,
4.1, 4.2, 4.3, 4.6, 4.17, 4.18, 5.1, 5.2, 5.3 and 5.4 of this
Agreement, (y) the representations and warranties set forth in
Sections 2.1, 2.2(a), 2.2(b), 2.2(c), 2.3, 2.6 and 2.17 of the
Andina Purchase Agreement which are incorporated by reference
pursuant to Section 2.5 of this Agreement, and (z) the
representations and warranties contained in the certificates
delivered pursuant to Sections 8.2(f) and 8.3(b) shall survive
the Closing Date without limitation as to time. The covenants,
agreements and obligations contained in this Agreement shall
not survive the Closing Date, except that (x) the covenants and
agreements set forth in Article 1, Sections 6.1(b), 6.3, 6.4,
6.5, 6.8, 6.10 and 9.7, this Article 10 and Article 12 shall
survive the Closing Date without limitation as to time, (y) the
covenants and agreements set forth in Article 1,
Sections 4.2(b), 4.8 and 6.3, Article 7 and Article 9 of the
Andina Purchase Agreement which are incorporated by reference
pursuant to Section 6.9 of this Agreement shall survive the
Closing Date without limitation as to time, and (z) the
covenants and agreements set forth in Section 6.11 of this
Agreement and the covenants and agreements set forth in Section
4.6 of the Andina Purchase Agreement which are incorporated by
reference pursuant to Section 6.9 of this Agreement shall
survive the Closing Date until one month after the completion
of the Preemptive Rights Offering and the Reclassification.
Any claim for indemnification under this Article 10 must be
made in writing within the applicable survival period. Each of
the parties hereto acknowledges that (a) it is a sophisticated
institution capable of evaluating the risks inherent in the
transactions contemplated hereby, and (b) it and its counsel
have been afforded an adequate opportunity to conduct, and have
in fact conducted, a due diligence investigation with respect
to each of the transactions contemplated hereby to the extent
they consider appropriate.
10.2 INDEMNIFICATION BY ANDINA PARTIES.
(a) Except as otherwise limited by this Article 10
and subject to the limitations on survival set forth in Section
10.1, the Andina Parties, jointly and severally (except as
otherwise provided in this Agreement), shall indemnify and hold
harmless KO, TCCC Argentina and Interamerican, their respective
officers, directors, shareholders (direct and indirect,
including KO), employees, agents and representatives and their
successors and permitted assigns (each, an "Indemnified KO
Party") and Citicorp and SPC, their respective officers,
directors, shareholders (direct and indirect), employees,
agents and representatives and their successors and permitted
assigns (each, an "Indemnified SPC Party") against and in
respect of:
(i) if this Agreement is terminated prior to
the Closing, any and all claims, losses, liabilities,
damages and reasonable costs and expenses directly or
indirectly suffered or incurred or disbursed by any
Indemnified KO Party or any Indemnified SPC Party as
a result of, or with respect to, any breach of or
noncompliance by any Andina Party with any
representation, warranty, covenant or agreement of
any Andina Party contained in this Agreement;
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(ii) if the Closing occurs, any and all claims,
losses, liabilities, damages and reasonable costs and
expenses directly or indirectly suffered or incurred
or disbursed by any Indemnified KO Party or any
Indemnified SPC Party as a result of, or with respect
to, any breach of or noncompliance by any Andina
Party with any representation, warranty, covenant or
agreement of any Andina Party contained in this
Agreement which, pursuant to Section 10.1 hereof, is
stated to survive the Closing Date; and
(iii) any and all actions, suits, claims,
proceedings, investigations, audits, penalties,
fines, judgments, reasonable costs (including court
costs) and other expenses (including, without
limitation, reasonable legal and accounting fees and
expenses) incident to any of the foregoing.
(b) Any amounts owed to any Indemnified KO Party or
Indemnified SPC Party as a result of a breach of a
representation, warranty, covenant or agreement set forth in
(x) Article 1, Section 2.1, 2.2, 2.3, 6.8, 6.10 or 9.7 or in
the certificate delivered pursuant to Section 8.2(f) or (y)
Article 1 or Sections 2.1, 2.2(a), 2.2(b), 2.2(c), 2.3, 2.6,
2.17 or 6.3 of the Andina Purchase Agreement which are
incorporated by reference herein (in the case of each of (x)
and (y) other than amounts owed to any Indemnified KO Party or
Indemnified SPC Party if this Agreement or the Andina Purchase
Agreement is terminated prior to the Closing) shall be
satisfied by transfer by the Majority Shareholders to such
Indemnified KO Party or Indemnified SPC Party of shares of
Common Stock (or, after the Reclassification, equal numbers of
shares of Class A Stock and Class B Stock) equal in value to
the amount of any indemnification payment which is owed to such
Indemnified SPC Party.
(c) Any amounts owed to any Indemnified KO Party or
Indemnified SPC Party (x) as a result of a breach of a
representation, warranty, covenant or agreement set forth in
this Agreement or incorporated by reference in this Agreement
if this Agreement or the Andina Purchase Agreement is
terminated prior to the Closing or (y) as a result of a breach
of a representation, warranty, covenant or agreement set forth
in (A) Sections 2.4, 6.1(b), 6.3, 6.4, 6.5, 6.11 or Article 12
of this Agreement, or (B) Section 4.2(b), 4.6 or 4.8 or Article
9 of the Andina Purchase Agreement which are incorporated by
reference herein shall not be required to be satisfied in
stock, but shall instead be satisfied by the direct assertion
against the Andina Parties of such indemnification claims to be
satisfied out of the assets or cash of the Andina Parties.
(d) A breach of the covenants contained in
Section 6.4 of this Agreement shall give rise to an
indemnification obligation pursuant to this Section 10.2 only
in the event that such breach is determined to have directly
caused the failure of either of the exchanges of capital stock
of CIPET or INTI pursuant to this Agreement to qualify as a
tax-free reorganization for U.S. income tax purposes. For this
purpose, the items subject to indemnification shall include,
but not be limited to, all federal, state and local tax
liabilities (including interest and penalties) arising
directly out of such breach. Any indemnification
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payment made pursuant to this Article 10 as a result of a breach
of Section 6.4 of this Agreement shall be made on an after-tax
basis in an amount sufficient to place the Indemnified KO Party
in the same after-tax economic position (after taking into account
any Taxes imposed on or by reason of the indemnification payment
and any tax benefit actually realized by an Indemnified KO Party as
a result thereof) as if the provisions contained in Section 6.4
of the Agreement had not been breached. If any Andina Party
has paid an indemnity obligation as a result of a breach of
Section 6.4 of this Agreement prior to the time an offsetting
tax benefit is "actually realized" by a KO Party as a result of
the payment, incurrence or accrual of such indemnity
obligation, such KO Party shall pay, or cause to be paid, to
such Andina Party the appropriate amount of any such offsetting
tax benefit within 60 days of the date on which the tax return
or other filing claiming the realization of such offsetting tax
benefit is filed; provided, however, that Andina shall not be
entitled to receive an amount in excess of all amounts
previously paid by Andina pursuant to this Section 10.2 as a
result of a breach of Section 6.4 of this Agreement; and
provided, further, that if there is a subsequent determination
on the part of a taxing authority that such KO Party was not
entitled to all or any part of such offsetting tax benefit,
such Andina Party shall repay, or cause to be repaid, to such
KO Party the amount of such offsetting tax benefit to which the
taxing authority has determined that the KO Party is not
entitled. For purposes of the preceding sentence, a tax
benefit shall be treated as having been "actually realized" to
the extent, and at such time as, any amount of taxes actually
paid or payable by any KO Party is reduced below the amount of
taxes that any such entity would have been required to pay
absent the utilization of such tax benefit.
10.3 INDEMNIFICATION BY KO, TCCC ARGENTINA AND
INTERAMERICAN.
(a) Except as otherwise limited by this Article 10
and subject to the limitations on survival set forth in
Section 10.1, KO, TCCC Argentina and Interamerican, jointly and
severally, shall indemnify and hold harmless the Andina
Parties, their respective officers, directors, shareholders
(direct and indirect), employees, agents and representatives
and their successors or permitted assigns (each, an
"Indemnified Andina Party") and each Indemnified SPC Party
against and in respect of:
(i) if this Agreement is terminated prior to
Closing, any and all claims, losses, liabilities, damages,
reasonable costs and expenses directly or indirectly
suffered or incurred or disbursed by any Indemnified
Andina Party or any Indemnified SPC Party as a result of,
or with respect to, any breach of or noncompliance by any
KO Party with any representation, warranty, covenant or
agreement of any KO Party contained in this Agreement;
(ii) if the Closing occurs, any and all claims,
losses, liabilities, damages and reasonable costs and
expenses directly or indirectly suffered or incurred or
disbursed by any Indemnified Andina Party or any Indemnified
SPC Party as a result of, or with respect to, any breach of
or noncompliance by any KO Party with any representation,
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warranty, covenant or agreement of any KO Party contained
in this Agreement which, pursuant to Section 10.1 hereof,
is stated to survive the Closing Date; and
(iii) any and all actions, suits, claims,
proceedings, investigations, audits, penalties, fines,
judgments, costs (including court costs) and other
expenses (including, without limitation, reasonable legal
and accounting fees and expenses) incident to any of the
foregoing.
(b) Except as otherwise limited by this Article 10
and subject to the limitations contained herein, if the Closing
occurs, KO and Interamerican, jointly and severally, shall
indemnify and hold harmless the Indemnified Andina Parties
against and in respect of 78.7% of all Indemnifiable INTI Taxes
(as defined below). The Andina Parties shall be responsible
for all other Unpaid INTI Taxes (as defined below). No claim
for indemnification may be made under this Section 10.3(b) by
the Andina Parties except with respect to any Indemnifiable
INTI Taxes for which within six years from the date of this
Agreement the relevant taxing authority has asserted a claim
and the Andina Parties have provided the KO Parties with prompt
written notice of such claim or, if such claim is asserted in
the last week of such six-year period, no later than one week
after the assertion of such claim.
(c) As used in this Agreement:
"Unpaid INTI Taxes" shall mean any income or social
security taxes of INTI which are required to be paid by INTI in
respect of any period ended prior to August 28, 1996 and which
have neither been paid nor accrued as liabilities for taxes on
the books and records of INTI.
"INTI Tax Claim Cap" shall mean the first U.S.
$6,885,000 of principal amount of claims asserted by the
relevant taxing authorities following the date of this
Agreement in respect of Unpaid INTI Taxes (i.e., whether or not
KO decides to dispute such claims or settle such claims for a
lesser amount with the relevant taxing authority, the principal
amount of each claim in respect of Unpaid INTI Taxes as
asserted by the relevant taxing authority shall be applied to
reduce the U.S. $6,885,000 cap).
"Indemnifiable INTI Taxes" shall mean the principal
amount of any claims with respect to Unpaid INTI Taxes to the
extent that the aggregate principal amount of such claims as
asserted by the relevant taxing authorities is less than or
equal to the INTI Tax Claim Cap and any penalties or interest
associated with such claims the aggregate principal amount of
which as asserted by the relevant taxing authorities is below
the INTI Tax Claim Cap. When a cumulative amount of claims has
been received from the relevant taxing authorities and the
principal amount of such claims as asserted by the relevant
taxing authorities exceeds the INTI Tax Claim Cap, with respect
to the last claim asserted which results in the INTI Tax
Claim Cap being exceeded (the "Bridge Claim"), the
term "Indemnifiable INTI Taxes" will include the
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principal amount of the Bridge Claim only to the extent of the
remaining amount of the INTI Tax Claim Cap, and, if the KO Parties
decide to defend such claim as provided in Section 10.6, the term
"Indemnifiable INTI Taxes" will include any penalties or interest
associated with the Bridge Claim. The Andina Parties will be
responsible for the principal amount of the Bridge Claim to the
extent it exceeds the remaining amount of the INTI Tax Claim Cap,
and if the KO Parties choose not to defend such claim, the Andina
Parties will be responsible for any penalties or interest
associated with the Bridge Claim.
(d) Except as otherwise limited by this Article 10
and subject to the limitations contained herein, if the Closing
occurs and there is a final determination with respect to the
Rio Cuarto Tax Dispute (as defined below) to the effect that
INTI is not entitled to a refund of all of the amounts
previously paid to the Rio Cuarto Municipality in respect of
such Rio Cuarto Tax Dispute, KO and Interamerican, jointly and
severally, shall indemnify and hold harmless the Indemnified
Andina Parties against and in respect of 78.7% of the Rio
Cuarto Amount (as defined below), provided that the aggregate,
cumulative liability of KO and Interamerican under this Section
10.3(d) shall not exceed 78.7% times U.S. $304,711.29.
(e) As used in this Agreement:
"Rio Cuarto Tax Dispute" shall mean the dispute
described in Item 1 of Schedule 3.16 to this Agreement.
"Rio Cuarto Amount" shall mean (i) the portion, if
any, of the amounts previously paid by INTI to the Rio Cuarto
Municipality in respect of the Rio Cuarto Tax Dispute with
respect to which it is finally determined that INTI is not
entitled to a refund less (ii) any amounts recovered by INTI
from other cities within the Cordoba province or otherwise in
respect of the matter described in Item 1 of Schedule 3.16 to
this Agreement.
(f) The Andina Parties agree to use their reasonable, good
faith efforts to refrain from taking any actions which could
reasonably be expected to increase the amount of Unpaid INTI Taxes or
the Rio Cuarto Amount or increase the likelihood that a taxing
authority will assert a claim with respect to Unpaid INTI Taxes or
the Rio Cuarto Amount, and the Andina Parties shall use their
reasonable, good faith efforts to take such actions as, to their
knowledge, could reasonably be expected to mitigate any such amounts
and the likelihood that a taxing authority will assert a claim with
respect to such amounts.
10.4 INDEMNIFICATION BY CITICORP AND SPC. Except as otherwise
limited by this Article 10 and subject to the limitations on survival
set forth in Section 10.1, Citicorp and SPC shall indemnify and hold
harmless the Andina Indemnified Parties and the KO Indemnified
Parties against and in respect of:
(a) any and all claims, losses, liabilities, damages,
reasonable costs and expenses directly or indirectly suffered or
incurred or disbursed by and Andina Indemnified Party or any
KO Indemnified Party as a result of, or with respect to, any
breach of or noncompliance by either Citicorp
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or SPC with any representation, warranty, covenant or agreement
of Citicorp or SPC contained in this Agreement; and
(b) any and all actions, suits, claims, proceedings,
investigations, audits, penalties, fines, judgments, costs (including
court costs) and other expenses (including, without limitation,
reasonable legal and accounting fees and expenses) incident to any of
the foregoing.
10.5 NOTICE OF CLAIM. If any Indemnified KO Party or any
Indemnified Andina Party (either, as the case may be, an "Indemnified
Party") believes that it has suffered or incurred or disbursed any
claims, losses, liabilities, damages, and reasonable costs and
expenses for which it is entitled to such indemnification
(hereinafter, collectively, a "Loss" or "Losses"), such Indemnified
Party shall promptly notify the party or parties from whom
indemnification is being claimed (the "Indemnifying Parties") and
shall provide them with sufficient information as is then available.
If any legal action or Tax Claim (as hereinafter defined) is
instituted by or against a third party with respect to which any
Indemnified Party intends to claim any Losses, such Indemnified Party
shall promptly notify the Indemnifying Parties of such action. The
failure of an Indemnified Party to give any notice required by this
Section 10.5 shall not affect any of such party's rights under this
Article 10 except to the extent such failure is actually prejudicial
to the rights or obligations of the Indemnifying Parties. The
Indemnified Party shall promptly deliver to the Indemnifying Parties
copies of all notices and documents (including court papers) received
by the Indemnified Party relating thereto. As used in this
Agreement, the term "Tax Claim" means a written assertion by the U.S.
Internal Revenue Service or other taxing authority of a proposed
adjustment to be made with respect to taxes for which an
indemnification obligation would arise hereunder.
10.6 THIRD PARTY CLAIMS. If a claim made pursuant to this
Article 10 arises out of the claim of any third party, or if there is
any claim against a third party available by virtue of the
circumstances relating thereto, the Indemnifying Parties shall have
sixty (60) days after receipt of the notice referred to in
Section 10.5 to notify the Indemnified Party that they elect to
conduct and control such action. If the Indemnifying Party does not
give the foregoing notice, the Indemnified Party shall have the right
to defend, contest, settle or compromise such action in the exercise
of its reasonable discretion, and the Indemnifying Parties shall,
upon request from the Indemnified Party, promptly pay to such
Indemnified Party, in accordance with the other terms of this
Article 10, the amount of any Losses for which indemnification is
provided hereunder provided, however, that, the Indemnifying Party
will not be subject to any liability for any settlement made without
its written consent, which consent will not be unreasonably withheld.
If the Indemnifying Parties give the foregoing notice, the
Indemnifying Parties shall have the right to undertake, conduct and
control, through counsel of their own choosing and at their sole
expense, the conduct and settlement of such action and the
Indemnified Parties shall cooperate with the Indemnifying Parties
in connection therewith; provided that, except as provided in
the last sentence of this Section 10.6, (a) the Indemnifying
Parties shall not, without the written consent of the Indemnified
Party, enter into any settlement the effect of which is to create
or impose any lien upon any of the properties or assets of such
Indemnified Party; (b) the Indemnifying Parties shall not consent
to any settlement that does not include as an unconditional term
thereof the giving of a complete release from liability with
respect to such action to the Indemnified Party; (c) the
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Indemnifying Parties shall not enter into any settlement the
effect of which is to permit any injunction, declaratory
judgment or other nonmonetary relief to be entered against
any Indemnified Party; (d) the Indemnifying Parties shall
permit the Indemnified Party to participate in such conduct or
settlement through counsel chosen by the Indemnified Party, with the
fees and expenses of such counsel borne by the Indemnified Party
unless under then applicable standards of professional conduct a
conflict of interest would exist, or be reasonably foreseeable to
arise, between the Indemnifying Parties and the Indemnified Party in
which event such fees and expenses of such counsel shall be borne by
the Indemnifying Parties, but under no circumstances shall the
Indemnifying Parties be required to pay the expenses of more than one
such separate counsel in connection with such claim; and (e) except
as otherwise provided in this Agreement, the Indemnifying Parties
shall agree promptly to reimburse the Indemnified Party for the full
amount of any Losses resulting from such action (except for expenses
borne by the Indemnified Party pursuant to clause (d) hereof)
incurred by the Indemnified Party, including reasonable fees and
expenses of counsel for the Indemnified Party. Notwithstanding the
foregoing, the KO Parties shall have complete authority over the
defense, contest, conduct, settlement and compromise of any claim,
action, suit or proceeding with respect to Indemnifiable INTI Taxes
and the Rio Cuarto Tax Dispute (including, without limitation, the
filing of moratorium regimes and payment plans), and, if they so
elect, the Bridge Claim, and the limitations set forth in the proviso
to the preceding sentence shall not apply with respect to such
claims.
