SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 26, 1996
(Date of earliest event reported)
COCA-COLA ENTERPRISES INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-9300 58-0503352
(State of (Commission File No.) (IRS Employer
incorporation) Identification No.)
2500 Windy Ridge Parkway, Atlanta, Georgia 30339
(Address of principal executive offices, including zip code)
(770) 989-3000
(Registrant's telephone number, including area code)
Page 1 of 86 Pages
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Item 2. Acquisition or Disposition of Assets.
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On July 26, 1996, Coca-Cola Enterprises Inc. (the
"Company") completed the acquisition of bottling and canning
operations in France and Belgium previously owned by The
Coca-Cola Company, pursuant to a Stock Purchase Agreement (the
"Stock Purchase Agreement") by and among The Coca-Cola Export
Corporation, Varoise de Concentres S.A., Barlan Inc., Beverage
Products Limited, Bottling Holdings (International) Inc. (the
"Buyer"), The Coca-Cola Company and the Company.
The Buyer, a wholly owned subsidiary of the Company,
purchased substantially all of the capital stock of Coca-Cola
Beverages SA (French bottler) and all of the capital stock of
Coca-Cola Production SA (Belgian canner) and S.A. Beverages Sales
Holding NV (owner of the Belgian bottler). All sellers were
affiliates of The Coca-Cola Company. The Company guaranteed the
obligations of the Buyer under the Stock Purchase Agreement and
The Coca-Cola Company guaranteed the obligations of the sellers
under the Stock Purchase Agreement.
The total transaction value negotiated by the parties
was approximately $915 million, including cash in the aggregate
amount of approximately $686 million plus assumption of certain
obligations of the acquired companies.
Financing for the transaction was derived from a
combination of short-term bank borrowings and the issuance of
commercial paper. The Company will evaluate refinancing such
short-term bank borrowings and commercial paper on a long-term
basis.
The Coca-Cola Company owns approximately 45% of the
outstanding shares of the Company. M. Douglas Ivestor is
Chairman of the Board of Directors of the Company, and President
and a Director of The Coca-Cola Company. E. Neville Isdell is a
Director of the Company and Senior Vice President and President
of The Greater Europe Group of The Coca-Cola Company. Two other
Directors of the Company are former executive officers of The
Coca-Cola Company.
Additional information regarding this transaction and
the acquired company is set forth in the Stock Purchase Agreement
attached hereto as Exhibit 2.
Item 5. Other Events.
- ------ ------------
Pending Acquisitions.
The following acquisitions are pending as of the date
of this report; however, there can be no assurances that
unanticipated events will not prevent any such acquisitions from
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being completed. In addition, although no other material
acquisitions are pending currently, management of the Company
will continue to review opportunities for further acquisitions.
On May 28, 1996, the Company announced the signing of
letters of intent to acquire Coca-Cola Bottling Company West,
Inc. and Grand Forks Coca-Cola Bottling Company (collectively
"Coke West") for a transaction value of approximately $158
million. Coke West operates in franchise territories in portions
of Montana, Wyoming, North Dakota, South Dakota, and Minnesota.
This proposed transaction is expected to close during the third
quarter of 1996.
On June 4, 1996, the Company announced the signing of
letters of intent to purchase Coca-Cola & Schweppes Beverages
Limited from Cadbury Schweppes plc and The Coca-Cola Company for
a transaction value of approximately $1.9 billion. Coca-Cola &
Schweppes Beverages Limited produces products of The Coca-Cola
Company and Cadbury Schweppes plc for distribution in England,
Scotland, Wales, and the Isle of Man. This proposed transaction
is expected to close during the third quarter of 1996.
On July 17, 1996, the Company announced the signing of
a letter of intent with the majority shareholder of Nora
Beverages, Inc. to acquire the company for a total transaction
value expected to be approximately $117 million. Nora Beverages,
Inc. produces a high quality, pure Canadian spring water sold
under the trade name NAYA.
Each of the acquisitions described above will be
financed primarily through short-term bank borrowings and the
issuance of commercial paper. The Company will evaluate
refinancing such short-term borrowings and commercial paper on a
long-term basis.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired:
It is impracticable to provide the required financial
statements at this time. They will be filed as soon as they are
available, but not later than 60 days after the date this report
is due to be filed.
(b) Pro Forma Financial Information:
It is impracticable to provide the required pro forma
financial statements at this time. They will be filed as soon as
they are available, but not later than 60 days after the date
this report is due to be filed.
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(c) Exhibits: See the Exhibit Index on page 5 hereof.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
COCA-COLA ENTERPRISES INC.