ARTICLE 11
TERMINATION
11.1 TERMINATION AND ABANDONMENT. This Agreement may be
terminated at any time prior to the Closing Date, whether before or
after the Special Meeting and the Preemptive Rights Offering (as
defined in the Andina Purchase Agreement):
(a) by mutual agreement of Andina, the Majority
Shareholders, TCCC Argentina, Interamerican and KO (with notice to
Citicorp and SPC);
(b) by Andina, if the conditions set forth in Sections 9.1
and 9.3 hereof shall not have been complied with or performed and
such noncompliance or nonperformance shall not have been cured or
eliminated (or by its nature cannot be cured or eliminated) by the
INTI Parties and the CIPET Parties on or before April 30, 1997;
(c) by TCCC Argentina and Interamerican, if the conditions
set forth in Sections 9.1 and 9.2 hereof shall not have been complied
with or performed and such noncompliance or nonperformance shall not
have been cured or eliminated (or by its nature cannot be cured or
eliminated) by Andina Parties on or before April 30, 1997; and
(d) by any party, if the Andina Purchase Agreement shall
have been terminated in accordance with its terms (without any breach
of the Andina Purchase Agreement by such party).
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11.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement pursuant to this Article 11, this Agreement shall forthwith
become void and there shall be no liability on the part of any party
or its respective officers, directors or shareholders, except for
obligations under Sections 6.1(b) and 6.3, Article 7, Article 10,
this Section 11.2 and Sections 12.11 and 12.17, all of which shall
survive the termination; provided, however, that termination pursuant
to this Article 11 prior to the Closing due to a breach of any
representation, warranty, covenant or agreement contained in this
Agreement or any other Operative Agreement shall not relieve a
defaulting or breaching party from any liability to the other party
or parties hereto (whether or not such representation, warranty,
covenant or agreement would have survived the Closing Date).
ARTICLE 12
MISCELLANEOUS
12.1 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
Operative Agreements contain the entire agreement among the parties
hereto with respect to the transactions contemplated herein and
therein, and supersede all prior agreements and negotiations and oral
understandings relating to the subject matter hereof and thereof;
provided that this provision is not intended to abrogate any other
written agreement between the parties executed contemporaneously with
or after this Agreement; and provided further that neither this
Agreement nor any of the other Operative Agreements is intended to
amend or modify any of the terms or provisions of any of the
bottlers' agreements between KO and Andina or any of the subsidiaries
of Andina. In the event of any conflict or inconsistency between the
terms of this Agreement with the terms of any such bottlers'
agreements with respect to the subject matter governed by such
bottlers' agreements, the terms of such bottlers' agreements shall
control. No amendment, modification or alteration of the terms or
provisions of this Agreement shall be binding unless the same shall
be in writing and duly executed by the parties hereto.
12.2 SUCCESSORS AND ASSIGNS. This Agreement and the rights of a
party hereunder may not be assigned, and the obligations of a party
hereunder may not be delegated, in whole or in part, without the
prior written consent of all other parties hereto, except that the
rights and obligations of Interamerican and TCCC Argentina may be
assigned or delegated to KO or to any subsidiary of KO, provided that
such assignment shall not relieve the assignor of its obligations
under this Agreement. This Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors
and permitted assigns.
12.3 SCHEDULES AND EXHIBITS. This Agreement includes all
Schedules and Exhibits referred to herein and attached hereto.
12.4 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to
be an original and all of which shall constitute one and the same
instrument.
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12.5 HEADINGS. The headings of the sections and paragraphs of
this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the
interpretation hereof.
12.6 MODIFICATION AND WAIVER. Any rights arising under this
Agreement may be waived in writing at any time by the party holding
the same. No waiver of any right shall be deemed to or shall
constitute a waiver of any other rights hereunder (whether or not
similar).
12.7 NOTICES. Any notice, request, instruction or other
document to be given hereunder by any party hereto to any other party
hereto shall be in writing and delivered personally or by telecopy
transmission or sent by registered or certified mail or by any
express mail service, postage and fees prepaid:
if to Andina or Embotelladora Andina S.A.
to Atlantico: Avenida Andres Bello No. 2687 Piso 20
Casilla 7187
Santiago, Chile
Attention: Chief Executive Officer
Telefax No.: 562/338/0510
with a copy to: Embotelladora Andina S.A.
Avenida Andres Bello No. 2687 Piso 20
Casilla 7187
Santiago, Chile
Attention: General Counsel
Telefax No.: 562/338/0570
if to the Majority Inversiones Freire Ltda.
Shareholders: Inversiones Freire Dos Ltda.
c/o Portaluppi, Guzman y Bezanilla
Huerfanos 863 Piso 9
Santiago, Chile
Attention: Eugenio Guzman
Telefax No.: 562/638/3934
if to KO, Interamerican
or TCCC Argentina: The Coca-Cola Company
One Coca-Cola Plaza, N.W.
Atlanta, Georgia 30313
Attention: Chief Financial Officer
Telefax No.: (404) 676-8683
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with a copy to: The Coca-Cola Company
One Coca-Cola Plaza, N.W.
Atlanta, Georgia 30313
Attention: General Counsel
Telefax No.: (404) 676-6209
if to Citicorp: Citicorp Banking Corporation
Avenida Andres Bello No. 2687 Piso 7
Casilla 7187
Santiago, Chile
Attention: General Legal Counsel
Telefax No.: 562/338/8138
if to SPC prior to Bottling Investment Limited
the Closing Date: Avenida Andres Bello No. 2687 Piso 7
Casilla 7187
Santiago, Chile
Attention: General Legal Counsel
Telefax No.: 562/338/8138
or at such other address or number for a party as shall be specified
by like notice. Any notice which is delivered personally or by
telecopy transmission or by mail in the manner provided herein shall
be deemed to have been duly given to the party to whom it is directed
upon actual receipt by such party.
12.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, UNITED STATES OF AMERICA, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
12.9 CONSTRUCTION. No provision of this Agreement or other
Operative Agreement shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental
authority by reason of such party's having or being deemed to have
structured or drafted such provision.
12.10 SPECIFIC PERFORMANCE. The parties agree that
irreparable damage would occur if any of the provisions of this
Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to equitable relief, including in the form
of injunctions, in order to enforce specifically the provisions of
this Agreement, in addition to any other remedy to which they are
entitled at law or in equity.
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12.11 CONSENT TO JURISDICTION, ETC.
(a) Each of the parties hereby irrevocably consents and
agrees that any action, suit or proceeding arising in connection with
any disagreement, dispute, controversy or claim arising out of or
relating to this Agreement or any of the other Operative Agreements
(for purposes of this Section, a "Legal Dispute") may be brought to
the non-exclusive jurisdiction of the United States District Court
for the Southern District of New York, New York, United States of
America or, in the event (but only in the event) such court does not
have subject matter jurisdiction over such action, suit or
proceeding, in the courts of the State of New York sitting in the
City of New York, New York, United States of America.
(b) Each of the parties hereby waives, and agrees not to
assert, as a defense in any action, suit or proceeding referred to in
Section 12.11(a), that it is not subject thereto or that such action,
suit or proceeding may not be brought or is not maintainable in such
court or that its property is exempt or immune from execution, that
the action, suit or proceeding is brought in an inconvenient forum or
that the venue of the action, suit or proceeding is improper. Each
of the Andina Parties hereby irrevocably appoints CT Corporation
System (the "Agent for Service") as its agent to receive on its
behalf service of copies of the summons and complaint and any other
process which may be served in any such action, suit or proceeding.
Such service may be made by mailing or delivering a copy of such
process to such Andina Party in care of the Agent for Service at the
address of the Agent for Service in the State of New York, United
States of America, and each Andina Party hereby irrevocably
authorizes and directs the Agent for Service to accept such service
on its behalf.
(c) Each party hereto agrees that a final judgment in any
action, suit or proceeding described in this Section 12.11 after the
expiration of any period permitted for appeal and subject to any stay
during appeal shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided
by law.
12.12 TRANSLATIONS. This Agreement has been executed, and
all amendments, supplements, modifications or replacements hereto
shall be made, in the English language. This Agreement may be
translated into the Spanish language for convenience of one or more
of the parties hereto, provided that in case of discrepancies the
English version shall prevail in all cases.
12.13 NO THIRD-PARTY BENEFICIARIES. Except as otherwise
specifically provided herein, nothing in this Agreement is intended
to confer upon any person other than the parties thereto any rights
or remedies.
12.14 "INCLUDING". Words of inclusion shall not be
construed as terms of limitation herein, so that references to
"included" matters shall be regarded as non-exclusive, non-
characterizing illustrations.
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12.15 REFERENCES. Whenever reference is made in this
Agreement to any Article, Section, Schedule or Exhibit, such
reference shall be deemed to apply to the specified Article or
Section of this Agreement or the specified Schedule or Exhibit to
this Agreement.
12.16 MATERIAL ADVERSE EFFECT. As used in this Agreement,
the term "Material Adverse Effect" means (a) when used with reference
to any of the Andina Parties, a material adverse effect on (i) the
financial condition or business of Andina and the Andina
Subsidiaries, taken as a whole or (ii) the ability of Andina, the
Majority Shareholders, Atlantico or any other Andina Subsidiary to
consummate the transactions contemplated by this Agreement; (b) when
used with reference to any of the CIPET Parties, a material adverse
effect on (i) the financial condition or business of CIPET, taken as
a whole or (ii) the ability of TCCC Argentina to consummate the
transactions contemplated by this Agreement; (c) when used with
reference to any of the INTI Parties, a material adverse effect on
(i) the financial condition or business of INTI, taken as a whole or
(ii) the ability of Interamerican to consummate the transactions
contemplated by this Agreement; and (d) when used with reference to
Citicorp or SPC, a material adverse effect on the ability of Citicorp
or SPC to consummate the transactions contemplated by this Agreement.
12.17 EXPENSES. Except as otherwise agreed herein or in any
other agreement between the parties entered into on or subsequent to
the date hereof, each party hereto shall pay all costs and expenses
incurred by such party or its subsidiaries or affiliates or on its or
their behalf in connection with this Agreement and the transactions
contemplated hereby, including any stock transfer taxes, recording
fees or other similar taxes, any brokerage fees, commissions or
finder's fees, and any fees and expenses of its or their own
financial consultants, accountants and counsel.
12.18 EXCHANGE RATE. To the extent that any amount
specified herein in a particular currency is paid in another country
in the currency of that country, the amount paid shall be converted
into the specified currency at the average of the conversion rates
for such currencies as announced by Citicorp, N.A., New York, New
York. For purposes hereof, the "conversion rate" shall be the
average of the buy and sell conversion rates for commercial
transactions at the end of the business day prior to the business day
on which such amount is paid.
12.19 SEVERABILITY. The invalidity or unenforceability of
any provision hereof in any jurisdiction will not affect the validity
or enforceability of the remainder hereof in that jurisdiction or the
validity or enforceability of this Agreement, including that
provision, in any other jurisdiction. To the extent permitted by
applicable law, each party waives any provision of law that renders
any provision hereof prohibited or unenforceable in any respect. If
any provision of this Agreement is held to be unenforceable for any
reason, it shall be adjusted rather than voided, if possible, in
order to achieve the intent of the parties to the extent possible.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed by their duly authorized representatives on
the date first above written.
EMBOTELLADORA ANDINA S.A.
By: /s/ Jose Said S.
Name: Jose Said S.
Title: Chairman of the Board
By: /s/ Jose Antonio Garces
Name: Jose Antonio Garces
Title: Director
INVERSIONES DEL ATLANTICO S.A.
By: /s/ Jaime Garcia
/s/ Pedro Pellegrini
Name: Jaime Garcia/Pedro Pellegrini
Title: Attorneys-in-fact
INVERSIONES FREIRE LTDA.
By: /s/ Jose Said S.
Name: Jose Said S.
Title: Attorney-in-fact
By: /s/ Jose Antonio Garces
Name: Jose Antonio Garces
Title: Attorney-in-fact
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INVERSIONES FREIRE DOS LTDA.
By: /s/ Jose Said S.
Name: Jose Said S.
Title: Attorney-in-fact
By: /s/ Jose Antonio Garces
Name: Jose Antonio Garces
Title: Attorney-in-fact
THE COCA-COLA COMPANY
By: /s/ Weldon H. Johnson
Name: Weldon H. Johnson
Title: Senior Vice President
COCA-COLA INTERAMERICAN
CORPORATION
By: /s/ Weldon H. Johnson
Name: Weldon H. Johnson
Title: Vice President
COCA-COLA DE ARGENTINA S.A.
By: /s/ Fernando Marin
Name: Fernando Marin
Title: Attorney-in-fact
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CITICORP BANKING CORPORATION
By: /s/ Diego Peralta V.
Name: Diego Peralta V.
Title: Authorized Officer
BOTTLING INVESTMENT LIMITED
By: /s/ Diego Peralta V.
Name: Diego Peralta V.
Title: Chairman of the Board
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EXHIBIT 99.4
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT (this "Agreement") is made and
entered into as of this 5th day of September, 1996, by and among
EMBOTELLADORA ANDINA S.A., a corporation organized under the laws
of Chile ("Andina"), THE COCA-COLA COMPANY, a corporation
organized under the laws of Delaware, U.S.A. ("KO"), COCA-COLA
INTERAMERICAN CORPORATION, a corporation organized under the laws
of Delaware, U.S.A. ("Interamerican"), COCA-COLA DE ARGENTINA
S.A., a corporation organized under the laws of Argentina ("TCCC
Argentina"), BOTTLING INVESTMENT LIMITED, a corporation organized
under the laws of the Cayman Islands ("SPC"), INVERSIONES FREIRE
LTDA., a limited liability company organized under the laws of
Chile ("Freire One"), and INVERSIONES FREIRE DOS LTDA., a limited
liability company organized under the laws of Chile ("Freire
Two," and together with Freire One, the "Majority Shareholders")
(KO, Interamerican and TCCC Argentina (and upon the Closing Date,
SPC) are hereinafter referred to as the "KO Shareholders"; and
the KO Shareholders and the Majority Shareholders are hereinafter
collectively referred to as the "Shareholders" and each
individually as a "Shareholder").
W I T N E S S E T H:
WHEREAS, pursuant to a Stock Purchase Agreement dated of
even date herewith (the "Andina Purchase Agreement"), SPC will
acquire from Andina, upon the terms and conditions set forth in
the Andina Purchase Agreement, 24,000,000 newly issued shares of
Common Stock of Andina which, after giving effect to the
Amendments (as defined in the Andina Purchase Agreement), shall
be reclassified as 24,000,000 shares of Class A Stock and
24,000,000 shares of Class B Stock (each as hereinafter defined)
representing more than 6% of the outstanding shares of capital
stock of Andina (such shares, together with any shares of capital
stock or securities or other options or rights convertible into
or exchangeable for any shares of such capital stock, or American
Depository Shares or other instruments representing such shares
of such capital stock, are hereinafter referred to as the
"Acquired Shares");
WHEREAS, pursuant to a Stock Purchase Agreement dated of
even date herewith (the "SPC Purchase Agreement"), Interamerican
and TCCC Argentina will acquire from Citicorp Banking Corporation
all of the outstanding shares of capital stock of SPC;
WHEREAS, the Majority Shareholders currently own 200,001,969
shares of Common Stock of Andina which, after giving effect to
the Amendments, shall be reclassified as 200,001,969 shares of
Class A Stock and 200,001,969 shares of Class B Stock representing
in the aggregate approximately 50.61% of the outstanding shares of
capital stock of Andina (such shares, together with any shares of
capital stock or securities or other options or rights
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convertible into or exchangeable for any shares of such capital
stock, or American Depository Shares or other instruments representing
such shares of such capital stock, are hereinafter referred to as
the "Majority Shareholder Shares");
WHEREAS, the equity investment by KO in Andina through
Interamerican and TCCC Argentina is intended to establish a new
and expanded relationship that the Majority Shareholders and KO
believe has the potential to enhance the growth and profitability
of Andina as well as the potential to afford KO and the Majority
Shareholders the opportunity to participate in the future growth
in the region through Andina; and
WHEREAS, the parties hereto have determined it to be
advisable and in their best interests to (i) provide for certain
restrictions on the transfer of the Shares (as defined in Article
2) and (ii) provide for certain other matters.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
ARTICLE 1
EFFECTIVE DATE; TERMINATION
1.1 EFFECTIVE DATE. This Agreement shall become effective
on the Closing Date.
1.2 TERMINATION.
(a) The rights and obligations of the parties to this
Agreement shall terminate if either of the Purchase Agreements is
terminated prior to the Closing Date or if any of the KO
Shareholders voluntarily Transfers Shares in a sale to a Person
other than KO or a subsidiary of KO, and, as a result of such
sale, during the 30 days following such sale KO and its
subsidiaries own less than (i) if the reclassification
contemplated by the Amendments has not occurred or if following
such reclassification an event occurs with the result that only
Common Stock of Andina is outstanding, 15.66 million shares of
Common Stock of Andina, or (ii) if such reclassification has
occurred and Class A Stock continues to be outstanding, 15.66
million shares of Class A Stock.
(b) The rights and obligations of the parties under
Sections 3.1, 3.2, 3.3 and 3.4 of this Agreement and under
Article 4 of this Agreement shall terminate if both (i) the
Majority Shareholders notify the KO Shareholders in writing that
the ownership level of Andina stock held by KO and its
subsidiaries has fallen below (x) 4% of the outstanding Common
Stock if the reclassification contemplated by the Amendments has
not occurred or if following such reclassification an event
occurs with the result that only Common Stock of Andina is
outstanding, or (y) 4% of the Class A Stock if such reclassifi-
cation has occurred and Class A Stock continues to be outstanding,
and (ii) within one year following the receipt of such written
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notice KO and its subsidiaries fail to restore their ownership of
Andina stock to at least such applicable 4% level.
ARTICLE 2
CERTAIN DEFINITIONS
For purposes of this Agreement, the following capitalized
terms shall have the following meanings:
"Bona Fide Offer" shall mean a written offer which the
offeree wishes to accept setting forth the bona fide intention of
the Person delivering such writing to purchase for cash all or
part of the Shares by the offeree and stating in reasonable
detail the cash consideration to be paid therefor and the other
material terms and conditions of such offer. Any Bona Fide Offer
shall be accompanied by a statement of the source of funds to be
utilized in the transaction by the Person making the offer,
including (where applicable) a commitment letter from an
appropriate financial institution in form reasonably acceptable
to the parties.
"Brokers Transactions" shall mean brokers' transactions on
any exchange or in any over-the-counter market, including
brokers' transactions within the meaning of Rule 144 under the
Securities Act.
"Business Day" shall mean any day other than a day on which
commercial banks in the cities of Atlanta or New York in the
United States of America or in the city of Santiago, Chile, are
required or authorized by law to be closed.
"Class A Stock" shall mean the Class A Stock of Andina
(reflecting the reclassification of the existing Common Stock of
Andina after giving effect to the Amendments), each share of
which is convertible, at the option of the holder, into one share
of Class B Stock.
"Class B Stock" shall mean the Class B Stock of Andina
(reflecting the reclassification of the existing Common Stock of
Andina after giving effect to the Amendments).
"Closing Date" shall mean the Closing Date of the
transactions contemplated by the Purchase Agreements.
"KO Parties" shall mean KO, Interamerican, TCCC Argentina
and any and all KO Permitted Transferees and upon the Closing
Date shall include SPC.
"Market Value" (as calculated on a per share basis) shall
mean the quotient of the average closing price of the Common
Stock or Class B Stock of Andina, as reported on the Santiago
Stock Exchange ("Bolsa de Comerciode Santiago") for the twelve
month period ended on the trading date immediately prior to the
date the notice by the KO Shareholders exercising the put right
provided in Section 5.1 is delivered.
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"Majority Shareholder Partners" shall mean the current
beneficial owners of the Majority Shareholders as of the date of
this Agreement, which are the persons listed on Exhibit 2.1 to
this Agreement.
"Majority Shareholder Partner Group" shall mean:
(a) any of the Majority Shareholder Partners;
(b) any of the spouses of the Majority Shareholder
Partners;
(c) any of the lineal descendants (whether natural or
adopted) of any of the Majority Shareholder
Partners;
(d) any individual who, in circumstances where the
transferor at the time of his death did not have a
spouse or any lineal descendants, receives shares
of the Majority Shareholders by intestacy from (i)
a Majority Shareholder Partner, (ii) a lineal
descendant (whether natural or adopted) of any of
the Majority Shareholder Partners, or (iii) a
person who has previously received shares of the
Majority Shareholders by intestacy as described
inthis paragraph (d);
(e) any Wholly Owned Subsidiary of any of the
foregoing; and
(f) any trust formed for the benefit of any of the
Persons listed in clauses (a), (b), (c) or (d) if
one or more Persons listed in clauses (a), (b),
(c) or (d) retains full voting and investment
power over the assets of such trust.
"Person" shall mean a natural person, partnership,
corporation, trust or other legal entity.
"Public Offering" shall mean a widely distributed
underwritten public offering of securities pursuant to an
effective registration statement under the Securities Act or
pursuant to an exemption from the registration requirements
thereof.
"Purchase Agreements" shall mean the Andina Purchase
Agreement and the SPC Purchase Agreement.
"Put Event" shall mean (i) the sale of all or substantially
all of the assets of Andina or (ii) any merger, consolidation,
share exchange, business combination or similar transaction
involving Andina as a result of which Andina is not the surviving
entity or any reorganization involving any third party in which
Andina is not the surviving entity.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Shares" means any shares of capital stock of Andina, any
securities or other options or rights convertible into or
exchangeable for any shares of capital stock of Andina, or any
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American Depository Shares or other instruments representing
shares of capital stock of Andina, whether or not issued or
outstanding on the date hereof; provided that the term "Shares"
shall not include any shares of Class B Stock or any American
Depository Shares or other instruments representing shares of
Class B Stock so long as shares of Class B Stock do not have
voting power which is in any material respect greater than the
voting power provided to the Class B Stock in the Amendments.
"Transfer" shall mean any direct or indirect sale,
assignment, transfer, pledge, usufructus, hypothecation or
deposit into a voting trust of the securities in question.
"Wholly Owned Subsidiary" of a Person shall mean a
corporation, entity or other Person all of the securities of
which (other than directors' qualifying shares or similar shares)
are owned, directly or indirectly, by such Person.
ARTICLE 3
MANAGEMENT
3.1 BOARD OF DIRECTORS. The Shareholders agree that the
Board of Directors of Andina shall at all times consist of not
more than twelve incumbent members and twelve alternate members.
The KO Shareholders shall be entitled to nominate one incumbent
member and one alternate member to the Board of Directors of
Andina.
3.2 ELECTION OF DIRECTORS. At every annual meeting and at
any special meeting of Shareholders hereafter called for the
purpose of electing a director or directors of Andina, the KO
Shareholders shall vote all of their Shares in favor of the
election of the nominee for director designated by the KO
Shareholders as provided in this Article 3 (and his or her
alternate), and the Majority Shareholders shall vote such number
of Shares owned, directly or indirectly, by them as may be
necessary (after taking into account the Shares voted by the KO
Shareholders) to cause the election of such KO nominee (and his
or her alternate).
3.3 VACANCIES. In the event of any vacancy on the Board of
Directors occasioned by the death, incapacity, resignation or
removal of a director nominated by the KO Shareholders, each
Shareholder will vote or cause to be voted all Shares which the
Shareholder owns to fill such vacancy with the nominee designated
by the KO Shareholders. The Shareholders will take all such
action as may be necessary to promptly fill such vacancy,
including the calling of a shareholders' meeting.
3.4 REMOVAL OF DIRECTORS. If the KO Shareholders, in their
sole discretion, determine to remove a director which the KO
Shareholders had previously so nominated and so notify the other
Shareholder in writing, each Shareholder agrees promptly to vote
or cause to be voted all Shares which the Shareholder owns in
favor of the removal of such director.
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3.5 MANAGEMENT OF ANDINA; BOARD OF DIRECTORS ACTION.
(a) The day-to-day administration of Andina's business
and affairs shall be conducted by Andina's current management
structure under the direction, control and supervision of the
Board of Directors of Andina in accordance with the Estatutos
Sociales of Andina. Except to the extent otherwise required
under the Chilean Companies Act or other applicable Chilean law,
no action of the Board of Directors shall require a supermajority
vote of the members of the Board of Directors.
(b) The Shareholders acknowledge that the Estatutos
Sociales of Andina provide for certain notice, quorum and voting
requirements for action of the Board of Directors of Andina and
agree not to take any action inconsistent with such provisions.
3.6 SHAREHOLDER MEETINGS. The Shareholders acknowledge
that the Estatutos Sociales provide for certain notice, quorum
and voting requirements at ordinary and extraordinary
shareholders' meetings and agree not to take any action
inconsistent with such provisions.
3.7 CODE OF BUSINESS CONDUCT. The Majority Shareholders
agree (i) that Andina and its subsidiaries shall have in effect
at all times a Code of Business Conduct in substantially the form
of Exhibit 3.7 and (ii) to cause Andina to take appropriate
action to assure that the Code of Business Conduct is adequately
communicated to management and all employees of Andina and its
subsidiaries.
3.8 ENVIRONMENTAL MATTERS. The Majority Shareholders agree
that:
(a) the operations of Andina and its subsidiaries will
be conducted:
(i) in compliance in all material respects with
the requirements of all applicable
environmental laws, regulations, statutes,
ordinances and permit conditions
("Environmental Laws");
(ii) in accordance in all material respects with
all "Good Environmental Practices" as
published by the Environmental Assurance
Department of KO; and
(iii) in a reasonable manner such that the
risk of material liability to governmental
entities and/or third parties arising from
environmental matters is minimized.
(b) In fulfilling the intent of this Section 3.8, the
responsibility for environmental compliance will be assigned to
an individual in the management of Andina, whose duties shall
include conducting regular environmental audits of all production
facilities. In addition, Andina's General Manager shall notify
the Board of Directors of Andina of any material exceptions to
environmental compliance and ensure that all required corrective
actions are initiated and completed as soon as possible.
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ARTICLE 4
RESTRICTIONS ON TRANSFER
4.1 TRANSFER RESTRICTIONS GENERALLY.
(a) The rights of the KO Shareholders and the Majority
Shareholders to Transfer any Shares are restricted as provided in
this Article 4, and no Transfer of Shares by any of the KO
Shareholders or the Majority Shareholders may be effected except
in compliance with this Article 4. Any attempted or actual
Transfer in violation of this Agreement shall, to the full extent
permitted under applicable Chilean laws or regulations, be of no
effect and null and void.
(b) Without complying with the provisions of this
Article 4, the KO Shareholders may make Transfers of Shares to KO
or to any Wholly Owned Subsidiary of KO (a "KO Permitted
Transferee"); provided, however, that (i) any Shares Transferred
to any KO Permitted Transferee hereunder shall remain subject to
the provisions of this Agreement, and (ii) such KO Permitted
Transferee shall agree in writing to be bound by the provisions
of this Agreement. Prior to such time as any KO Permitted
Transferee holding any Shares shall cease to be a Wholly Owned
Subsidiary of KO, such KO Permitted Transferee shall Transfer all
Shares then owned by it to the KO Shareholders or to another KO
Permitted Transferee. The restrictions set forth in this Article
4 shall terminate upon the occurrence of a Put Event or (x) a
change in the direct or indirect ownership of the outstanding
voting power or equity interests of any of the Majority
Shareholders as a result of which the Majority Shareholder
Partner Group owns collectively less than 75% of the outstanding
voting power or less than 75% of the outstanding equity interests
of any of the Majority Shareholders, or (y) a change in the
ownership of the outstanding voting power or equity interests of
Andina as a result of which the Majority Shareholders and the
Majority Shareholder Permitted Transferees (as defined Section
4.1(c)) own collectively less than 50.1% of the outstanding
voting power or less than 25% of the outstanding equity interests
of Andina.
(c) Without complying with the provisions of this
Article 4, the Majority Shareholders may make Transfers of Shares
to any Wholly Owned Subsidiary of a Majority Shareholder (a
"Majority Shareholder Permitted Transferee"); provided, however,
that (i) any Shares Transferred to a Majority Shareholder
Permitted Transferee hereunder shall remain subject to the
provisions of this Agreement and (ii) such Majority Shareholder
Permitted Transferee shall agree in writing to be bound by the
provisions of this Agreement. Prior to such time as any Majority
Shareholder Permitted Transferee holding any Shares shall cease
to be a Wholly Owned Subsidiary of a Majority Shareholder, such
Majority Shareholder Permitted Transferee shall Transfer all
Shares then owned by it to the Majority Shareholders or to
another Majority Shareholder Permitted Transferee.
4.2 RESTRICTIONS ON TRANSFER BY KO SHAREHOLDERS. Prior to
the third anniversary of the date hereof, the KO Shareholders
will not, directly or indirectly, Transfer any Shares other than
(a) in accordance with the provisions of Sections 4.1(b) or 5.1
of this Agreement, (b) in connection with any merger,
consolidation, recapitalization, reclassification or other
similar transaction involving Andina or (c) in connection
with a tender offer or an exchange offer of
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shares of capital stock of Andina made by Andina or approved
and recommended by the Board of Directors of Andina.
4.3 RIGHT OF FIRST REFUSAL.
(a) Except as set forth in Section 4.1(b), 4.1(c) or
4.3(e) of this Agreement, if any Shareholder (the "Transferring
Shareholder") receives a Bona Fide Offer from a third party to
sell all or any portion of the Shares held by the Transferring
Shareholder (the "Offered Shares") in a transaction not subject
to Section 4.4 hereof, then the Transferring Shareholder shall
give notice (the "Notice") of such Bona Fide Offer to purchase
the Offered Shares to the other Shareholders (the "Non-
Transferring Shareholders"). Such Notice shall contain a copy of
the third party's offer and set forth in reasonable detail the
terms of the proposed purchase, including: (i) the number of
Shares proposed to be Transferred, (ii) the name and address of
the proposed purchaser, (iii) the proposed amount and type of
consideration, and terms and conditions of payment for such
Shares and (iv) that the proposed purchaser has been informed of
the rights provided to the Shareholders in this Section 4.3. No
Transfer may be made hereunder for a consideration other than
cash.
(b) Upon receipt of the Notice, the Non-Transferring
Shareholders shall have the right, for a period of 60 days
following the date such Notice is received (or if the KO
Shareholders are the Non-Transferring Shareholders, until 15 days
after the first meeting of the KO Board of Directors which is
held at least 30 days after the date on which the KO Shareholders
receive the Notice) (as the case may be, the "Refusal Election
Period"), to notify the Transferring Shareholder in writing of
the election to purchase all (but not less than all) of the
Offered Shares on the terms and conditions set forth in the
Notice, with a copy of such election notice to Andina.
(c) If the Non-Transferring Shareholders timely notify
the Transferring Shareholder in writing of the election to
exercise the right to purchase all (but not less than all) of the
Offered Shares, the purchase, sale and Transfer of the Offered
Shares shall take place on a date fixed by the Non-Transferring
Shareholders which must be a date within 60 days after the
receipt of the Notice. The closing of such purchase shall be
effected in accordance with Section 4.5.
(d) If the Non-Transferring Shareholders fail to
timely notify the Transferring Shareholder in writing of the
election to exercise the right to purchase all (but not less than
all) of the Offered Shares within the Refusal Election Period or,
following notification, the Non-Transferring Shareholders shall
fail to consummate the purchase of the Offered Shares within the
time period set forth in paragraph (c) above (other than a
failure to consummate a sale of the Offered Shares which results
from the inability or failure of the Transferring Shareholder to
transfer good and marketable title to such Offered Shares, a
breach by the Transferring Shareholder of this Agreement or
otherwise due to circumstances not reasonably within the
control of the Non-Transferring Shareholders), then the
Transferring Shareholder shall have the right for a period
of 90 days after the termination of the Refusal Election
Period (or after the earlier waiver by the Non-Transferring
Shareholders of the right to purchase), to transfer the
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Offered Shares to the third party who made the Bona Fide Offer
on terms not less favorable to the Transferring Shareholder than
the price per share and the other terms and conditions stated in
the Bona Fide Offer. If the Transferring Shareholder fails to
consummate the transfer of the Offered Shares prior to the
expiration of such 90-day period (or earlier period as set forth
immediately above), then prior to any subsequent Transfer of any
Shares owned by the Transferring Shareholder, the Transferring
Shareholder must comply with the terms of this Agreement and the
restrictions on transfer shall again be applicable with respect
thereto.
(e) The provisions of this Section 4.3 shall not apply
with respect to (i) Transfers of Shares by any KO Shareholder in
accordance with the provisions of Sections 4.1(b) or 5.1 of this
Agreement, or (ii) Transfers of Shares by the Majority
Shareholders in accordance with the provisions of Section 4.1(c)
of this Agreement.
(f) For purposes of this Section 4.3, (i) if the
Transferring Shareholder is a Majority Shareholder Party, the
term Non-Transferring Shareholder shall be deemed to include only
the KO Shareholders and (ii) if the Transferring Shareholder is a
KO Shareholder, the term Non-Transferring Shareholder shall be
deemed to include only the Majority Shareholder Parties.
4.4 RIGHT OF FIRST OFFER.
(a) Except as set forth in Section 4.1(b), 4.1(c) or
4.4(f), if a Shareholder proposes to Transfer all or any portion
of its Shares (the "Publicly Offered Shares") in a Public
Offering or in Brokers Transactions, then such Transferring
Shareholder shall give notice (the "Public Sale Notice") of such
intention to Transfer the Publicly Offered Shares to the Non-
Transferring Shareholders. Such Public Sale Notice shall set
forth: (i) the number of Publicly Offered Shares proposed to be
Transferred, (ii) the price per Share determined in good faith by
the Transferring Shareholder on the date of the Public Sale
Notice (the "First Offer Price"), (iii) the planned date of such
Transfer, and (iv) any other material proposed terms of the
Transfer.
(b) Upon receipt of the Public Sale Notice, the Non-
Transferring Shareholders shall have the right, for a period of
60 days following the date such Public Sale Notice is received
(or if the KO Shareholders are the Non-Transferring Shareholders,
until 15 days after the first meeting of the KO Board of
Directors which is held at least 30 days after the date on which
the KO Shareholders receive the Public Sale Notice), to notify
the Transferring Shareholder of the election to purchase the
Publicly Offered Shares at the First Offer Price (the "First
Notice Period"). The Public Sale Notice shall constitute an
offer to the Non-Transferring Shareholders, which shall be
irrevocable during the First Notice Period, to sell to the Non-
Transferring Shareholders the Publicly Offered Shares upon the
terms provided in this Section 4.4 and the Public Sale Notice.
(c) If the Non-Transferring Shareholders timely
notify the Transferring Shareholder of the election to
exercise the right to purchase the Publicly Offered Shares, the
purchase, sale and transfer of the Publicly Offered Shares shall
take place on a date fixed by the Non-Transferring Shareholders
which must be a date within 60 days after the delivery of the
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election to purchase such Publicly Offered Shares. The closing
of such purchase shall be effected in accordance with Section 4.5.
(d) If the Non-Transferring Shareholders fail to
timely notify the Transferring Shareholder of the election to
exercise the right to purchase the Publicly Offered Shares within
the First Notice Period, or if, following notification, the Non-
Transferring Shareholders shall fail to consummate the purchase
of the Publicly Offered Shares within the time period set forth
in paragraph (c) above (other than a failure to consummate a sale
of the Publicly Offered Shares which results from the inability
or failure of the Transferring Shareholder to transfer good and
marketable title to such Publicly Offered Shares, a breach by the
Transferring Shareholder of this Agreement or otherwise due to
circumstances not reasonably within the control of the Non-
Transferring Shareholders), then the Transferring Shareholder
shall have the right for a period of 90 days after the
termination of the First Notice Period (or after the earlier
waiver by the Non-Transferring Shareholders of the right to
purchase), to Transfer the Publicly Offered Shares at a price not
less than 90 percent of the First Offer Price (x) in a Public
Offering, subject to Section 4.4(e) or (y) in Brokers
Transactions. If the Transferring Shareholder fails to
consummate the transfer of the Publicly Offered Shares prior to
the expiration of such 90-day period (or earlier period as set
forth immediately above), then prior to any subsequent Transfer
of any portion of the Transferring Shareholder's Shares, the
Transferring Shareholder must comply with the terms of this
Agreement and the restrictions on transfer shall again be
applicable with respect thereto.