(Registrant)
LOWRY F. KLINE
By:___________________________
Name: Lowry F. Kline
Title: General Counsel
Date: August 12, 1996
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COCA-COLA ENTERPRISES INC.
EXHIBIT INDEX
Exhibit No. Description Page No.
2 Stock Purchase Agreement by and 7
among The Coca-Cola Export
Corporation and Varoise de
Concentres S.A., Barlan Inc.,
Beverage Products Limited,
Bottling Holdings Inc., The
Coca-Cola Company, and the
Company dated as of July 26, 1996.
28 Press Release dated July 26, 1996. 86
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EXHIBIT 2
STOCK PURCHASE AGREEMENT
by and among
The Coca-Cola Export Corporation and
Varoise de Concentres S.A.
(the "CCBSA Sellers"),
Barlan Inc. (the "CCP Seller"),
Beverage Products Limited (the "BSH Seller"),
Bottling Holdings (International) Inc.
(the "Buyer"),
The Coca-Cola Company ("KO"), and
Coca-Cola Enterprises Inc. ("Enterprises")
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TABLE OF CONTENTS
PAGE
ARTICLE I PURCHASE AND SALE; CONSIDERATION . . . . . . . . 2
1.01 Purchase and Sale . . . . . . . . . . . . . . . . . . . . 2
1.02 Purchase Price . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLERS . 3
2.01 Power and Authority of Seller . . . . . . . . . . . . . . 3
2.02 Ownership of Shares; Voting . . . . . . . . . . . . . . . 4
ARTICLE III REPRESENTATIONS AND WARRANTIES CONCERNING
THE COMPANIES AND SUBSIDIARIES . . . . . . . . . 5
3.01 Organization and Authorization . . . . . . . . . . . . . . 5
3.02 Bottling Authorizations . . . . . . . . . . . . . . . . . 8
3.03 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 9
3.04 Financial Matters . . . . . . . . . . . . . . . . . . . . 9
3.05 Absence of Certain Changes and Events . . . . . . . . . 12
3.06 Tax and Social Security Matters . . . . . . . . . . . . 14
3.07 Real Property . . . . . . . . . . . . . . . . . . . . . 17
3.08 Personal Property . . . . . . . . . . . . . . . . . . . 18
3.09 Employee Benefit Plans . . . . . . . . . . . . . . . . . 20
3.10 Labor Relations . . . . . . . . . . . . . . . . . . . . 21
3.11 Employees . . . . . . . . . . . . . . . . . . . . . . . 22
3.12 Bank Accounts . . . . . . . . . . . . . . . . . . . . . 23
3.13 Environmental Matters . . . . . . . . . . . . . . . . . 23
3.14 Insurance Policies . . . . . . . . . . . . . . . . . . . 24
3.15 Contracts and Commitments . . . . . . . . . . . . . . . 25
3.16 Intellectual Property Rights . . . . . . . . . . . . . . 26
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3.17 Certain Violations of Law . . . . . . . . . . . . . . . 27
3.18 Litigation . . . . . . . . . . . . . . . . . . . . . . . 28
3.19 No Material Defaults . . . . . . . . . . . . . . . . . . 28
3.20 Major Suppliers and Customers . . . . . . . . . . . . . 29
3.21 Required Governmental Licenses and Permits . . . . . . . 29
3.22 Other . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.23 Copies . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER AND
ENTERPRISES . . . . . . . . . . . . . . . . . 30
4.01 Organization and Authorization of the Buyer . . . . . . 30
4.02 Authorization . . . . . . . . . . . . . . . . . . . . . 31
4.03 Noncontravention . . . . . . . . . . . . . . . . . . . . 31
4.04 Other . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE V OTHER AGREEMENTS . . . . . . . . . . . . . . . 32
5.01 Continuing Operation of Business . . . . . . . . . . . . 32
5.02 Post-Closing Covenants of Enterprises, Buyer and the
Companies . . . . . . . . . . . . . . . . . . . . . . . 35
5.03 Pursuit of Claims . . . . . . . . . . . . . . . . . . . 35
5.04 Expenses . . . . . . . . . . . . . . . . . . . . . . . . 36
5.05 Brokerage Commissions . . . . . . . . . . . . . . . . . 36
5.06 Access . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.07 Other Offers . . . . . . . . . . . . . . . . . . . . . . 36
5.08 Transfer Taxes . . . . . . . . . . . . . . . . . . . . . 37
5.09 Public Announcements . . . . . . . . . . . . . . . . . . 37
5.10 Deemed Short Period . . . . . . . . . . . . . . . . . . 37
5.11 Election under Section 338 . . . . . . . . . . . . . . . 37
5.12 Other Tax Matters . . . . . . . . . . . . . . . . . . . 38