(e) If the Transferring Shareholder proposes to
Transfer Shares in a Public Offering, as near as reasonably
practicable to the date of Transfer the Transferring Shareholder
shall give notice to the Non-Transferring Shareholders (the
"Second Offer") to sell to the Non-Transferring Shareholders the
Publicly Offered Shares at the price per share indicated in good
faith and in writing by the lead underwriter or purchaser of such
Shares as the estimated offering price therefor (the "Second
Offer Price"), provided, however, that no Second Offer need be
made if the Second Offer Price would be more than 90 percent of
the First Offer Price. Upon receipt of the Second Offer, the Non-
Transferring Shareholders shall have the right, for a period of
24 hours (the "Second Notice Period"), to notify the Transferring
Shareholder of the election to accept the Second Offer. If the
Non-Transferring Shareholders timely notify the Transferring
Shareholder of the election to exercise the right to purchase the
Publicly Offered Shares, the purchase, sale and transfer of the
Publicly Offered Shares shall take place on a date fixed by the
Non-Transferring Shareholders which must be a date within 60 days
after the receipt of the Second Offer. The closing of such
purchase shall be effected in accordance with Section 4.5. If
the Non-Transferring Shareholders fail to timely notify the
Transferring Shareholder of the election to exercise the right to
purchase the Publicly Offered Shares within the Second Notice
Period, or if, following notification, the Non-Transferring
Shareholders shall fail to consummate the purchase of the
Publicly Offered Shares within the time period set forth in this
paragraph (e) (other than a failure to consummate a sale of the
Publicly Offered Shares which results from the inability or
failure of the Transferring Shareholder to transfer good and
marketable title to such Publicly Offered Shares, a breach by the
Transferring Shareholder of this Agreement or otherwise due to
circumstances not reasonably within the control of the
Non-Transferring Shareholders), then the Transferring
Shareholder shall have the right for a period of 90 days
after the termination of the Second Notice Period (or
after the earlier waiver by the Non-Transferring
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Shareholders of the right to purchase), to Transfer the Publicly
Offered Shares in a Public Offering. If the Transferring Shareholder
fails to consummate the transfer of the Publicly Offered Shares prior
to the expiration of such 90-day period (or earlier period as set
forth immediately above), then prior to any subsequent Transfer of
any Shares, the Transferring Shareholder must comply with the terms
of this Agreement and the restrictions on transfer shall again be
applicable with respect thereto.
(f) The provisions of this Section 4.4 shall not apply
with respect to (i) Transfers of Shares by any KO Shareholder in
accordance with the provisions of Sections 4.1(b) or 5.1 of this
Agreement, or (ii) Transfers of Shares by the Majority
Shareholders in accordance with the provisions of Section 4.1(c)
of this Agreement.
(g) For purposes of this Section 4.4, (i) if the
Transferring Shareholder is a Majority Shareholder Party, the
term Non-Transferring Shareholder shall be deemed to include only
the KO Shareholders and (ii) if the Transferring Shareholder is a
KO Shareholder, the term Non-Transferring Shareholder shall be
deemed to include only the Majority Shareholder Parties.
4.5 CLOSING OF PURCHASE. At the closing of any purchase
and sale of Shares by the Shareholders pursuant to this Article
4, (i) the Transferring Shareholder shall Transfer to the Non-
Transferring Shareholders the certificates or other documents
evidencing the Shares being purchased, together with such duly
executed assignments separate from such certificates and other
documents or instruments reasonably required by counsel for the
Non-Transferring Shareholders to consummate such purchase, and
(ii) the Non-Transferring Shareholders shall pay the purchase
price in cash. In addition, at the closing of such purchase and
sale, (x) the Transferring Shareholder shall deliver to the Non-
Transferring Shareholders an executed, written representation, in
form and substance reasonably satisfactory to legal counsel for
the Non-Transferring Shareholders, that the Transferring
Shareholder owns the shares of capital stock of Andina free and
clear of all liens and encumbrances and that upon the delivery of
such shares of capital stock of Andina, the Non-Transferring
Shareholders shall be vested with all of the Transferring
Shareholder's right, title and interest in such shares of capital
stock of Andina and (y) the Non-Transferring Shareholders shall
deliver to the Transferring Shareholder such investment
representations as may be reasonably requested for securities law
purposes.
ARTICLE 5
COVENANTS; REPRESENTATIONS
5.1 PUT RIGHT.
(a) Upon the occurrence of a Put Event, the KO
Shareholders shall have the right (a "Put Right") to require the
Majority Shareholders to purchase all, but not less than all, of
the shares of Andina stock owned by them (except as provided in
the next sentence) at the Put Price (calculated on a per share
basis) as determined in Section 5.1(b). For purposes of this
Section 5.1, the Shareholders agree that the shares of Andina
stock subject to the Put Right shall include only the Acquired
Shares and any additional shares of Andina capital stock acquired by
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the KO Shareholders through the exercise of their preemptive
rights. The KO Shareholders shall give written notice to the
Majority Shareholders of their intention to exercise their Put
Right within 15 days after the date of the first meeting of the
KO Board of Directors which is held at least 30 days after the
date upon which the KO Shareholders receive written notice of the
determination of the Put Price pursuant to Section 5.1(b).
(b) Upon the occurrence of a Put Event, at the request
of the KO Shareholders, the parties shall cause the Put Price to
be determined as follows:
(i) If the shares to be purchased by the Majority
Shareholders pursuant to the Put Right are
shares of Class A Stock, the Put Price for
such shares shall be mutually agreed upon by
the KO Shareholders and the Majority
Shareholders or, if the KO Shareholders and
the Majority Shareholders are unable to agree
within thirty days after the request by the
KO Shareholders for the determination of the
Put Price, the Majority Shareholders, on the
one hand, and the KO Shareholders, on the
other hand, shall each choose an
internationally recognized investment banking
firm with experience in the analysis of soft
drink businesses and each of those two firms
within sixty days from the date of their
engagement shall prepare an appraisal setting
forth its determination of the Put Price. If
such two firms do not agree on the Put Price
and following such determination the KO
Shareholders and the Majority Shareholders
continue to be unable to agree upon the Put
Price within ten days from the expiration of
such 60-day term, the two firms shall, in
good faith, select a third investment banking
firm, which third firm shall be an
internationally recognized firm with
experience in the analysis of soft drink
businesses. The third investment banking
firm so selected shall within forty-five days
from the date of its engagement prepare an
appraisal setting forth its determination of
the Put Price, which determination shall be
final and binding on the parties. The cost
of such investment banking firm(s) shall be
borne equally by the KO Shareholders, on the
one hand, and the Majority Shareholders, on
the other. The KO Shareholders and the
Majority Shareholders shall cooperate fully
in selecting investment bankers and shall
cooperate fully in their determination of the
Put Price. If a party fails to select an
investment banker or fails to cooperate with
such banker as described herein, in either
case, within ten days of receipt of a notice
specifying such failure to cooperate from the
other party or parties, the other party or
parties shall, in good faith, cooperate with
the investment banker already retained under
the terms of this provision or, if not yet
retained, select an investment banking firm of
its sole discretion, to make a determination of
the Put Price, which determination shall be final
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and binding on the parties. The parties shall
instruct the investment banking firm so retained
to deliver its written opinion as to the Put
Price to the parties within thirty days
following the selection of such banker. The
Put Price of the shares of Class A Stock
shall be the price that a holder of shares of
Class A Stock would receive upon the sale of
such shares in a transaction under market
conditions between a willing seller and a
willing buyer as of the date of the request
by the KO Shareholders that the Put Price be
determined.
(ii) If the Shares to be purchased by the Majority
Shareholders pursuant to the Put Right are
shares of Common Stock or Class B Stock, the
Put Price shall be the Market Value of such
shares of Common Stock or Class B Stock.
(c) If the KO Shareholders shall for purposes of this
Agreement consent in writing to a Put Event, such prior written
consent shall be deemed to be a waiver of their Put Right for
purposes of the transaction as to which written consent has been
given; provided, however, that such written consent shall not be
deemed to be a waiver of their Put Right for purposes of any
other transaction which might be deemed to constitute a Put
Event.
5.2 DEPOSIT AGREEMENT.
(a) Concurrently with the execution of this Agreement
and in consideration of the execution and delivery of the parties
of this Agreement (including the provisions set forth in Article
4 of this Agreement), the parties hereto are entering into a
Stock Purchase Option Agreement and Custody Agreement (the
"Deposit Agreement") in the form of Exhibit 5.2, pursuant to
which the Majority Shareholders are agreeing to provide the KO
Shareholders with a call right relating to Shares held by the
Majority Shareholders and are agreeing to certain restrictions
regarding the transfer of Shares held by the Majority
Shareholders.
(b) At least ninety days prior to taking any action
with respect to any of the following matters (a "Fundamental
Transaction"), the Majority Shareholders will provide the KO
Shareholders with written notice of the intent to take such
action:
(i) the sale of all or substantially all of the
assets of Andina;
(ii) any reorganization, merger, consolidation,
share exchange or business combination involving
Andina;
(iii) any change in the direct or indirect
ownership of the outstanding voting power or equity
interests of any of the Majority Shareholders as a
result of which the Majority Shareholder Partner Group
owns collectively less than 75% of the outstanding
voting power or less than 75% of the outstanding equity
interests of any of the Majority Shareholders;
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(iv) any change in the direct or indirect
ownership of the outstanding voting power or equity
interests of Andina as a result of which the Majority
Shareholders own in the aggregate less than 50.1% of
the outstanding voting power of Andina or less than 25%
of the outstanding equity interests of Andina; or
(v) a stock split, subdivision, stock dividend,
extraordinary dividend or dividends or other
reclassification, consolidation or combination of
Andina's voting securities or any similar action or
transaction (other than the Amendments).
(c) From the date of any request by the KO
Shareholders for the determination of the Call Price (as defined
in the Deposit Agreement) until the closing of the purchase of
the Callable Shares (as defined in the Deposit Agreement) by the
KO Shareholders, the Majority Shareholders agree that they (x)
will not take, and will not vote their shares of Andina stock in
favor of, any action with respect to any Fundamental Transaction
and (y) will cause Andina to carry on its business in the
ordinary course.
(d) Each of the Majority Shareholders agrees that it
will not convert or exchange, and will not take any action with
respect to the conversion or exchange of, any Shares into shares
of Class B Stock.
5.3 PREEMPTIVE RIGHTS. The KO Shareholders reserve their
rights, to the full extent permitted under applicable Chilean
laws and regulations, to maintain their pro rata share ownership
of Common Stock, Class A Stock, Class B Stock or other capital
stock through the exercise of preemptive rights. If Andina
issues additional shares of capital stock to existing
shareholders in a preemptive rights offering (a "Preemptive
Rights Offering"), the Majority Shareholders agree that they will
not vote the Majority Shareholder Shares in favor of, or permit,
the setting of a price for any shares of capital stock which may
be offered to third parties (even if such shares are to be
acquired in a transfer on a stock exchange) which is lower than
the price at which shares of capital stock were offered to the KO
Shareholders in the Preemptive Rights Offering without the prior
written consent of the holders of the KO Shareholders.
5.4 PROVISION OF CERTAIN INFORMATION. The Majority
Shareholders agree to cause Andina to provide KO, TCCC Argentina,
Interamerican and SPC with the following:
(a) such information and calculations as to permit
each of them to meet its planning, accounting, tax and regulatory
requirements (including the U.S. Foreign Corrupt Practices Act,
if applicable, and any similar Chilean laws), and shall conduct
its affairs in such manner as to permit each of them to comply
with such laws, it being understood that, except to the extent
required to comply with such laws, Andina will not be required to
change its existing accounting practices;
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<PAGE>
(b) quarterly unaudited US$ and C$ consolidated
financial statements (including net revenues, cost of goods sold,
operating income, cash operating profit and net income) prepared
in accordance with Chilean generally accepted accounting
principles, consistently applied, as soon as practicable but not
later than 90 days after the end of each quarter for 1996 and
1997; in 1998 and beyond this information will be provided within
60 days after the end of each quarter;
(c) quarterly physical and unit case sales each
categorized into KO and non-KO brands as soon as practicable but
not later than 60 days after the end of each quarter;
(d) annual US$ and C$ audited consolidated financial
statements prepared in accordance with Chilean generally accepted
accounting principles, consistently applied, and reconciled to
U.S. generally accepted accounting principles, as soon as
practicable but not later than 100 days after the end of each
fiscal year;
(e) for Andina and each of its subsidiaries, annual C$
audited financial statements prepared in accordance with Chilean
generally accepted accounting principles, consistently applied,
and reconciled to U.S. generally accepted accounting principles,
as soon as practicable but not later than 100 days after the end
of each fiscal year;
(f) copies of the annual tax returns as filed for
Andina and each of its subsidiaries as soon as practicable but
not later than 120 days after the end of each fiscal year;
(g) US$ and C$ budget (including net revenues, cost of
goods sold, operating income, cash operating profit, net income
and unit cases) on a consolidated basis by quarter for the next
fiscal year prepared in accordance with Chilean generally
accepted accounting principles, consistently applied, on a
preliminary basis in October of each year and finalized in
December of each year;
(h) US$ and C$ budget (including net revenues, cost of
goods sold, operating income, cash operating profit, net income
and unit cases) on a consolidated basis by year for the next
three fiscal years prepared in accordance with Chilean generally
accepted accounting principles, consistently applied, in May of
each year;
(i) The actual and budgeted information set forth in
Exhibit 5.4(i) in accordance with KO's regular submission
schedule regarding such information (with no more than a one-
month submission lag); and
(j) the information set forth in Exhibit 5.4(j) in
accordance with KO's regular submission schedule.
The Majority Shareholders agree to cause Andina to cooperate
in providing to KO, TCCC Argentina, Interamerican and SPC
on a timely basis such information as they may reasonably
request in order to permit KO, TCCC Argentina,
Interamerican and/or SPC to reconcile to U.S.
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<PAGE>
generally accepted accounting principles any amounts described
above which are prepared in accordance with Chilean generally
accepted accounting principles.
5.5 LICENSE AGREEMENT. Following the Closing, upon the
execution and delivery by KO and Andina of a Coca-Cola tradename
license agreement in a form mutually satisfactory to each of KO
and Andina (the "License Agreement"), Andina shall be entitled to
change its corporate name to "Coca-Cola Andina S.A.," subject to
the terms and conditions of such License Agreement.
5.6 REPRESENTATIONS AND WARRANTIES. Each party hereto
represents and warrants to each other party hereto as follows:
(a) Such party has all requisite power and capacity to
enter into and perform its obligations under this Agreement and
to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the performance by
such party of its obligations hereunder have been duly authorized
by all necessary action on behalf of such party. This Agreement
has been duly executed and delivered by such party and
constitutes the legal, valid and binding obligation of such party
enforceable against such party in accordance with its terms.
(b) The execution, delivery and performance of this
Agreement by such party will not result in (i) any conflict with
the articles of incorporation, bylaws or other organization
documents or trust agreement (in each case, if applicable) of
such party, (ii) any breach or violation of or default by such
party under any statute, law, rule or regulation of any
governmental authority, or any judgment, decree, order or any
mortgage, deed of trust, indenture, agreement or other instrument
to which such party is a party or by which any of its assets may
be bound, or (iii) except as contemplated hereby, the creation or
imposition of any lien or encumbrance on any of such party's
assets or properties or any restriction on the ability of such
party to consummate the transactions contemplated by this
Agreement.
ARTICLE 6
MISCELLANEOUS
6.1 EFFECT OF REORGANIZATION, ETC. The purchase price per
Share and similar provisions in this Agreement shall be equitably
adjusted to reflect any stock split, subdivision, stock dividend,
extraordinary dividend or dividends or other reclassification,
consolidation or a combination of Andina's voting securities or
any similar action or transaction (other than the Amendments)
which occurs after the date of this Agreement.
6.2 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the
Deposit Agreement contain the entire agreement among the parties
hereto with respect to the subject matter hereof, and supersedes
all prior agreements and negotiations and oral understandings
relating to the subject matter hereof; provided that this provision
is not intended to abrogate any other written agreement between the
parties executed contemporaneously with or after this agreement; and
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provided further that neither this Agreement nor the Deposit
Agreement is intended to amend or modify any of the terms or
provisions of any of the bottlers' agreements between KO
and Andina or any of the subsidiaries of Andina. In the event of
any conflict or inconsistency between the terms of this Agreement
or the Deposit Agreement with the terms of any such bottlers'
agreements with respect to the subject matter governed by such
bottlers' agreements, the terms of such bottlers' agreements
shall control. No amendment, modification or alteration of the
terms or provisions of this Agreement shall be binding unless the
same shall be in writing and duly executed by the parties hereto.
6.3 SUCCESSORS AND ASSIGNS. This Agreement and the rights
of a party hereunder may not be assigned, and the obligations of
a party hereunder may not be delegated, in whole or in part,
without the prior written consent of all other parties hereto,
except that the rights and obligations of the KO Shareholders may
be assigned or delegated to KO or to any subsidiary of KO,
provided that such assignment shall not relieve the assignor of
its obligations under this Agreement. This Agreement shall be
binding upon and shall inure to the benefit of the parties and
their respective successors and permitted assigns.
6.4 SPECIFIC PERFORMANCE. The parties agree that
irreparable damage would occur if any of the provisions of this
Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to equitable relief, including in
the form of injunctions, in order to enforce specifically the
provisions of this Agreement, in addition to any other remedy to
which they are entitled at law or in equity.
6.5 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed
to be an original and all of which shall constitute one and the
same instrument.
6.6 HEADINGS. The headings of the sections and paragraphs
of this Agreement are inserted for convenience only and shall not
be deemed to constitute part of this Agreement or to affect the
interpretation hereof.
6.7 MODIFICATION AND WAIVER. Any rights arising under this
Agreement may be waived in writing by the party holding the same.
No waiver of any right arising under this Agreement shall be
deemed to or shall constitute a waiver of any other right
hereunder (whether or not similar).
6.8 NOTICES. Any notice, request, instruction or other
document to be given hereunder by any party hereto to any other
party hereto shall be in writing and delivered personally or by
telecopy transmission or sent by registered or certified mail or
by any express mail service, postage and fees prepaid:
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If to Andina: Embotelladora Andina S.A.
Avenida Andres Bello No. 2687 Piso 20
Casilla 7187
Santiago, Chile
Attention: Chief Executive Officer
Telefax No.: 562/338/0510
with a copy to: Embotelladora Andina S.A.
Avenida Andres Bello No. 2687 Piso 20
Casilla 7187
Santiago, Chile
Attention: General Counsel
Telefax No.: 562/338/0570
If to any of the
KO Shareholders or
to SPC after the
Closing Date: The Coca-Cola Company
One Coca-Cola Plaza, N.W.
Atlanta, Georgia 30313
Attention: Chief Financial Officer
Telefax No.: (404) 676-8683
with a copy to: The Coca-Cola Company
One Coca-Cola Plaza, N.W.
Atlanta, Georgia 30313
Attention: General Counsel
Telefax No.: (404) 676-6209
If to SPC prior to Bottling Investment Limited
the Closing Date: Avenida Andres Bello No. 2687, Piso 7
Casilla 7187
Santiago, Chile
Attention: General Legal Counsel
Telefax No.: 562/338/8138
If to the Majority Inversiones Freire Ltda.
Shareholders: Inversiones Freire Dos Ltda.
c/o Portaluppi, Guzman y Bezanilla
Huerfanos 863, Piso 9
Santiago, Chile
Attention: Eugenio Guzman
Telefax No.: 562/638/3934
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<PAGE>
or at such other address or number for a party as shall be
specified by like notice. Any notice which is delivered
personally or by telecopy transmission or by mail in the manner
provided herein shall be deemed to have been duly given to the
party to whom it is directed upon actual receipt by such party.
6.9 LEGENDS. Upon the execution of this Agreement, the
parties hereto shall cause each and every certificate
representing Shares owned by each Shareholder to bear on its face
in conspicuous type and in both the English and Spanish languages
the following legends:
The shares represented by this certificate, including
their Transfer and any arrangements or agreements with
respect to their voting, are subject to the terms and
conditions of Andina's Estatutos Sociales and that
certain Shareholders' Agreement dated as of September
5, 1996 by and among certain shareholders of Andina, a
copy of which is on file at the main office of Andina.
Any sale, assignment, transfer, gift, pledge,
encumbrance, or other disposition and any arrangement
or agreement with respect to the voting of the shares
represented by this certificate not in conformity with
said Estatutos Sociales and the Shareholders' Agreement
shall, to the full extent permitted under applicable
Chilean laws or regulations, be invalid.
If such legends cannot be practically placed on the face of
such certificate, such legends shall be set out in conspicuous
type on the back of the certificate, and notice thereof shall be
given in conspicuous type on the front. The parties hereto agree
that each and every certificate representing shares of capital
stock of Andina issued hereafter to each Shareholder or acquired
by a Shareholder shall be subject to this Agreement and the stock
certificates representing such shares shall have endorsed thereon
the above legends. The parties agree to file a copy of this
Agreement with Andina, that a notary public will carry out such
filing and that Andina may be required by any KO Shareholder to
make annotations in the shareholders' registry of Andina
regarding this Agreement and the restrictions imposed by shares
owned by the Shareholders.
6.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT GIVING EFFECT TO
THE CONFLICTS OF LAW PRINCIPLES THEREOF.
6.11 CONSTRUCTION. No provision of this Agreement shall be
construed against or interpreted to the disadvantage of any party
hereto by any court or other governmental authority by reason of
such party's having or being deemed to have structured or drafted
such provision.
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6.12 NO THIRD-PARTY BENEFICIARIES. Except as otherwise
specifically provided in this Agreement, nothing in this
Agreement is intended to confer upon any person other than the
parties hereto any rights or remedies.
6.13 CONSENT TO JURISDICTION.
(a) Each of the parties hereby irrevocably consents
and agrees that any action, suit or proceeding arising in
connection with any disagreement, dispute, controversy or claim
arising out of or relating to this Agreement (for purposes of
this Section a "Legal Dispute") may be brought to the non-
exclusive jurisdiction of the United States District Court for
the Southern District of New York, New York, United States of
America or, in the event (but only in the event) such court does
not have subject matter jurisdiction over such action, suit or
proceeding, in the courts of the State of New York sitting in the
City of New York, New York, United States of America.
(b) Each of the parties hereby waives, and agrees not
to assert, as a defense in any action, suit or proceeding
referred to in Section 6.13(a), that it is not subject thereto or
that such action, suit or proceeding may not be brought or is not
maintainable in such court or that its property is exempt or
immune from execution, that the action, suit or proceeding is
brought in an inconvenient forum or that the venue of the action,
suit or proceeding is improper. The Majority Shareholders hereby
irrevocably appoint CT Corporation System (the "Agent for
Service") as its agent to receive on its behalf service of copies
of the summons and complaint and any other process which may be
served in any such action, suit or proceeding. Such service may
be made by mailing or delivering a copy of such process to such
Person in case of the Agent for Service at the address of the
Agent for Service in the State of New York, United States of
America, and the Majority Shareholders hereby irrevocably
authorize and direct the Agent for Service to accept such service
on its behalf.
(c) Each party hereto agrees that a final judgment in
any legal action, suit or proceeding described in this Section
6.13 after the expiration of any period permitted for appeal and
subject to any stay during appeal shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.
6.14 TRANSLATIONS. This Agreement has been executed, and
all amendments, supplements, modifications or replacements hereto
shall be made, in the English language. This Agreement may be
translated into the Spanish language for convenience of one or
more of the parties hereto, provided that in case of
discrepancies the English version shall prevail in all cases.
6.15 OTHER RESTRICTIONS. The provisions of this Agreement
shall be in addition to and not in lieu of any and all
restrictions on the Transfer of the shares of capital stock of
Andina which arise from applicable laws and any other
restrictions on Transfers agreed to by or among the parties
hereto.
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6.16 "INCLUDING". Words of inclusion shall not be construed
as terms of limitation herein, so that references to "included"
matters shall be regarded as non-exclusive, non-characterizing
illustrations.
6.17 REFERENCES. Whenever reference is made in this
Agreement to any Article or Section, such reference shall be
deemed to apply to the specified Article or Section of this
Agreement.
6.18 SEVERABILITY. The invalidity or unenforceability of any
provision hereof in any jurisdiction will not affect the validity
or enforceability of the remainder hereof in that jurisdiction or
the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction. To the extent permitted by
applicable law, each party waives any provision of law that
renders any provision hereof prohibited or unenforceable in any
respect. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than
voided, if possible, in order to achieve the intent of the
parties to the extent possible.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day first above written.
EMBOTELLADORA ANDINA S.A.
By: /s/ JOSE SAID S.
Name: Jose Said S.
Title: Chairman of the Board
By: /s/ JOSE ANTONIO GARCES
Name: Jose Antonio Garces
Title: Director
THE COCA-COLA COMPANY
By: /s/ WELDON H. JOHNSON
Name: Weldon H. Johnson
Title: Senior Vice President
COCA-COLA INTERAMERICAN CORPORATION
By: /s/ WELDON H. JOHNSON
Name: Weldon H. Johnson
Title: Senior Vice President
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COCA-COLA DE ARGENTINA S.A.
By: /s/ FERNANDO MARIN
Name: Fernando Marin
Title: Attorney-in-fact
BOTTLING INVESTMENT LIMITED
By: /s/ DIEGO PERALTA V.
Name: Diego Peralta V.
Title: Chairman of the Board
INVERSIONES FREIRE LTDA.
By: /s/ JOSE SAID S.
Name: Jose Said S.
Title: Attorney-in-fact
By: /s/ JOSE ANTONIO GARCES
Name: Jose Antonio Garces
Title: Attorney-in-fact
INVERSIONES FREIRE DOS LTDA.
By: /s/ JOSE SAID S.
Name: Jose Said S.
Title: Attorney-in-fact
By: /s/ JOSE ANTONIO GARCES
Name: Jose Antonio Garces
Title: Attorney-in-fact
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EXHIBIT 99.5
[ENGLISH TRANSLATION]
STOCK PURCHASE OPTION AGREEMENT
INVERSIONES FREIRE LIMITADA
AND
INVERSIONES FREIRE DOS LIMITADA
TO
COCA-COLA INTERAMERICAN CORPORATION
COCA-COLA DE ARGENTINA S.A.
THE COCA-COLA COMPANY
AND
CUSTODY AGREEMENT
INVERSIONES FREIRE LIMITADA
AND
INVERSIONES FREIRE DOS LIMITADA
TO
CITIBANK N.A.
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On the 5th day of September of 1996, appear: Mr. Jose Said
Saffie and Mr. Jose Antonio Garces Silva representing, as shall
be evidenced, Inversiones Freire Limitada ("Freire") and
Inversiones Freire Dos Limitada ("Freire Dos"), both also
called for the purposes of this contract the "Grantors" or the
"Owners", all of them domiciled to this effect at Huerfanos
863, 6th floor, Santiago, Chile; Mr. Weldon Johnson
representing, as shall be evidenced, Coca-Cola Interamerican
Corporation and The Coca-Cola Company, and Mr. Fernando Marin
Diaz, representing as shall be evidenced, Coca-Cola de
Argentina S.A. also referred to for the purpose of this
contract as the "Beneficiaries", all domiciled for these
purposes at One Coca-Cola Plaza, N.W., Atlanta, Georgia; and
Mr. Diego Peralta Valenzuela representing Citibank N.A. also
referred to for the purposes of this contract as the
"Custodian", domiciled for these purposes at Avenida Andres
Bello 2687, 7th floor, Santiago, Chile; and Mr. Jose Said
Saffie and Mr. Jose Antonio Garces Silva representing
Embotelladora Andina S.A., also referred to for the purposes of
this contract as "Andina" or the "issuing company" domiciled
for these purposes at Avenida Andres Bello No. 2687, 20th
floor, Santiago, Chile; the appearing parties of adult age, who
agree on the following stock purchase option agreement
(hereinafter also the "Agreement" or "Option Agreement"):
FIRST:
Freire owns as of the date hereof a total of 185,701,969 shares
of Embotelladora Andina S.A., as evidenced on the titles No.
2512, 2514, 2515, 2615, 2639, 3171, 3651, 4564, 4938, 4939,
5488, 10163, 26178 and 26179 registered to its name on the
Embotelladora Andina S.A. Shareholders Registry. On the other
hand, Freire Dos owns as of the date hereof a total of
14,300,000 shares of Embotelladora Andina S.A. as evidenced on
the title No. 26180, registered to its name on the
Embotelladora Andina S.A. Shareholders Registry.
SECOND:
Freire and Freire Dos have, on this date, entered into a
contract entitled "Shareholders Agreement", to which, among
others, The Coca-Cola Company, Coca-Cola Interamerican
Corporation and Coca-Cola de Argentina S.A. are also parties.
In accordance with the transactions which must be performed
pursuant to said contract and other agreements executed of even
date herewith, the shares owned by Freire described in the
preceding first clause will be exchanged into 185,701,969
Series A shares of Embotelladora Andina S.A. and into
185,701,969 Series B shares of Embotelladora Andina S.A., as
will be provided by the Estatutos Sociales of Andina after the
adoption of the amendments that will be proposed to the next
General Extraordinary Shareholders Meeting of Andina (the
"Amendments"). On the other hand, the shares owned by Freire
Dos described in the preceding first clause shall be exchanged
into 14,300,000 Series A shares of Embotelladora Andina S.A.
and into 14,300,000 Series B shares of Embotelladora Andina
S.A. (collectively, the "Reclassification").
<PAGE>
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For purposes of this Agreement, the term "Shares" means any
shares of capital stock of Andina, any securities or other
options or rights convertible into or exchangeable for any
shares of capital stock of Andina, or any American Depository
Shares or other instruments representing shares of capital
stock of Andina, whether or not issued or outstanding on the
date hereof; provided that the term "Shares" shall not include
any Series B shares or any American Depository Shares or other
instruments representing Series B shares so long as Series B
shares do not have voting power greater than the voting power
provided to the Series B shares in the Amendments. For
purposes of this Agreement, Shares of Andina held by the
Grantors are in some cases also referred to herein as the
"Option Shares."
THIRD:
Mr. Jose Said Saffie and Mr. Jose Antonio Garces Silva hereby
and through this contract, representing Freire and Freire Dos,
grant in a definitive and irrevocable manner a stock purchase
option (the "Option") in favor of The Coca-Cola Company,
Coca-Cola Interamerican Corporation and Coca-Cola de Argentina
S.A., through which at the option of any one of the Beneficiaries
(or two of them or all of them together) and according to the
terms and conditions stated later herein, the Grantors shall be
obligated to sell all (and not less than all) of the Shares of
Embotelladora Andina S.A. which Freire and Freire Dos currently
own, together with all (and not less than all) of the Shares of
Embotelladora Andina S.A. which after this date Freire and
Freire Dos may purchase in any manner, whether they are
purchased from Embotelladora Andina S.A. or purchased from
third parties.
Notwithstanding that all of their Shares are subject to the
Option, the Grantors may dispose of and transfer a part of
their Shares, as long as the Shares owned by the Grantors
represent in excess of each and every one of the following:
(i) 200,000,000 Shares owned by the Grantors, (ii) 50.1% of the
Shares of Andina with full voting rights and 50.1% of the total
voting power of all the Shares of Andina, and (iii) 25% of the
total of the shares issued by Andina. In any event, the right
set forth in the preceding sentence will only exist as long as
the share structure of Series A and B provided in the
Amendments remains in place without any changes, and the
Grantors are in full compliance with the provisions of the
Shareholders Agreement (including the provisions of Article 4
of such document). As a result, the Shares that may be
transferred pursuant to this paragraph will not be subject to
the prohibition of clause Ninth nor the custody of clause
Eleventh of this document, as long as the Grantors comply with
all the conditions already mentioned in this paragraph, and
such Shares will always be subject to the Option.
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FOURTH:
It is expressly left on record that in the case of
Embotelladora Andina S.A. splitting up, the Option extends in
addition to all the shares of the new company or companies to
be organized by virtue of the split-up and which correspond to
the Shares of Andina owned by the Grantors. Likewise, it is
expressly left on record that in the event of a merger of
Embotelladora Andina S.A., the Option extends to the shares of
the surviving company or of the new one to be organized and
which replace the shares of Embotelladora Andina S.A. which
correspond to the Shares owed by the Grantors. Freire and
Freire Dos shall not vote their Shares of Andina in any
shareholders meeting of Andina dealing with the amendment of
the Estatutos Sociales of Andina or any reorganization,
transfer of assets, reclassification, subdivision, combination
or consolidation of securities of Andina, merger, dissolution,
issuance or sale of securities or any other voluntary action,
if any of the foregoing events has as an effect avoiding or
seeking to avoid the observance or performance of any of the
terms of this Agreement. At all times Freire and Freire Dos
will in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or
appropriate in order to protect the rights of The Coca-Cola
Company, Coca-Cola Interamerican Corporation and Coca-Cola de
Argentina S.A. under this document against dilution or
impairment.
FIFTH:
The Option may be exercised from this date and at any time
during the period that ends on December 31, 2130, as long as
one or more of the following events occurs (hereinafter
"Exercise Conditions"): (i) any change in the direct or
indirect ownership of the shares or other ownership interests
of any of the Grantors, that is, Freire and Freire Dos, such
that the "Group of Controllers of the Grantors" (as defined
hereinafter) owns collectively less than 75% of the shares or
other ownership interests of any of the Grantors or less than
75% of the shares with full voting rights or of the total
voting power of any of the Grantors; (ii) any change in the
Shares issued by Andina or in the ownership of Andina Shares
(whether as a result of transfers, sales, reorganization,
merger, subdivision of shares or otherwise) with the result
that the Grantors own less than 50.1% of the Shares of Andina
with full voting rights or of the total voting power (unless
authorized in writing for the purposes of this Agreement by The
Coca-Cola Company or unless there is a sale of Shares or the
assignment of preferred options to subscribe Shares to the
Beneficiaries or their Authorized Successors that has as a
direct result the reduction of voting Shares owned by Freire
and Freire Dos, but in this event the obligation to maintain a
certain level of ownership of Shares will continue in respect
of the new percentage of the shares that are owned by the
Grantors after the authorized transaction) or less than 25% of
the total of shares issued by Andina; (iii) the transfer of all
or substantially all of the assets of Andina; or (iv) the
occurrence of any event that enables The Coca-Cola Company
to terminate in advance one or more of the bottling
agreements of Andina (including those in which one or more
of its affiliates are parties) that represent at least 30%
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of the total unit case volume of "Coca-Cola" products of Andina
(including its affiliates) during the twelve preceding months,
because of a breach by Andina or its affiliates or a change of
control pursuant to the bottling agreements, without regard to
whether The Coca-Cola Company decides to exercise its right to
terminate one or more of such bottling agreements.
Once any of the Exercise Conditions occurs the Grantors will
send the Beneficiaries a written notice and the Beneficiaries
shall decide if they wish to initiate the "Option Exercise
Process" within 180 consecutive days from the date of receipt
of the notice given by the Grantors. The absence of such
notice will not constitute a breach by the Grantors, but
instead the purpose of such notice is to establish the starting
point for such 180 day period. The absence of such notice will
not prevent the Beneficiaries from initiating the Option
Exercise Process if they become aware of an event giving rise
to an Exercise Condition through other means. If one or more
Exercise Conditions occurs on one or more occasions, and the
Beneficiaries have decided not to exercise the Option with
respect to such Exercise Conditions, the failure to so exercise
shall not prevent the Beneficiaries from initiating the Option
Exercise Process with respect to a subsequent Exercise
Condition.
For purposes of this Agreement, the term "Controllers of the
Grantors" means the persons mentioned in Appendix A to this
contract, and that as of this date appear as "Beneficial
Owners" in the Schedule 13G filed with the U.S. Securities and
Exchange Commission (SEC) in accordance with the securities
regulations of such country. Such Appendix is understood to
form a part of this contract for all legal purposes.
"Group of Controllers of the Grantors" shall mean: (a) any of
the Controllers of the Grantors; (b) any of the spouses of the
Controllers of the Grantors; (c) any of the lineal descendants
of any of the Controllers of the Grantors; (d) any person who,
in circumstances where the transferor at the time of his death
did not have a spouse or any lineal descendants, receives
shares or ownership rights of the Grantors, as successors by
intestacy of any of the persons referred to in (a) and (c) or a
person that previously has received shares of the Grantors by
intestacy in the manner described in this clause (d); (e) any
of the Wholly owned Subsidiaries of one or more of any of the
persons previously indicated, and (f) any trust formed for the
benefit of any of the persons indicated in the preceding (a),
(b), (c) and (d), if one or more of such persons has total
control over the voting rights and investment decisions for the
funds of said trust.
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"Wholly owned Subsidiary" of a person shall mean an entity
whose rights, interests and shares or other participation in
the capital (with the exception of any minority holding of not
more than 1%, should this minority holding be necessary
according to the law applicable to the relevant entity) are
under the complete ownership, directly or indirectly, of said
person.
The period to exercise the Option provided for in this
Agreement is considered by the parties to be the best suited in
view of the reasons which cause them to undertake this Option
contract, bearing in mind that it is agreed in accordance with
the agreements reached by the parties in the mentioned
"Shareholders Agreement", whose effect is not limited in
duration; that Andina as a corporation has an unlimited
duration; and considering, among other things, that the
scheduled duration of the future Series A and B shares of
Andina ends on December 31, 2130.