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5.13 CCBSA Minority Shareholders . . . . . . . . . . . . . . 38
5.14 Retiree Plans . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE VI INDEMNIFICATION . . . . . . . . . . . . . . . 38
6.01 Certain Definitions . . . . . . . . . . . . . . . . . . 38
6.02 Remedies . . . . . . . . . . . . . . . . . . . . . . . . 40
6.03 Survival . . . . . . . . . . . . . . . . . . . . . . . . 43
6.04 Deductible . . . . . . . . . . . . . . . . . . . . . . . 44
6.05 Limitation upon Recovery . . . . . . . . . . . . . . . . 44
6.06 Notice and Resolution of Claim . . . . . . . . . . . . . 45
6.07 Defense . . . . . . . . . . . . . . . . . . . . . . . . 46
6.08 Arbitration . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE VII THE CLOSING . . . . . . . . . . . . . . . . . 49
7.01 Time, Date and Place of Closing . . . . . . . . . . . . 49
7.02 Events Comprising the Closing . . . . . . . . . . . . . 49
7.03 Conditions to Obligations of Buyer . . . . . . . . . . . 49
7.04 Conditions to Obligations of the Sellers . . . . . . . . 52
7.05 Deliveries by the Sellers at the Closing . . . . . . . . 53
7.06 Deliveries by Buyer at the Closing . . . . . . . . . . . 54
ARTICLE VIII TERMINATION AND ABANDONMENT . . . . . . . . . 55
8.01 Termination and Abandonment . . . . . . . . . . . . . . 55
8.02 Rights and Obligations on Termination . . . . . . . . . 55
ARTICLE IX MISCELLANEOUS PROVISIONS . . . . . . . . . . . 56
9.01 Good Faith; Further Assurances; Further Cooperation . . 56
9.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . 56
9.03 Definition of Knowledge . . . . . . . . . . . . . . . . 57
9.04 Assignment . . . . . . . . . . . . . . . . . . . . . . . 57
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9.05 Guaranty of Enterprises . . . . . . . . . . . . . . . . 58
9.06 Guaranty of KO . . . . . . . . . . . . . . . . . . . . . 58
9.07 Captions; Definitions . . . . . . . . . . . . . . . . . 58
9.08 Controlling Law; Amendment; Jurisdiction; Waiver; Remedies
Cumulative . . . . . . . . . . . . . . . . . . . . . . . 59
9.09 No Third-Party Beneficiaries . . . . . . . . . . . . . . 59
9.10 Exhibits; Disclosure Schedule . . . . . . . . . . . . . 59
9.11 Counterparts; Entire Agreement . . . . . . . . . . . . . 59
9.12 Injunctive Relief . . . . . . . . . . . . . . . . . . . 60
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made and entered into as of
the 26th day of July, 1996 between and among the following under
the following circumstances:
The Sellers:
The Coca-Cola Export Corporation and Varoise de
Concentres S.A. (formerly Indal S.A.) (the "CCBSA
Sellers"), as owners of all but 3,269 shares of the
capital stock of COCA-COLA BEVERAGES S.A. ("CCBSA"),
Barlan Inc. (the "CCP Seller"), as owner of all but 6
shares of the capital stock of COCA-COLA PRODUCTION
S.A. ("CCP"), and
Beverage Products Limited (the "BSH Seller"), as owner
of all but 11 shares of the capital stock of S.A.
BEVERAGE SALES HOLDING N.V. ("BSH"),
(The CCBSA Sellers, the CCP Seller and the BSH Seller
are sometimes referred to herein collectively as the
"Sellers" and individually as a "Seller"); and
The Buyer:
Bottling Holdings (International) Inc. (the "Buyer");
and
The Guarantors:
The Coca-Cola Company ("KO"), and
Coca-Cola Enterprises Inc. ("Enterprises").
A. The CCBSA Sellers desire to sell the capital stock
of CCBSA owned by them and the Buyer desires to purchase such
stock on the terms and conditions hereinafter set forth.
B. The CCP Seller desires to sell the capital stock
of CCP owned by it and the Buyer desires to purchase such stock
on the terms and conditions hereinafter set forth.
C. The BSH Seller desires to sell the capital stock
of BSH owned by it and the Buyer desires to purchase such stock
on the terms and conditions hereinafter set forth.
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D. CCBSA has initiated a redemption of certain shares
of CCBSA which will affect the number of shares being sold
hereunder and the Buyer wishes to consent to such redemption
occurring prior to the Closing.
E. Enterprises is willing to guarantee the
obligations of the Buyer hereunder in order to induce the Sellers
and KO to enter into this Agreement.