The Controllers of the Grantors shall include in the by-laws of
each of the Grantors (that, is, Freire and Freire Dos) a
provision regarding the existence of this Agreement and the
Option contained herein.
SIXTH:
The exercise price of the Option will be determined in
accordance with the following procedure ("Exercise Option
Procedure"):
(a) The price shall be determined by mutual agreement of the
parties and in the case of disagreement, the price shall be the
Valuation Price of said shares in accordance with the
proceeding referred to under the following paragraph (b).
(b) For the purposes of this sixth clause, the "Valuation
Price" of the Shares of Andina owned by the Grantors will be
the sum in US dollars that the Grantors would receive for the
sale of their Shares of Andina in a transaction under market
conditions between a willing seller and a willing buyer, as of
the date of the notification of the determination of the
Valuation Price. The Valuation Price shall first be mutually
agreed between the parties, or, if the parties are unable to
reach an agreement within 30 consecutive days, may be
determined by the same parties considering the determinations
made by two internationally recognized investment banking firms
selected one by each party. Each of the parties shall select
an internationally recognized investment banking firm with
experience in the valuation of soft drinks businesses. Each of
the investment banking institutions selected in this manner
shall prepare an appraisal setting forth their determination of
the Valuation Price. The cost of the investment banking
institutions shall be at the expense of the Grantors and the
Beneficiaries in equal parts. The Grantors shall cooperate
fully both in the selection of an investment banking
institution and in the determination of the Valuation
Price. If any of the parties does not
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cooperate in the manner described in this document, after ten
consecutive days following the receipt of the notification of
lack of cooperation by any party, the diligent party will cooperate
in good faith with the investment bank(s) already engaged
according to the terms of this provision, or, if a bank that
should have been selected by one of the parties has not yet
been chosen, the diligent party shall have the right to choose
an investment banking firm. The investment banking firms that
are finally engaged shall be instructed to deliver to the
parties, in writing, their valuations within 60 consecutive
days from the date of their engagement. The Grantors as
majority shareholders of Andina, will take all steps necessary
to obtain the cooperation of Andina with the investment banks,
and, in general, with the aforementioned valuation process. If
the parties do not agree on price within 10 consecutive days
from the expiration of the 60 consecutive day term, the
investment banks at the request of any of the parties will
designate a third investment bank that has the same requisites
of reputation and experience and they will ask on behalf of the
parties that within 45 consecutive days it make a determination
of the Valuation Price. The investment bank will deliver to
the parties a written report with respect to its determination
of the Valuation Price. The costs and the cooperation required
in connection with the analysis of the third investment bank
will be governed by the terms already mentioned in this
paragraph. In the analysis of the three investment banks, they
shall always consider the bottling agreements of Andina with
the franchises granted in such contracts as in effect (even
though one or more of the bottling agreements were terminated
in the circumstances mentioned in clause fifth, (iv) of this
document). The Valuation Price mutually agreed by the parties,
or established by the written opinion of the third investment
bank, is hereinafter referred to as the "Valuation Opinion".
(c) The Grantors may, within the first ten days following the
notification of the determination of the Valuation Price by the
third investment bank, notify each of the Beneficiaries that
they have terminated the event giving rise to the Exercise
Condition and that they have reversed all of its effects and
consequences, returning all things to the prior state existing
before the occurrence provided that this paragraph (c) shall
not apply if the Exercise Condition is an event of clause fifth
which results in the termination of the bottling agreements
already mentioned in this clause, because the termination of
such agreements may not be reversed by the Grantors. If such
termination and reversal takes place, the Beneficiaries will
terminate the Option Exercise Process (with all costs of the
investment banks to be paid by the Grantors). If the Grantors
cannot comply with the 10 day period mentioned in this
paragraph, but intend to terminate and reverse the effects of
the event giving rise to the Exercise Condition, they shall
notify the Beneficiaries in writing of their decision and, in
an extraordinary manner they shall effect the termination (with
all the effects already mentioned) within the term that ends
upon the last of the following events: (i) 50 consecutive days
after the notice of the determination of the Valuation Price
from the third investment bank; or (ii) 10 days after the
written notice from the Beneficiaries regarding their
decision to exercise the Option. If the Option Exercise
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Process is not interrupted in such manner within a term of 120
consecutive days from the date of the notice of the determination
of the Valuation Price by the third investment bank, the Beneficiaries
may exercise the Option. If the Beneficiaries do not exercise
the Option within such 120 day term their right to exercise the
Option in connection with such particular Option Exercise
Process will terminate.
The formalities for the exercise of the Option are set forth in
the next clause.
SEVENTH:
The Option Shares may be acquired by any of The Coca-Cola
Company, Coca-Cola Interamerican Corporation or Coca-Cola de
Argentina S.A., or by any two or by all of them together, or by
any wholly owned subsidiary of any of the Beneficiaries
(hereinafter "Authorized Successors") in proportions which any
of them may freely indicate.
For the purposes of the exercise of the Option, any of the
Beneficiaries or their Authorized Successors, or any two or all
of them together, must send the representative of the Grantors
a written statement in which they express their decision to
exercise the Option, by a representative with sufficient
powers, to the Grantors' domicile indicated in the introductory
part of this contract. Said statement shall be accompanied by
the contract in which the stock sale shall be evidenced, which
must be signed by the Grantors' respective legal representative
and sent within 5 days from the date in which it was received
by the respective representative of the Grantors to the person
representing the Beneficiaries or Authorized Successors who
sent such written statement to the Grantor.
Together with the return of the contract evidencing the stock
sale, (i) the Grantors shall deliver to the respective
Beneficiaries the documents or contracts required by the
Beneficiaries' attorney in order to effect the purchase of the
Option Shares, including the Share certificates if they are
held by them and the certificates of the Shares that are in
custody shall be delivered to the Beneficiaries by the
Custodian referred to in the eleventh clause of this document
and in accordance with the terms stipulated therein, and (ii)
the respective Beneficiaries shall pay the purchase price in
cash. Furthermore, the Grantors shall deliver to the
respective Beneficiary or, if applicable, to each of the
respective Beneficiaries, a written and signed declaration, in
form and substance reasonably satisfactory to the
Beneficiaries' attorney, which establishes that the Grantors
are the owners of the Option Shares and in accordance with the
conditions indicated in the tenth clause of this contract, and
that the delivery of said Option Shares shall confer to the
Beneficiary or respective Beneficiaries all the right, title
and interest in such Andina Shares.
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EIGHTH:
The Option shall terminate without liability on the part of any
of the parties if any of the following events occurs: a) if the
Beneficiaries or their Authorized Successors sell Shares of
Andina to third parties other than their affiliates and as a
direct result of such sale the Beneficiaries own less than
23,500,000 ordinary Shares before the Reclassification or
23,500,000 Series A Shares (or of Shares successor to them or
ordinary Shares, if the Series A Shares cease to exist); b) if
the Beneficiaries as a consequence of increases of capital of
Andina own less than 4% of the ordinary Shares before the
Reclassification or 23,500,000 Series A Shares (or of Shares
successor to them or ordinary Shares, if the Series A Shares
cease to exist); c) if the bottling agreements of Andina as
described in clause fifth, paragraph (iv) are terminated by
Andina as a direct result of a breach of the same agreement on
the part of The Coca-Cola Company or The Coca-Cola Company
fails to negotiate in good faith the renewal of such bottling
agreements; d) if the Shareholders' Agreement mentioned in
clause second of this document does not become effective; or e)
if the bottling agreements as described in clause fifth,
paragraph (iv) of this Agreement are terminated in a definitive
manner by The Coca-Cola Company, unless the Option Exercise
Process has been initiated within a term of one year from the
date of termination of such bottling agreements. In this last
event, this Agreement will be maintained legally effective and
in full force until one or more of the Beneficiaries exercise
the Option and acquire ownership of the Shares or the
120 consecutive day term mentioned in clause sixth, paragraph
(c) of this document elapses without the Beneficiaries'
communicating in writing their decision to exercise the Option.
NINTH:
Freire and Freire Dos hereby undertake in an irrevocable and
unconditional manner, as long as this document is in effect,
not to encumber and/or transfer in any manner the Shares of
Embotelladora Andina S.A. owned currently or in the future
except in the circumstances expressly provided by this
Agreement. This prohibition is granted in favor of The
Coca-Cola Company, Coca-Cola Interamerican Corporation and
Coca-Cola de Argentina S.A., for whom their representatives
already mentioned accept. This prohibition will be annotated
in the Shareholders Registry of Andina. Andina shall certify
this circumstance to the Custodian, as well as the eventual
total or partial termination of the prohibition.
It is expressly recognized that Freire and Freire Dos may
transfer Shares of Andina to their Wholly owned Subsidiaries
(the "Permitted Transferees"), provided that: (i) all the
Shares transferred to a Permitted Transferee will continue to
be subject to the provisions of this Agreement; and (ii) such
Permitted Transferee agrees in writing to comply with the
provisions of this Agreement. If a Permitted Transferee ceases
to be a Wholly owned Subsidiary of one of the Grantors, then
such Permitted Transferee must transfer all the Shares it owns
at that time to the Grantors or to another Permitted Transferee
of the Grantors.
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TENTH:
The Shares subject to the Option will be sold, assigned and
transferred free and clear from any lien, actual rights other
than those of ownership, interdiction, attachment, suit,
resolutory conditions and shareholders agreements, and shall be
fully paid to the issuing company or respective assignees,
being the sellers jointly and severally liable for its
regularization pursuant to law. All of the above said
notwithstanding those liens, interdictions or restrictions
authorized by The Coca-Cola Company or placed in favor of The
Coca-Cola Company, Coca-Cola Interamerican Corporation and/or
Coca-Cola de Argentina S.A. or of their parent companies,
direct or indirect, or their Authorized Successors,
particularly, notwithstanding the restrictions on the transfer
of the shares set forth in the "Shareholders Agreement."
ELEVENTH:
Likewise, hereby and through this contract, Mr. Jose Said
Saffie and Mr. Jose Antonio Garces Silva, representing
Inversiones Freire Limitada and Inversiones Freire Dos
Limitada, also referred to as the Owners, and Mr. Diego Peralta
Valenzuela, representing Citibank N.A., also referred to as the
Custodian, hereby and through this contract enter into a
custody contract with respect to the Shares which are the
subject of the Option hereby conferred, and to all those Shares
comprised by said Option as provided in preceding clauses, to
be complied with in the Republic of Chile. For these purposes,
the Owners by this act deliver in custody the certificates that
make up the Shares which they own according to the first clause
of this Agreement, which are received by Citibank as a
Custodian, thus remaining in its keeping.
The Custodian will not be responsible for any loss or damage
resulting from circumstances or causes beyond its control,
including without limitation, nationalization, expropriation,
acts of war, terrorism, insurrection, revolution, civil unrest,
public gatherings or strikes by personnel that do not belong to
the Custodian or force majeure.
This Custody contract shall be subject to the following terms:
(a) In the event of an exchange, change or replacement of all
or some of the Share certificates received in custody for any
reason, the Custodian shall be broadly empowered, under
irrevocable power, to withdraw, on behalf of the Owners,
without the previous instructions of one or more of the Owners
or the Beneficiaries Shares, the new stock certificates to be
issued to that effect, all of which shall become subject to
this custody contract. However, once the exchange of Andina
ordinary Shares for Series A and B shares is effected, the
Custodian will immediately exercise on behalf of the Owners
such exchange and the Owners will be authorized to withdraw
from the custody the Series B share certificates, and the
Custodian will retain the custody over the rest of the Shares
of Andina of the Owners.
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(b) In case of the subscription of new Shares of Embotelladora
Andina S.A. by the Owners, the Custodian shall be broadly
empowered, under irrevocable mandate, to withdraw on behalf of
the Owners, with the previous instruction of one or more of the
Owners or of the Beneficiaries, the certificates of the
subscribed Shares, all of which shall become subject to this
custody contract. In case of Embotelladora Andina S.A.'s split-
up, the Custodian is broadly empowered, under irrevocable
power, to withdraw on behalf of the Owners, with the previous
instructions of one or more of the Owners or of the
Beneficiaries, the Share certificates of the new company or
companies to be organized and which correspond to the Shares of
Andina owned by the Owners, all of which shall become subject
to this custody contract. Likewise, in case of a merger of
Embotelladora Andina S.A., the Custodian shall be broadly
empowered, under irrevocable mandate, to withdraw on behalf of
the Owners, without previous instructions of one or more of the
Owners or of the Beneficiaries, the Share certificates of the
surviving company or of the new company to be organized and
which replace Shares of Embotelladora Andina S.A. that
corresponded to them, all of which shall become subject to this
custody contract.
(c) This custody contract shall extend, likewise, to Shares of
Embotelladora Andina S.A. that the Owners purchase from third
parties other than Embotelladora Andina S.A., in which case the
Owners shall immediately submit the appropriate certificates to
the Custodian.
(d) The Custodian shall be obligated to receive and keep the
titles subject to this custody and to indefinitely keep them
under its custody and may neither submit them to third parties
nor return them to the Owners, unless the latter submit a
public written statement issued by a representative with
sufficient powers of one or more of the Beneficiaries.
Notwithstanding, the Custodian commits himself to submit each
and every one of the certificates in custody to The Coca-Cola
Company, Coca-Cola Interamerican Corporation and Coca-Cola de
Argentina S.A. at the request of any one of them for it, who,
to that effect, shall simply submit a written statement in
which any one of them affirms that an Exercise Condition has
occurred, that an Exercise Option Process was initiated, that a
Valuation Price was determined (indicating its amount) and that
it has decided to irrevocably exercise the Option provided by
this contract.
The Custodian will immediately notify the Grantors that it has
delivered the Share certificates of Andina to the
Beneficiaries.
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(e) The Custodian is committed to periodically inform (each
quarter) The Coca-Cola Company, Coca-Cola Interamerican
Corporation and Coca-Cola de Argentina S.A. in respect of those
Share certificates of the Owners which pursuant to this
contract are under its custody, as well as to inform them
without delay of each communication received from the Owners in
accordance with this clause. The granting of this custody
agreement shall not result in a limitation upon the Owners in
respect of their rights as holders of the Shares subject to
this Agreement other than the rights to encumber and dispose of
the indicated Shares. In other words, the Owners, freely,
without intervention of the Custodian or authorization of the
Beneficiaries, shall be able to charge and receive dividends,
vote at shareholders meetings according to this document,
subscribe increases of capital and assign subscription options
with respect to capital increases.
(f) The Custodian will deliver the Option Shares to the
Grantors in the event that this Agreement terminates pursuant
to clause eight of this document and as long as a letter is
presented to it confirming such circumstance signed by a legal
representative of the Beneficiaries.
(g) In compliance with the obligations of the Custodian
pursuant to this Agreement, the Custodian only may act and is
hereby authorized to rely on and take action pursuant to the
Instructions, which means instructions of any Authorized Person
(as hereinafter defined), received by the Custodian in the
manner mentioned for each case, on the understanding that:
(i) The Instructions will continue to be in effect until
they are executed, canceled or replaced;
(ii) If in the judgment of the Custodian the Instructions
are not clear or are ambiguous, the Custodian may
exercise its best efforts to seek clarification. If
such clarification is not obtained in reasonable
time, the Custodian may, at its reasonable discretion
and without responsibility of any nature, fail to
comply until any ambiguity has been clarified to its
satisfaction;
(iii) The Instructions will be complied with pursuant
to the rules, operational procedures and market
practice in the place where they have to be carried
out and they may be executed by the Custodian only
during working hours and days in which the respective
financial markets are open to the public. The
Custodian may also fail to execute any instructions
that, in its opinion, are contrary to any applicable
law, regulation or ruling, if its source is a
governmental authority or self-regulatory authority,
giving notice to the Owners and the Beneficiaries;
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(iv) The Custodian is empowered to rely upon the powers of
any Authorized Person, until the Custodian is
notified to the contrary by the Owners or the
Beneficiaries, as applicable; and
(v) The term "Authorized Persons" means any executive,
employee or agent of the Owners or the Beneficiaries,
as applicable, that has been authorized in writing
sent to the Custodian to act on behalf of the Owners
or the Beneficiaries, in connection with any action,
affairs or obligations in accordance with this
contract.
(h) The Owners and Beneficiaries will indemnify the Custodian
and each one of its designees or agents and will keep them
indemnified with respect to all costs, responsibilities and
expenses, including without limitation, legal fees of lawyers
and disbursements, that directly or indirectly arise from the
execution by the Custodian, its designees or agents of the
Instructions that in good faith are believed to be given by
Authorized Persons.
Notwithstanding the above, neither the Custodian nor its
designees or agents shall be indemnified with respect to any
loss that arises from its own negligence.
(i) For the rendering of the services mentioned in this
agreement, the Owners will pay to the Custodian the commissions
listed in the Commission Annex (the "Annex") to this Agreement,
which duly signed by the parties will be deemed to be a part of
the same.
The time of payment and manner of calculation of the
commissions is established in the Annex. The Owners hereby
empower the Custodian to debit any of their bank accounts for
the amounts and at the time needed to obtain the payment of
commissions owed. For this purpose, the Owners undertake to
maintain in their bank accounts necessary funds to make such
payment. The commissions to be paid to the Custodian will be
subject to the Value Added Tax (I.V.A.), as in effect at the
time of the billing, which would be charged to the Owners. At
the time of payment of the commissions, the Custodian will
issue to the Owners the respective bill for the amount of
commissions paid for the respective period. Likewise, the
Owners will bear any tax that could be applicable in the future
on such commissions, and in general, the services mentioned in
this Agreement.
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The Beneficiaries expressly accept the provisions in their favor
and for their benefit made by the Owners and the Custodian in
this clause Eleventh, in a manner that such Beneficiaries are
empowered to enforce the obligations acquired by them in their
favor. Likewise, the Owners, the Custodian and the Beneficiaries
agree and accept that the provisions of this custody agreement
are irrevocable.
The Beneficiaries and the Owners may agree in writing on the
anticipated termination of this custody agreement.
TWELFTH:
Notary expenses derived from this contract shall be at the
expense of the Grantors and the Beneficiaries in equal parts.
THIRTEENTH:
If a dispute arises in relation to this Agreement or its
amendments, with respect to its construction, fulfillment,
enforceability, termination or otherwise, and it is not
resolved by voluntary agreement of the parties, such dispute
shall be determined finally through arbitration according to
the provisions of this clause. If such a dispute should arise,
any of the parties shall be able at any time to deliver a
written notice to the other party setting forth its intention
of submitting such conflict to arbitration. The party which
has sent said notice shall have the right to submit directly
the conflict to arbitration within a period of time of fifteen
(15) to forty five (45) days after such notice is received.