F. KO is willing to guarantee the obligations of the
Sellers hereunder in order to induce the Buyer and Enterprises to
enter into this Agreement.
IN CONSIDERATION OF the mutual covenants contained herein,
the parties agree as follows:
ARTICLE I
PURCHASE AND SALE; CONSIDERATION
1.01 Purchase and Sale. At the Closing and upon the
terms and subject to the conditions of this Agreement:
(a) The CCBSA Sellers shall sell to the Buyer all
shares of the capital stock of CCBSA owned by them (the "CCBSA
Shares"), together with all right, title and interest thereto,
and the parties shall indicate the transfer of the CCBSA shares
in CCBSA s share register (registre de mouvements de titres) and
shareholders accounts (comptes d actionnaires);
(b) The CCP Seller shall sell to the Buyer all
shares of the capital stock of CCP owned by it (the "CCP
Shares"), together with all right, title and interest thereto,
and the parties shall indicate the transfer of the CCP shares in
CCP's share register (registre de mouvements de titres) and
shareholders' accounts (comptes d'actionnaires); and
(c) The BSH Seller shall sell to the Buyer,
acting through its branch office in Belgium, all shares of the
capital stock of BSH owned by it (the "BSH Shares"), together
with all right, title and interest thereto, and the parties shall
indicate the transfer of the BSH shares to the Buyer's branch
office in Belgium in BSH's share register.
1.02 Purchase Price. The purchase price to be paid by
the Buyer at the Closing for the stock sold and purchased under
this Agreement shall be as determined and allocated among the
Sellers in accordance with Exhibit A to this Agreement and
simultaneous with the payment of the purchase price, Buyer shall
cause the Companies to pay to affiliates of KO, the intercompany
debt owed by the Companies as identified on EXHIBIT A. The
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purchase price and the repayment of intercompany debt shall be
paid by the Buyer by the wire transfer of immediately available
funds to an account or accounts designated by the Seller (and
with respect to the intercompany debt designated by KO) to which
the payments are to be made. Any such designation of accounts
must have occurred not less than two Business Days prior to the
payment date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each Seller hereby severally but not jointly represents
and warrants to the Buyer as follows, with full knowledge that
such representations and warranties are a material consideration
and inducement to the execution of this Agreement by Buyer and
the consummation of the transactions contemplated under this
Agreement (the "Transactions"). The representations and
warranties in this Article II are made by each Seller only with
respect to the shares being sold by such Seller hereunder.
Unless otherwise specified in this Agreement:
(a) a reference to "Shares" shall mean, as to:
(i) the CCBSA Sellers, the CCBSA Shares,
(ii) the CCP Seller, the CCP Shares, and
(iii) the BSH Seller, the BSH Shares,
(b) a reference to the "Company" or to the
"Subsidiary" (as defined herein) shall mean, as to
(i) the CCBSA Sellers, CCBSA and its
Subsidiaries,
(ii) the CCP Seller, CCP and
(iii) the BSH Seller, BSH and its
Subsidiaries, and
(c) a reference to the "Companies" shall mean
collectively, CCBSA, CCP and BSH.
2.01 Power and Authority of Seller. At the Closing,
(a) Such Seller shall have the right, power and
capacity to execute, deliver and perform this Agreement and all
other agreements, documents and certificates contemplated or
required of such Seller hereby (collectively, the "Seller's
Documents") and to consummate the transactions contemplated
hereby and thereby; and
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(b) The execution, delivery and performance of
this Agreement and each of the Seller's Documents by such Seller
shall have been duly and validly authorized by all necessary
action on the part of such Seller. This Agreement and each of
the Seller's Documents shall constitute the valid and binding
obligations of each Seller, enforceable against such Seller in
accordance with their respective terms, except to the extent the
enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability
is considered in a proceeding in law or in equity. The
execution, delivery and performance by such Seller of this
Agreement and each of the Seller's Documents and the consummation
of the transactions contemplated hereby and thereby will not,
subject to the approval by the Boards of Directors of KO, each of
the Sellers and CCBSA and CCP, and assuming receipt of the
Required Statutory Approvals (as defined herein), with or without
the giving of notice or the lapse of time, or both, (i) violate
any provision of law, statute, rule or regulation to which such
Seller is subject, (ii) violate any order, judgment or decree
applicable to such Seller, (iii) conflict with, or result in a
breach or default under, any term or condition of any court
order, shareholder agreement, articles of incorporation, bylaws,
or any other agreement, document or instrument to which such
Seller is a party or by which such Seller or such Seller's Shares
are bound excluding from the foregoing clauses (i), (ii) and
(iii) such violations, conflicts, breaches, defaults,
terminations, accelerations or creations of liens, security
interests, charges or encumbrances that would not, in the
aggregate, have a material adverse effect on the business,
operations, properties, assets, condition (financial or other),
results of operations or prospects of the Company and its
Subsidiaries, taken as a whole.
2.02 Ownership of Shares; Voting. Such Seller has sole
and exclusive record title to and ownership of all of the Shares
registered in such Seller's name, as set forth in Section 3.01(c)
of the Disclosure Schedule, and such Section 3.01(c) is a
complete list of all such Shares held of record by such Seller or
which such Seller has the right to have issued. Section 3.01(c)
of the Disclosure Schedule shall be updated at the Closing. Each
Seller represents that the Shares owned by such Seller are free
and clear of any liens, restrictions, claims, charges, options,
rights of first refusal or encumbrances, with no defects of title
whatsoever. No former or present holder of the Shares or any
other capital stock of the Company has any legally cognizable
claim enforceable against such Seller or the Company based upon
any sale or purchase of the Shares or such other capital stock by
any Seller or predecessors in interest to such Seller. Such
Seller has the exclusive right, power and authority to vote the
Shares registered in such Seller's name.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES CONCERNING
THE COMPANIES AND SUBSIDIARIES
The Sellers hereby represent and warrant to Buyer as
follows, with full knowledge that such representations and
warranties are a material consideration and inducement to the
execution of this Agreement by Buyer and the consummation of the
transactions contemplated hereunder. The representations and
warranties in this Article III are made by (i) the CCBSA Sellers,
jointly and severally, only with respect to CCBSA and its
Subsidiaries (ii) the CCP Seller only with respect to CCP and
(iii) the BSH Seller only with respect to BSH and its
Subsidiaries.
3.01 Organization and Authorization.
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation. The Company 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. Except as set forth in Section
3.01(a) of the Disclosure Schedule, the Company is duly qualified
and in good standing in every jurisdiction in which the conduct
of its business or the ownership of its properties and assets
requires the Company to be so qualified and such jurisdictions
are listed in Section 3.01(a) of the Disclosure Schedule; neither
the property owned or operated by the Company nor the nature of
the business conducted by it makes qualification therein
necessary under Applicable Law in any other jurisdiction.
(b) The consummation of the transactions
contemplated hereby will not (i) violate or conflict with any
provision of the statuts or bylaws of the Company (except that
approval by the Board of Directors of CCBSA and CCP shall be
required prior to the Closing) or any Subsidiary; (ii) breach,
violate or constitute an event of default (or an event which with
the lapse of time or the giving of notice or both would
constitute an event of default) under or give rise to any right
of termination, cancellation, modification or acceleration under,
any note, bond, indenture, mortgage, security agreement, lease,
franchise (excluding the Bottling Authorizations, as hereinafter
defined), Material Agreement (as defined herein), or any other
material instrument or obligation (except as set forth in Section
3.19 of the Disclosure Schedule in response to clause (ii) of the
first sentence of Section 3.19) to which the Company or any
Subsidiary is a party, or by which the Company or any Subsidiary
or any of their properties or assets are bound, or result in the
creation of any lien, claim or encumbrance or other right of any
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third party of any kind whatsoever upon the properties or assets
of the Company or any Subsidiary pursuant to the terms of any
such Material Agreement, instrument or obligation; (iii) except
as provided under Section 3.01(b) of the Disclosure Schedule,
violate or conflict with any law, statute, ordinance, code, rule,
regulation, judgment, order, writ, injunction, decree or other
instrument of any international, European, national, regional,
local or foreign court or governmental or regulatory body, agency
or authority ("Governmental Authority") applicable to the Company
or any Subsidiary or by which any of their respective properties
or assets may be bound ("Applicable Law") (assuming receipt of
the Required Statutory Approvals); or (iv) require, on the part
of the Company or any Subsidiary, any filing or registration
with, or permit, license, exemption, consent, authorization or
approval of, or the giving of any notice to, any governmental or
regulatory body, agency or authority, except for the Required
Statutory Approvals (as defined herein). Excluded from the
foregoing clauses (ii) and (iii) shall be such violations,
conflicts, breaches, defaults, terminations, accelerations or
creations of liens, security interests, charges or encumbrances
that would not, in the aggregate, have a material adverse effect
on the business, operations, properties, assets, condition
(financial or other), results of operations or prospects of the
Company and its Subsidiaries, taken as a whole.