The party who submits the dispute to arbitration will deliver
immediately a written notice to the other party. All and any
other disputes that could arise between the parties as a result
of this Agreement for any reason including but not limited to
those relating to its legality, enforceability, construction
and fulfillment (included the competence of the arbitrator)
will be resolved by arbitrators who shall grant their
resolution according to provisions of law (arbitrators of law)
and who will be empowered to act at all times they are
requested. There will not be any appeal of the decision of the
arbitrators. Unless the parties agree to the contrary, the
arbitrators shall be able to determine freely the procedures to
follow during the arbitration (arbitrators in the procedure).
The dispute subject to arbitration will be decided by three
arbitrators having each party to select an arbitrator, and the
third one shall be selected by the two arbitrators appointed by
the parties. Decisions of the arbitrators will be taken by the
simple majority of the members of the arbitration tribunal. If
any of the parties does not comply with the designation of its
arbitrator within 10 days from the date of notification of
request of arbitration executed by the other party, or if the
two arbitrators selected by the parties within the 10 days
after the date of their appointment do not comply with the
designation of the third arbitrator, the designation of the
remaining arbitrator will be effected through the system
established by the Arbitration Center of the Chamber of
Commerce of Santiago A.G., coming from the list of their affiliated
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arbitrators and having the designation to fall on a lawyer.
The arbitrators shall have a complete understanding of
the English language. The arbitration tribunal must function
in Santiago, Republic of Chile. The above procedure shall be
repeated as many times as it is necessary until the three
arbitrators or their alternates, in the event they are unable
to exercise their offices, are designated. The indicated
arbitrators will resolve definitively the controversies.
FOURTEENTH:
This Agreement shall be amended in whole or in part only by a
written document executed by the parties. It shall not be
understood that there is a waiver to a right, implicit or
explicit stipulated in this Agreement, because of the lack of
exercise of said right by any of the parties. All and any
waivers shall be in writing and must be granted by the party in
favor of whom that right is established.
FIFTEENTH:
Any and all of the notices, requests or other communications
between the parties or as established in this instrument shall
be delivered in writing through personal service or by
registered or certified mail, postage prepaid addressed to the
specified addressees at the addresses established in the
appearance of this instrument or under their signatures or at
such other addresses that the specified addressees designate in
written notice to the parties to this Agreement. Each notice
given in this manner will be effective upon its receipt. A
notice shall be considered to have been given when it has been
delivered personally or after five days it has been mailed by
certified mail, return receipt requested, unless the receiving
party demonstrates that it has not received it or that it
received it on a subsequent date.
If to Grantors: Inversiones Freire Limitada
Attention: Portaluppi, Guzman y Bezanilla
Huerfanos 863, Piso 9
Santiago, Chile
Telefax No.: 562/638/3934
With a copy to: Embotelladora Andina S.A.
Avenida Andres Bello No. 2687 Piso 20
Casilla 7187
Santiago, Chile
Attention: Executive Vice President
Telefax No.: 562/338/0510
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If to any of
the Beneficiaries: The Coca-Cola Company
One Coca-Cola Plaza, N.W.
Atlanta, Georgia 30313
Attention: Chief Financial Officer
Telefax No.: (404) 676-8683
with a copy to: The Coca-Cola Company
One Coca-Cola Plaza, N.W.
Atlanta, Georgia 30313
Attention: General Counsel
Telefax No.: (404) 676-6209
If to Custodian: Citibank, N.A.
Avenida Andres Bello No. 2687, Piso 7
Casilla 2125
Santiago, Chile
Attention: Transaction Banking Head
Telefax No.: 562/338/8138
SIXTEENTH:
The parties agree that in connection with the entering into of
this Agreement they have been advised by Chilean counsel and
that, understanding the legal principles applicable to the
option Agreement, they declare that it is their understanding
and conviction that this Agreement is valid and enforceable
pursuant to its terms, in accordance with Chilean law.
Likewise, the parties agree that nothing provided in this
Agreement has as its purpose nor will have the effect of
modifying in any manner the terms and provisions of the
bottling agreements between The Coca-Cola Company and Andina or
any of its affiliates or subsidiaries. In the event of
discrepancies between this document and the bottling agreements
already mentioned, the terms and provisions of the bottling
agreements will prevail with respect to the rights and
obligations contemplated in the bottling agreements.
SEVENTEENTH:
Mr. Jose Said Saffie and Mr. Jose Antonio Garces Silva,
representing as mentioned, Embotelladora Andina S.A., hereby
declare that for all legal purposes that are applicable they
have taken due notice of the provisions of this Agreement.
EIGHTEENTH:
This Agreement is executed in six copies on the same date,
maintaining one copy for each of the signees.
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/s/ JOSE SAID SAFFIE
/s/ JOSE ANTONIO GARCES SILVA /s/ WELDON JOHNSON
Jose Said Saffie Weldon Johnson
Jose Antonio Garces Silva The Coca-Cola Company
Inversiones Freire Limitada
/s/ JOSE SAID SAFFIE
/s/ JOSE ANTONIO GARCES SILVA /s/ WELDON JOHNSON
Jose Said Saffie Weldon Johnson
Jose Antonio Garces Silva Coca-Cola Interamerican
Corporation
Inversiones Freire Dos Limitada
/s/ JOSE SAID SAFFIE
/s/ JOSE ANTONIO GARCES SILVA /s/ FERNANDO MARIN DIAZ
Jose Said Saffie Fernando Marin Diaz
Jose Antonio Garces Silva Coca-Cola de Argentina S.A.
Embotelladora Andina S.A.
/s/ DIEGO PERALTA VALENZUELA
Diego Peralta Valenzuela
Citibank N.A.
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The undersigned represents that the foregoing translation of the
Stock Purchase Option Agreement and Custody Agreement is a fair and
accurate English translation of such document.
/s/ CAROL CROFOOT HAYES
Carol Crofoot Hayes
Senior Finance Counsel and
Assistant Secretary
EXHIBIT 99.6
[ENGLISH TRANSLATION]
Form of Amendments
to Estatutos of Embotelladora Andina S.A.
EMBOTELLADORA ANDINA S.A.
EXTRAORDINARY GENERAL STOCKHOLDERS MEETING
In Santiago, Chile, on the ----- of ----------, 1996, at -------,
at the Company's offices located at Avenida Carlos Valdovinos
No. 560, Borough of San Joaquin, the Extraordinary General
Stockholders Meeting of EMBOTELLADORA ANDINA S.A. was held, as
called by Board of Director's agreement.
* * * * *
PURPOSE OF THE MEETING
The Chairman announced that the purpose of this Meeting was to
submit to the shareholders for their consideration, as per the
call, the Board's proposals with respect to the following
matters:
1) Terminate, with respect to the part not subscribed nor paid
at this date, the balance of the capital increase of
Embotelladora Andina S.A. approved by the General Extraordinary
Shareholders Meeting on April 20, 1994, and amended by
resolutions adopted at the General Extraordinary Shareholders
Meeting on October 25, 1994.
2) Increase the corporate capital of the Company by an amount
no lower than 101,695,000,000 Chilean pesos which increase
shall be carried out in one stage on a date the Board determines,
which determination the Board must effect within a period of one
year from the date of this Meeting, through the issuance of
up to 43,000,000 payable shares, without par value, which shall
be issued to be paid in cash, exclusively by the Company's
shareholders or their assignees entitled to them, at a price per
share determined by the Board. The Meeting must set the definitive
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amount of the capital increase and the final number of payable
shares to be issued, delegate to the Board the power to fix the
final price of the shares offering pursuant to the last paragraph
of Article 28 of the Regulations of the Law of Corporations, and
empower the Board to determine the date and conditions of the stock
issuance and address certain other matters concerning said capital
increase, including the procedures to be observed with respect to
the placement of fractional shares resulting from the proration
among the Company's stockholders of the preemptive rights to
purchase shares and the placement of shares not subscribed or
timely paid, including the power to determine that these shares
not be placed, and the term and procedures for the transfer of
stock subscription options to be issued in the capital
increase. The funds obtained as a result of said capital
increase shall be allocated to acquire shares of the minority
shareholders of the Company's subsidiary in the Republic of
Argentina, Embotelladoras del Atlantico S.A., and to finance a
capital increase to be effected by a subsidiary of the Company
in the Republic of Argentina, Inversiones del Atlantico S.A.,
which subsidiary shall use those funds to acquire 78.7% of the
stock currently issued by the company Inti S.A. Industrial y
Comercial, and 100% of the stock presently issued by the
company Complejo Industrial Pet S.A. Inti S.A. Industrial y
Comercial is Coca-Cola's bottling company in the Province of
Cordoba, Republic of Argentina. Complejo Industrial Pet S.A.,
located in the city of Buenos Aires, Republic of Argentina, is
a bottle manufacturing company which supplies products to the
various Coca-Cola bottlers in the Republic of Argentina.
3) Divide the corporate capital into two series of stock, both
Preferred, without par value, whose number, features, rights
and privileges are indicated hereunder: A) The Series A shall
be comprised of 395,595,788 shares; and the Series B shall be
comprised of 395,595,788 shares. B) The preference of Series A
shares shall consist only in the right to elect six of the
seven Regular Directors of the Company, along with their
respective Alternates. The preference of Series B shares shall
consist only in the right to receive all and any of the
dividends which per each share the Company distributes, whether
interim, definitive, minimum mandatory, additional, or
eventual, increased by 10%. C) If in the future because of an
exchange of shares, distribution of fully paid shares or
issuance of cash shares or because of any other reason or cause
the number of shares of Series A and/or B were to increase or
decrease, such event shall not alter under any circumstance the
privileges and rights of such shares set forth in these
by-laws. If as a result of the special exchange of
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shares agreed to at the Extraordinary General Stockholders Meeting
of Embotelladora Andina S.A. called by this notice the number of
Series A shares were to decrease to less than 200,000,000
shares, the Series A and B shall become void, and the shares
which comprise them automatically would become common shares
without any preference whatsoever, eliminating the division
into series of shares. D) The preferences of Series A and B
shares shall be in effect until December 31, 2130. Once this
period has expired, Series A and B shall become void and the
shares which comprise them shall automatically become common
shares without any preference whatsoever, eliminating the
division into series of shares. E) The preferences of Series A
and B shares shall be in effect even though such shares, wholly
or partly, are transferred. F) Series A shares shall be
entitled to full voting rights without limitation. G) Series B
shares shall be entitled to limited voting rights, able to vote
only in respect of the following matter: the election of a
Regular Director for the Company and his respective Alternate.
This division of the corporate capital into two series of
shares shall be effected after the period to subscribe and pay
the cash share issuance mentioned under preceding paragraph "2"
expires, through the increase in the number of the Company's
shares from 395,595,788 to 791,191,576, for whose purpose the
shareholders would exchange their stock titles for new stock
titles Series A and B, entitling each shareholder to receive
one Series A share and one Series B share for each share they
hold as of the fifth business day prior to the day the Board
sets for the exchange, having the Meeting to determine the
periods during which this exchange shall take place and
empowering the Board to set the date for same.
4) During the three years from the date on which the capital
increase and exchange of shares previously indicated under the
preceding paragraphs "2" and "3" are effected, it is proposed
to establish a special exchange of Series A shares for Series B
shares of Embotelladora Andina S.A., which shall be offered by
the Board to the Series A shareholders, with up to four
exchange periods all to be effected within the period the
Meeting sets, having the assembly to set also the duration for
each exchange period. This special exchange would be voluntary,
the Series A shareholders being able to exchange all or some of
their shares of said series at their sole discretion.
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5) Increase the number of the Company's Directors, from five
regular and Alternate members, to seven regular members and
their respective Alternates, setting forth temporary rules to
constitute the Board with the new number of members agreed to
by the Meeting.
6) Modify the manner in which the Company's net profits are
distributed.
7) Delete all transitory articles which are no longer in force
and add the new transitory provisions necessary to carry out
the amendments agreed to at the Meeting.
For the purposes previously indicated, permanent articles
fifth, seventh, twenty third and twenty ninth of the corporate
by-laws shall be modified, and all the agreements necessary to
formalize and effect the resolutions reached by the assembly
shall be adopted.
REPORT BY THE CHAIRMAN TO THE STOCKHOLDERS
Mr. Jose Said requested that the stockholders approve at the
proper time the report just submitted to the assembly,
indicating that next submitted for the consideration and
approval of the Meeting would be the concrete agreements
necessary to adopt the proposed statutory amendments.
The Chairman expressed to the stockholders that the Company's
Board, in session held on the ------- of --------------- of
this year, agreed to call this Special Stockholders Assembly,
in order to propose to the Meeting the amendments to the
corporate by-laws which he explains next:
AGREEMENT FIRST:
Approve the report with respect to the amendments to the
corporate by-laws proposed by the Board which the Chairman has
submitted to the assembly, which report is included in the
minutes of this Meeting and is for all purposes understood to
form an integral part of this "Agreement First".
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AGREEMENT SECOND:
Invalidate, with respect to that portion neither subscribed nor
paid as of the date of this Meeting, the capital increase
balance of Embotelladora Andina S.A. agreed to at the
Extraordinary General Stockholders Meeting held on April 20,
1994, whose minutes were converted into public deed on May 12,
1994 at the Notary for Santiago of Mr. Jose Musalem Saffie, and
modified as per agreements reached at Extraordinary General
Stockholders Meeting held on October 25, 1994, whose minutes
were converted into public deed on October 28, 1994 at the
Notary for Santiago of Mr. Jose Musalem Saffie.
Therefore, the corporate capital is set in the amount
subscribed and paid as of the date of this Meeting:
80,486,421,000 Chilean pesos divided into 352,595,788
registered shares, without par value, all of one and the same
series, without any privilege whatsoever.
AGREEMENT THIRD:
Approve the amendments to the corporate by-laws as provided in
the Chairman's report, for whose purpose it is agreed to
substitute articles fifth, seventh, twenty third and twenty
ninth permanent from the corporate by-laws in the manner
indicated hereunder, agreeing furthermore to eliminate all
articles transitory since they are no longer valid, and add
onto the same the new articles transitory indicated next.
Thus, the wording that would be approved for the aforementioned
statutory provisions permanent and transitory is as follows:
ARTICLE FIFTH:
The Company's capital is 182,181,421,000 Chilean pesos divided
into two series of shares, denominated Series A and Series B
both Preferred, all without par value, whose number, features,
rights and privileges are indicated in the following letters:
A) Series A will be formed by 395,595,788 shares; and Series B
will be formed by 395,595,788 shares.
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B) The preference of the Series A shares shall consist only in
the right to elect six out of the seven Regular Directors of
the Company, along with their respective Alternates.
The preference of the Series B shares shall consist only in the
right to receive all and any of the dividends which per Series
A share the Company distributes, whether temporary, definite,
minimum mandatory, additional, or eventual, increased by 10%.
C) If in the future because of an exchange of shares,
distribution of fully paid shares or issuance of cash shares or
because of any other reason or cause the number of shares of
Series A and/or B were to increase or decrease, such event
shall not alter under any circumstance the privileges and
rights of such shares as set forth in these by-laws.
If as a result of the special exchange of shares agreed to at
the Extraordinary General Stockholders Meeting of Embotelladora
Andina S.A. held on the ----------- of -----------, 1996, to
which "Article Fourth Transitory" of these by-laws refers,
which transitory provision was added to the by-laws at the
Meeting just mentioned, the number of Series A shares were to
decrease to less than 200,000,000 shares, the Series A and B
shall become void, and the shares which comprise them
automatically shall become common shares without any preference
whatsoever, eliminating the division into series of shares.
D) The preferences of Series A and B shares shall be in effect
until December 31, 2130. Once this period has expired, Series A
and B shall become void and the shares which comprise them
shall automatically become common shares without any preference
whatsoever, eliminating the division into series of shares.
E) The preferences of Series A and B shares shall be in effect
even though the shares of such series, wholly or partly, are
transferred.
F) Series A shares shall be entitled to full voting rights
without limitation.
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G) Series B shares shall be entitled to limited voting rights,
able to vote only in respect of the following matter: the
election of a Regular Director for the Company and the
respective Alternate, pursuant to Article Seventh of these by-
laws.
ARTICLE SEVENTH:
The Company shall be administered by a Board comprised of seven
regular members, each of whom shall have a respective
Alternate.
The Directors may or may not be shareholders, shall be in
office for three years and may be indefinitely reelected.
The Directors shall be elected by the Series A and B shares in
separate voting as follows: Series A shares shall elect six
regular Directors and their respective Alternates and Series B
shares shall elect one regular Director and his respective
Alternate.
ARTICLE TWENTY THIRD: Only the holders of shares registered in
the Shareholders Registry five days in advance of the date of
the respective Shareholders' Meeting shall be entitled to
participate in such meeting and exercise their voting rights
and their rights to express their views at such meeting. The
shareholders shall be entitled to one vote per each share they
own or represent and shall be entitled to cumulate or
distribute their votes, at their convenience, notwithstanding
the restrictions on the right to vote those shares comprising
Series B of Preferred Stock, as stipulated in letter "G" under
Article Fifth in these by-laws, and notwithstanding,
furthermore, the restrictions on the right to vote shares owned
by Mutual Funds.
ARTICLE TWENTY NINTH: There shall be allocated from the net
profits of the period: a) A portion equal to at least 30% of
such net profits, to be distributed in cash as a dividend among
the Series A and B shareholders, on a pro rata basis; b) A
sufficient portion shall be allocated to increase the dividend
which as per the foregoing clause Series B may be entitled, in
the necessary amount to comply with the preference of the
Series B described in paragraph "B" under Article Fifth in
these by-laws; c) The remaining profit which the meeting agrees
not to distribute as a dividend during the period shall
be allocated to create the reserve fund that the same
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Shareholders Meeting may determine, such balance also being able
to be allocated to pay possible dividends in future periods.
Insofar as the amounts agreed to be paid as a higher dividend
exceed that of the mandatory minimum referred to in the foregoing
clause "a", the shareholders shall be given the option to
receive such dividends in cash, fully paid shares issued by the
Company or in stock of open corporations held by the Company.
The portion of the profits the Meeting has agreed not to be
allocated for the payment of dividends may be capitalized at
any time after the by-laws have been amended.
ARTICLE TRANSITORY FIRST: At Embotelladora Andina S.A.'s
Extraordinary Shareholders Meeting held on ----------- of -----
- ------------, 1996, the corporate by-laws were modified,
increasing the number of Directors from five regular Directors
and their corresponding Alternates to seven regular Directors
and their corresponding Alternates.