(c) The issued and outstanding capital stock of
the Company is set forth on Section 3.01(c) of the Disclosure
Schedule. A list of all shareholders of the Company, showing the
address of each and the number of Shares owned is set forth in
Section 3.01(c) of the Disclosure Schedule. Section 3.01(c) of
the Disclosure Schedule shall be updated at the Closing. All of
the issued and outstanding shares of the capital stock are
validly issued and are fully paid. The Company does not have
outstanding, nor is it bound by, any subscriptions, options,
warrants, calls, commitments or agreements to issue any
additional shares of capital stock or any other equity security,
including any right of conversion or exchange under any
outstanding security or other instrument or agreement. All
issuances, transfers, purchases or redemptions of the capital
stock of the Company and each Subsidiary have complied with all
applicable agreements and all Applicable Laws and all Taxes
thereon have been paid (except for FRF 5,000 with respect to the
capital reduction of CCBSA (the "Capital Reduction") as described
in Section 7.04(e) hereof). Except as set forth in Section
3.01(c) of the Disclosure Schedule, no present or former holder
of any capital stock of the Company or any Subsidiary or any
corporation which has been merged into the Company or any
Subsidiary has any legally cognizable claim against the Company
or such Subsidiary based upon any issuance, sale, purchase,
redemption or involvement in any transfer of any capital stock by
the Company or any Subsidiary or any corporation which has been
merged into the Company or any Subsidiary. Except with respect
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to the Capital Reduction, there are no outstanding obligations of
the Company or any Subsidiary to repurchase, redeem or otherwise
acquire any outstanding shares of capital stock of the Company or
any Subsidiary. Except as set forth in Section 3.01(c) of the
Disclosure Schedule, there are no shares of capital stock held in
the treasury of the Company or any Subsidiary except for any
shares relating to the Capital Reduction which following the
Closing may be held in CCBSA's treasury prior to their
cancellation.
(d) Except for the ownership interest in each of
the entities listed in Section 3.01(d)(i) of the Disclosure
Schedule (each a "Subsidiary" and collectively the
"Subsidiaries"), the Company has no interest, direct or indirect,
in any corporation or entity of any nature except as set forth in
Section 3.01(d)(ii) of the Disclosure Schedule. Section
3.01(d)(i) of the Disclosure Schedule sets forth for each
Subsidiary the jurisdiction of their incorporation and the number
of shares issued and outstanding. Each of the Subsidiaries is a
corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of its
incorporation and has all requisite power and authority,
corporate and 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 every jurisdiction in which the
conduct of its business or the ownership of its properties
requires it to be so qualified. Except as set forth on Schedule
3.01(d) of the Disclosure Schedule, all issued and outstanding
shares of capital stock of the Subsidiaries are owned by the
Company, free and clear of any liens, restrictions, claims,
equities, charges, options, rights of first refusal or other
encumbrances, with no defects of title whatsoever. All of the
issued and outstanding shares of each Subsidiary are validly
issued and are fully paid. There are no outstanding
subscriptions, options, warrants, rights, calls, contracts,
voting trusts, proxies or other commitments, understandings,
restrictions or arrangements relating to the issuance, sale,
voting, transfer, ownership or other rights with respect to any
shares of capital stock of any Subsidiary, including any right of
conversion or exchange under any outstanding security, instrument
or agreement. The Company has the full power, right and
authority to vote all of the outstanding shares of the capital
stock of each Subsidiary owned by the Company. The Company is
not a party to or bound by any agreement affecting or relating to
its right to transfer the outstanding shares of any Subsidiary.
(e) Copies of the organizational documents and
bylaws of the Company and each Subsidiary previously delivered or
made available to Buyer are the complete, true, and correct
organizational documents and bylaws of the Company and each
Subsidiary in effect as of the date hereof. The minutes of
directors' and shareholders' meetings, actions taken by written
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consent and the stock books of the Company and each Subsidiary
previously made available to Buyer are the accurate records of
directors' and shareholders' meetings, actions taken by written
consent and stock issuances through and including the date hereof
and reflect all transactions required to be contained in such
records. To the knowledge of the Company, except as set forth in
Section 3.01(e) of the Disclosure Schedule, the Company has
possession and control of all minute books and records, corporate
and financial, of the Company and the Subsidiaries for at least
five years prior to Closing.
(f) All current directors of the Company and each
Subsidiary together with the functional managers reporting to the
General Managers of CCBSA, CCP and S.A. Coca-Cola Beverages
Belgium N.V. are listed in Section 3.01(f) of the Disclosure
Schedule.
3.02 Bottling Authorizations.
(a) Except as set forth in Section 3.02(a) of the
Disclosure Schedule, the Company and each Subsidiary have in
effect all contractual authorizations required to bottle, can,
distribute and sell soft drink and other nonalcoholic beverage
products ("Bottling Authorizations", which term includes, without
limitation, the arrangements of the Company and/or each relevant
Subsidiary with affiliates of Nestle S.A. for the production and
distribution of Nestle products) that are necessary for them to
conduct their respective businesses as now conducted. The
arrangements with Nestle S.A. are described generally in Section
3.02(a) of the Disclosure Schedule. The Sellers and the Buyer
acknowledge and agree that effective upon the Closing the
Bottling Authorizations (for this purpose limited to KO products)
will be terminated and the Companies will be granted new bottling
authorizations for KO products in accordance with Sections
7.03(r) and 7.04(k).
(b) Except as set forth in Section 3.02(b)(i) of
the Disclosure Schedule, neither the Company nor any Subsidiary
has any liability to another bottler of products of KO in
connection with violations of Bottling Authorizations (for this
purpose limited to KO products) (other than transshipments as
permitted or required by Applicable Law), and, to the knowledge
of the Company, neither the Company nor any Subsidiary has any
grounds for any such claim against any other bottler. Section
3.02(b)(ii) of the Disclosure Schedule sets forth a list of all
transshipment claims against or by the Company or any Subsidiary
which have been asserted within the 12 months preceding the date
of this Agreement.
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3.03 Indebtedness.
(a) Section 3.03 of the Disclosure Schedule
lists, as of June 28, 1996 (June 29, 1996 with respect to CCP),
all material agreements and other instruments for Indebtedness
For Borrowed Money, as well as material indebtedness of the
Company and each Subsidiary by way of capital leases ("Capital
Leases") (as determined in accordance with accounting principles
generally accepted in the United States consistently applied ("US
GAAP")), guarantees, undertakings on which others rely in
extending credit and all material security arrangements with
respect to personal property owned by the Company or any
Subsidiary. As used in this Agreement, "Indebtedness For
Borrowed Money" includes, without limitation, all obligations of
the Company and each Subsidiary evidenced by bonds, debentures,
notes or similar instruments or material obligations for the
deferred purchase price of property.
(b) Section 3.03 of the Disclosure Schedule
lists, as of June 28, 1996, all interest rate, commodity or
foreign currency exchange, swap, collar, cap or similar
agreements entered into by the Company or any Subsidiary pursuant
to which the Company or a Subsidiary has hedged its interest
rate, foreign currency or commodity exposure.
(c) Section 3.03 of the Disclosure Schedule shall
be updated as of Closing; provided, however, that such update
shall include amounts outstanding as of June 28, 1996 (as opposed
to as of the Closing Date).
3.04 Financial Matters.
(a) The Sellers have previously delivered to
Buyer true and correct copies of the audited combined balance
sheets of BSH and its Subsidiaries, CCBSA and its Subsidiaries,
and CCP as of December 31, 1994 and 1995, and the related
combined statements of income, share-owners' equity and cash
flows for each of the three years in the period ended December
31, 1995, expressed in United States dollar equivalents and
prepared in accordance with US GAAP (collectively the "Combined
Financial Statements"). Section 3.04(a) of the Disclosure
Schedule contains true and correct copies of the audited (except
for BSH and Subsidiaries which are unaudited) consolidated
balance sheet of each Company as of December 31, 1995, and the
related audited (except for BSH and Subsidiaries which are
unaudited) consolidated (except that CCBSA's Subsidiary S.A.
Beverage Sales International N.V. has not been consolidated with
CCBSA's Financial Statements but is presented separately)
statement of income for the fiscal year then ended, including the
notes thereto (collectively the "Financial Statements") and
Management's unaudited consolidated (except for CCBSA and
Subsidiaries which are unconsolidated) balance sheet of each
Company as of June 28, 1996 (June 29, 1996 for CCP), and
Management's related unaudited consolidated (except for CCBSA and
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Subsidiaries which are unconsolidated) statement of income for
the period from January 1, 1996 through June 28, 1996 (June 29,
1996 for CCP) (the "Interim Financial Statements"). The
Financial Statements present fairly, in all material respects,
the financial position of each Company as of December 31, 1995,
and the related results of operations for the year then ended.
The Financial Statements have been prepared in accordance with US
GAAP and the Interim Financial Statements have been prepared in
accordance with historical practices of each Company (and in the
case of CCBSA, each Subsidiary) consistently applied except as
set forth in Section 3.04(a) of the Disclosure Schedule. The
Company accounts for certain items including Taxes, liabilities
for pensions and other employee benefits and records or accrues
for certain items based on a 12-month accounting period ending
December 31 of each year. Interim Financial Statements,
therefore, while prepared in accordance with past practice, do
not necessarily reflect the true and correct financial position
of the Company at and through the dates of such Interim Financial
Statements. All of the inventories of the Company and the
Subsidiaries included in the Financial Statements are valued for
the purposes thereof at the lower of cost or market. Management's
1996 budget for each of the Companies and its Subsidiaries (the
"1996 Budget") and the June 1996 full-year Rolling Estimate of
the Company (the "Rolling Estimate") which have previously been
delivered to the Buyer have been prepared in accordance with the
historical practices of KO. Prior to the Closing Date, the
Company shall provide Buyer with complete access to all of the
Company's financial information and records.