The constitution of the Board with the new number of Directors
shall take place at the first meeting the Board currently in
office holds within the month following the month in which the
agreements reached at the Extraordinary Shareholders Meeting
referred to at the beginning of this provision transitory are
fully legalized; that is, the minutes of the aforementioned
Meeting are converted into public deed and its excerpt
registered at the Registry of Commerce and published in the
Official Gazette. At the meeting mentioned above, the Board
shall appoint two new regular Directors and their corresponding
Alternates; thus, the Board shall be comprised of seven regular
members and their corresponding Alternates.
Until the aforementioned Board meeting is held, the Company's
Board shall continue holding meetings with its five current
regular members or their corresponding Alternates, having the
power and authority to adopt agreements with the supporting
votes of at least three of its members with the right to vote.
The Board constituted as mentioned above shall be in office
until the date of the next General Shareholders Meeting to be
held by the Company after the date on which the Series A and B
shares are issued, to which issuance statutory "Article
Transitory Second" refers, and at said meeting the Company's
total number of Directors shall be elected in the manner set
forth under the permanent articles of these by-laws.
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ARTICLE TRANSITORY SECOND: The General Extraordinary
Shareholders Meeting of Embotelladora Andina S.A., held on ----
- --- of --------------, 1996, resolved to terminate, with
respect to the part not subscribed nor paid up to the date of
the Shareholders Meeting mentioned, the capital increase of the
Company approved at the Extraordinary Shareholders Meeting
dated April 20, 1994, whose minutes were converted into a
public deed document dated May 12, 1994 in the Notary of
Santiago of Jose Musalem Saffie, amended by the agreements
adopted at the General Extraordinary Shareholders Meeting held
on October 25, 1994, whose minutes were converted into a public
deed document dated October 28, 1994 in the Notary of Santiago
of Jose Musalem Saffie. Consequently, at the date of the
Extraordinary Shareholders Meeting mentioned at the beginning
of this paragraph, the stock capital was fixed in the amount
subscribed and paid up to such date: 80,486,421,000 Chilean
pesos divided into 352,595,788 registry shares, without nominal
value, all belonging to one and the same series, without any
preference.
In addition at the same Extraordinary Shareholders Meeting
mentioned at the beginning of this transitory article, it was
agreed to increase the corporate capital stock from
80,486,421,000 Chilean pesos to 182,181,421,000 Chilean pesos,
and divide such capital into two series of shares, which shall
be effected as follows:
A) Capital increase: The increase of capital from
80,486,421,000 Chilean pesos divided into 352,595,788 shares
without par value to 182,181,421,000 Chilean pesos divided into
395,595,788 shares without par value, agreed upon at the
Extraordinary Shareholders Meeting mentioned at the beginning
of this provision transitory, shall be effected, completed and
paid as follows:
Through the issuance in one stage of 43,000,000 new shares,
without par value, the resolutions with respect to which the
Board shall adopt within two months from the date of the
Extraordinary Shareholders Meeting mentioned at the beginning
of this provision transitory.
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These 43,000,000 shares shall be issued to be paid in cash,
exclusively by the Company's shareholders entitled to subscribe
them or their assignees, at a price per share determined by
the Board according to the powers delegated by the General
Extraordinary Shareholders Meeting cited at the beginning of
this transitory provision, pursuant to the provisions of the
last paragraph of Article 28 of the Regulations of the Law of
Corporations. Those shareholders who are shareholders as of the
fifth business day prior to the day the subscription option
notice is published shall be entitled to a preemptive right to
subscribe such shares in the percentage of the shares they own
as of such date. The shares to be subscribed by each
shareholder, according to his respective percentage, shall be
paid in the same act of subscription, in one installment, in
cash or with a subscriber's check or a banker's check in favor
of the Company.
The Board of Directors may decide whether or not to sell the
shares not subscribed by the shareholders or their assignees,
entitled to them within a period of 30 consecutive days from
the date the notice is published communicating to the
shareholders the commencement period for the subscription
option, or any fractional shares arising from the proration of
preemptive rights among the shareholders. If the Board decides
to sell such shares, such shares must be sold at the same price
and upon the same conditions as previously offered to the
shareholders of the Company, for which purpose the following
procedure will be applied: a.1) At the time of exercise of the
preferred option for subscription, the shareholder or the
assignee interested in acquiring such shares must inform its
intention in writing to the Chairman of the Company, indicating
the number of additional shares that such shareholder desires
to subscribe. a.2) On the second business day following the
date on which the preferred option would terminate, at 12:00
noon at the offices of the Shares Department of the Company,
street --------------- No. --------, Township ---------------,
the President of the Company, or his substitute, will assign
the shares among the interested persons that have informed
their intention to subscribe in the manner mentioned in
paragraph "a.1". If there are not sufficient shares to satisfy
all the offers of subscription, the shares will be assigned to
the interested parties on a pro rata basis based upon the
number of shares of the Company that each one of them has
subscribed in the preferred option period of the issuance and
considering the number of additional shares that each
shareholder has requested to subscribe. a.3) The interested
party that has been assigned the shares must subscribe and pay
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for them, in cash or by a bank check or a bank draft to the
order of the Company, executing the subscription agreement in
the Department of Shares of the Company within 5 banking days
from the following date on which the President of the Company
or his substitute has made the assignment making distribution
of the shares, as indicated in paragraph "a.2" above. a.4)
Once the procedure mentioned in "a.1", "a.2" and "a.3" has
concluded, if there are still shares that have not been
subscribed in due course by the shareholders or their assignees
or there are fractional shares resulting from proration the
Board may freely offer them to the shareholders of the Company
that be determined, at the same price and conditions of the
issuance, all within the term of 30 consecutive days counted
from the following date to the date on which the procedure
mentioned in paragraph "a.4" is concluded. The number of
shares that will be offered to the shareholders by the Board
according to this procedure will be determined by the Board in
its discretion. The shareholders to whom the Board offers the
shares already mentioned, if they decide to accept the offer,
must subscribe and pay the shares offered within five banking
days counted from the date of the notice by which the Board has
made the offer, the payment must be made at the time of the
subscription of shares, in cash, bank check or bank draft to
the order of the Company, signing the respective subscription
agreement in the Department of Shares of the Company. a.5)
Once the procedure mentioned in the preceding a.4, is completed
and there are shares not subscribed, the issuance of the same
will terminate.
If the Board decides not to sell the fractional shares
resulting from proration and the shares that have not been
subscribed by the shareholders or their assignees during the
preferred option period, the issuance of the same will
terminate.
The shareholders may transfer all or part of their option right
to subscribe the shares to which they are entitled, which
transfer must be effected through private deed signed by the
assignor and the assignee in the presence of either two adult-
age witnesses or a Stock Exchange broker or a Notary Public.
The assignment may also be made through a public deed signed by
the assignor and the assignee. For purposes of the above,
those shareholders who deem it convenient to assign their
option may request, should they desire, from the Company's
Shares Department, a certificate evidencing such preemptive
option right. The assignment of option right shall only be
effective with respect to the Company and third parties when the
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Company acknowledges same, and the assignee shall deliver
to the Company's Shares Department the public or private deed
of assignment, attaching to such assignment the above mentioned
certificate, in case such assignment had been requested and
withdrawn from the Company by the assignor. In all events, the
assignee of a preemptive option right shall subscribe and pay
the shares to which he is entitled pursuant to the assignment
within the same term which the respective option right assignor
had. Should the assignee not exercise his right within the
above mentioned term, it shall be understood that he waives it.
The current capital increase must be paid within the term that
expires on March ---, 1997.
The Board of Directors shall be fully empowered to adopt all
the agreements necessary to carry out this capital increase.
B) Formation of Series A and B Shares: Once the term for
subscribing and paying the issuance of shares referred to under
letter "A" above has expired, the formation of Series A and B
shares will take place and the number of Company shares shall
be increased from 395,595,788 to 791,191,576 for which the
shareholders' stock certificates shall be exchanged for new
certificates of Series A and B, each shareholder being entitled
to receive a Series A share and a Series B share per each share
held as of the fifth business day prior to the day which the
Board of Directors decides for this share exchange, the Board
of Directors having set the exchange date for a day within the
180 days since the date on which the term for subscribing and
paying the issuance of shares referred to under letter "A" of
this transitory article has expired, which is counted from
March ---, 1997. As of the exchange date, the stock
certificates which have theretofore been issued by the Company
shall become null and void.
The Board of Directors shall be fully empowered to adopt all
the agreements necessary to execute and effect the increase in
the number of shares and the exchange stated under the letter
above.
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After the completion of the operations stated under this
letter, the Company's paid-in capital shall be divided into
395,595,788 Series A shares and 395,595,788 Series B shares,
both series being Preferred.
The exchange operation described under this paragraph "B" shall
conclude, in all events, within ten months from the date of the
Meeting mentioned at the beginning of this transitory article.
ARTICLE THIRD TRANSITORY: The special exchange of
Embotelladora Andina S.A.'s Series A shares for Series B shares
which was agreed upon at said Company's Extraordinary General
Shareholders Meeting held on ---------------, 1996 shall be
effected as follows:
Within three years from the date on which the share
certificates of Series A and B shares are issued as a result of
the division of the share capital in two series of shares, as
described in letter B of Article Second Transitory, the
Company's Board of Directors shall agree and offer to the
Series A shareholders special exchanges for up to four exchange
periods, all of which must take place within the above
mentioned three-year term, in order that such shareholders may
exchange their Series A shares for Series B shares, upon the
following terms and conditions:
a) Entitled to effect these exchanges shall be the holders of
Series A shares as of the fifth business day prior to the day
which the Board of Directors sets for the beginning of the
respective share exchange period, periods which shall last for
60 consecutive days each. b) Each Series A share held by
shareholders as of the fifth business day stated under the
clause above shall be exchangeable to the Company for a Series
B share. c) The special exchanges dealt with in this
transitory provision shall be voluntary and the shareholders
may exchange all or part of the Series A shares they hold, at
their discretion, having to express their intent to effect the
exchange which they wish to make in writing to the Company. d)
During the special exchange periods mentioned under clause "a"
above, the Company shall report every first business day of
every week during each period to the Superintendency of
Securities and Insurance and the Stock Exchanges the results of
the exchange operations as of the date of the weekly report.
Within the week following the week in which each special
exchange operation is completed, the Company also shall report
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the final results of the same to the Superintendency of
Securities and Insurance and Stock Exchanges. e) The stock
certificates of the Series A shares which are exchanged for
Series B shares pursuant to the procedures set forth in this
transitory provision shall become void from the date of their
exchange. f) The Board of Directors shall be fully empowered
to adopt all the agreements necessary to implement the special
share exchanges provided by this transitory provision.
* * * * * * * *
The Chairman reported to the Meeting that pursuant to the
provisions of Article 69 of the Companies' Act No. 18.046, the
approval by this Meeting of the agreements on preferences for
Series A and B shares shall grant dissenting shareholders the
right to withdraw from Embotelladora Andina S.A. For purposes
of effecting this withdrawal right, dissenting shareholders
shall be deemed to be those shareholders who at this meeting
oppose the agreements on preferences previously mentioned, and
those shareholders who, not having attended the meeting,
express in writing their withdrawal from the Company within the
30-day period mentioned below. The price which is to be paid
for each share of Embotelladora Andina S.A. to the withdrawing
shareholders who exercise their right to withdraw shall be the
average weighted price of trades in Embotelladora Andina S.A.'s
stock during the months of July and August, 1996, that is,
$-------- per share. The right to withdraw may be exercised by
the dissenting shareholders within a period of 30 days starting
from the date this Meeting is held, the term of which shall
expire on the ----------- day of ------------------- of this
current year.
* * * * *
CORPORATE CAPITAL
Upon the Chairman's request, the Meeting agreed to leave on
record that after the amendments to the corporate by-laws
approved at this meeting, the Company's capital is comprised as
follows: Corporate capital 182,181,421,000 Chilean pesos
divided into 395,595,788 Series A shares and 395,595,788 Series
B shares, all of them without nominal value; Subscribed and
paid capital 80,486,421,000 Chilean pesos divided into
352,595,788 shares, without nominal value, all of them of a
same and single series, with no privilege at all.
* * * * *
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The undersigned represents that the foregoing translation of the
Form of Amendments to Estatutos of Embotelladora Andina S.A. is a fair
and accurate English translation of such document.
/s/ CAROL CROFOOT HAYES
Carol Crofoot Hayes
Senior Finance Counsel and
Assistant Secretary
EXHIBIT 99.7
EMBOTELLADORA ANDINA S.A.
September 5, 1996
The Coca-Cola Company
Coca-Cola Interamerican Corporation
Coca-Cola de Argentina S.A.
c/o The Coca-Cola Company
One Coca-Cola Plaza, N.W.
Atlanta, Georgia 30313
Citicorp Banking Corporation
Bottling Investment Limited
c/o Citicorp Banking Corporation
Avenida Andres Bello No. 2687 Piso 7
Santiago, Chile
Ladies and Gentlemen:
We refer to the Stock Purchase Agreement dated as of
September 5, 1996 (the "SPC Purchase Agreement") by and among
Embotelladora Andina S.A. ("Andina"), Inversiones del Atlantico
S.A. ("Atlantico"), Inversiones Freire Ltda. and Inversiones
Freire Dos Ltda. (collectively the "Majority Shareholders"), The
Coca-Cola Company ("KO"), Coca-Cola Interamerican Corporation
("Interamerican"), Coca-Cola de Argentina S.A. ("TCCC
Argentina"), Citicorp Banking Corporation ("Citicorp") and
Bottling Investment Limited ("SPC") and the Stock Purchase
Agreement dated as of September 5, 1996 by and among Andina, the
Majority Shareholders, Citicorp and SPC (the "SPC Purchase
Agreement" and together with the Andina Purchase Agreement, the
"Stock Purchase Agreements") pursuant to which (i) prior to a
recapitalization of the Andina common stock, SPC will acquire
24,000,000 newly issued shares of Andina common stock, (ii)
Interamerican and TCCC Argentina will acquire all of the
outstanding shares of capital stock of SPC, and (iii) Atlantico
will acquire (x) all of the outstanding shares of capital stock
of CIPET and (y) all of the shares of capital stock of INTI owned
by Interamerican. Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the
Stock Purchase Agreements.
The Andina Parties, KO, Interamerican, TCCC Argentina,
Citicorp and SPC hereby agree as follows:
1. From the date hereof until the Closing,
Andina agrees that, upon the request of TCCC
Argentina and Interamerican, TCCC Argentina and
Interamerican shall be entitled to jointly designate an
observer to attend meetings of the Board of Directors of
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September 5, 1996
Page 2
Andina; provided, however, that such observer shall be
excluded from such meetings at all times during which the
Board of Directors of Andina is discussing or considering
any of the transactions contemplated by the Stock Purchase
Agreements or the other Operative Agreements or any matter
related thereto. Andina shall provide such observer with
the same notice of meetings of the Board of Directors of
Andina as that provided to the directors.
2. Andina hereby agrees that if requested by any
director present at a meeting of the Board of Directors of
Andina, Andina will provide for the simultaneous translation
into English of the discussions and proceedings at such
meeting.
THIS LETTER AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
UNITED STATES OF AMERICA, WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAW PRINCIPLES THEREOF.
Notwithstanding anything to the contrary contained in the
Stock Purchase Agreements, the representations, warranties,
covenants and agreements contained in this letter agreement shall
survive the Closing without limitation as to time.
This letter agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to
be an original and all of which shall constitute one and the same
instrument.
If the foregoing is in accordance with your understanding of
our agreements, please sign and return to us a counterpart
hereof, whereupon this letter and your acceptance shall represent
a binding agreement among you and ourselves.
Very truly yours,
EMBOTELLADORA ANDINA S.A.
By: /s/ Jose Said S.
Name: Jose Said S.
Title: Chairman of the Board
By: /s/ Jose Antonio Garces
Name: Jose Antonio Garces
Title: Director
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September 5, 1996
Page 3
INVERSIONES DEL ATLANTICO S.A.
By: /s/ Jaime Garcia
/s/ Pedro Pellegrini
Name: Jaime Garcia/Pedro Pellegrini
Title: Attorneys-in-fact
INVERSIONES FREIRE LTDA.
By: /s/ Jose Said S.
Name: Jose Said S.
Title: Attorney-in-fact
By: /s/ Jose Antonio Garces
Name: Jose Antonio Garces
Title: Attorney-in-fact
INVERSIONES FREIRE DOS LTDA.
By: /s/ Jose Said S.
Name: Jose Said S.
Title: Attorney-in-fact
By: /s/ Jose Antonio Garces
Name: Jose Antonio Garces
Title: Attorney-in-fact
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September 5, 1996
Page 4
Agreed as of this 5th day of September, 1996:
THE COCA-COLA COMPANY
By: /s/ Weldon H. Johnson
Name: Weldon H. Johnson
Title: Senior Vice President
COCA-COLA INTERAMERICAN
CORPORATION
By: /s/ Weldon H. Johnson
Name: Weldon H. Johnson
Title: Vice President
COCA-COLA DE ARGENTINA S.A.
By: /s/ Fernando Marin
Name: Fernando Marin
Title: Attorney-in-fact
CITICORP BANKING CORPORATION
By: /s/ Diego Peralta V.
Name: Diego Peralta V.
Title: Authorized Officer
BOTTLING INVESTMENT LIMITED
By: /s/ Diego Peralta V.
Name: Diego Peralta V.
Title: Chairman of the Board
EXHIBIT 99.8
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) promulgated under the Securities
Exchange Act of 1934, as amended, the persons named below agree to the
joint filing on behalf of each of them of a Statement on Schedule 13D
(including amendments thereto) with respect to the Common Stock of
Embotelladora Andina S.A., and further agree that this Joint Filing
Agreement be included as an exhibit to such joint filing. Each party
to this Joint Filing Agreement expressly authorizes The Coca-Cola
Company to file on such party's behalf any and all amendments to such
Statement. Each such party undertakes to notify The Coca-Cola Company
of any changes giving rise to an obligation to file an amendment to
Schedule 13D and it is understood that in connection with this
Statement and all amendments thereto each such party shall be
responsible only for information supplied by such party.
In evidence thereof, the undersigned, being duly authorized,
hereby execute this Agreement this 13th day of September, 1996.
THE COCA-COLA COMPANY
By: /s/ JAMES E. CHESTNUT
James E. Chestnut
Senior Vice President and
Chief Financial Officer
COCA-COLA INTERAMERICAN CORPORATION
By: /s/ JAMES E. CHESTNUT
James E. Chestnut
Vice President and
Chief Financial Officer
THE COCA-COLA EXPORT CORPORATION
By: /s/ JAMES E. CHESTNUT
James E. Chestnut
Senior Vice President and
Chief Financial Officer
COCA-COLA DE ARGENTINA S.A.
By: /s/ GLENN JORDAN
Glenn Jordan
President