(b) Except (and to the extent) reflected in the
Combined Financial Statements, the Financial Statements, the
Interim Financial Statements, this Agreement, or in Section
3.04(b) of the Disclosure Schedule, and except with respect to
environmental matters relating to On-Site Property, neither the
Company nor any Subsidiary had any liability, other than in the
ordinary course of business (whether accrued, absolute,
contingent, or otherwise) in excess of $300,000 in the aggregate
as of the date of the Interim Financial Statements of a nature
required by US GAAP to be disclosed in such Combined Financial
Statements, Financial Statements or Interim Financial Statements.
Except in the ordinary course of business or as disclosed in
Section 3.04(b) of the Disclosure Schedule, neither the Company
nor any Subsidiary has incurred any liability (whether accrued,
absolute, contingent or otherwise) in excess of $300,000 since
the date of the Interim Financial Statements of a nature required
by US GAAP to be disclosed. Notwithstanding the foregoing, the
Buyer and Seller agree that the Seller shall have no liability
for breaches of this Section 3.04(b) resulting from differences
between the application of the Company's interim financial
statement accounting practices and procedures and the Companies'
year-end practices and procedures consistently applied,
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including, without limitation, Taxes, pensions and employee
benefits and year-end marketing accruals.
(c) Except as set forth in Section 3.04(c) of the
Disclosure Schedule, the trade accounts receivable (net of
allowances to cover amounts which may become uncollectible)
reflected on the Interim Financial Statements (i) were valid and
existing; (ii) represented monies due for goods sold and
delivered and services rendered in the ordinary course of
business; (iii) were not subject to any refunds or adjustments,
or any cognizable defenses, rights of set off, assignments,
restrictions, security interests or other encumbrances materially
in excess of the historical experience of the Company and (iv)
there were no disputes regarding the collectibility of any such
accounts receivable materially in excess of the historical
experience of the Company.
(d) The trade accounts receivable of the Company
as of the Closing Date (net of allowances to be established by
the Company in accordance with subparagraph (f) below) (i) will
be valid and existing; (ii) will represent monies due for goods
sold and delivered and services rendered in the ordinary course
of business and materially in conformity with the historical
practices of the Company; (iii) will not be subject to any
refunds or adjustments, or any restrictions, security interests
or other encumbrances materially in each case in excess of the
historical experiences of the Company; (iv) there will not be any
cognizable disputes regarding the collectibility of any such
accounts receivable materially in excess of the historical
experiences of the Company.
(e) Except as set forth in the factoring
agreement entered into by CCBSA and described in the Combined
Financial Statements, neither the Company nor any Subsidiary has
any liability pertaining to any previous factoring of any of its
accounts receivable. Within 20 Business Days after the Closing
Date, the Sellers and Buyer shall use their best efforts to cause
to be delivered to the Buyer and Sellers an aged accounts
receivable listing (together with the reserve amounts established
as set forth in (f) below), prepared as of the Closing Date,
which reflects customer names, account numbers and outstanding
balances, as well as advances to (i) employees in excess of
$10,000 and (ii) customers (excluding up-front payments and/or
advances to customers in connection with marketing agreements).
As used in this Agreement "Business Day" means a day other than a
day on which banks in Atlanta, Georgia, Paris, France, or
Brussels, Belgium are required or authorized by law to close or a
day on which trading on the New York Stock Exchange is closed.
(f) The Buyer and the Sellers agree
that in connection with the Transactions, the books of the
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Company will be closed as of the Closing Date in accordance with
Company and KO year-end practices and procedures. Such Closing
will be performed consistent with past Company and KO practices
and all Tax accruals will be made in accordance with Section
3.06(d). The parties agree that such closing shall be completed
as soon as practical following the closing of the Transactions
and will use their best efforts to ensure completion of the
Closing Date balance sheet and submission to the Sellers and KO
for review as described below within two months of Closing. In
connection with such Closing, the Buyer and Sellers agree that KO
and its advisors shall have access to and the right to examine
the books and records of the Company and its Subsidiaries in
order to verify that the Closing Date balance sheet presents
fairly, in all material respects, the financial position of the
Company and its Subsidiaries, has been prepared in accordance
with the Company's and KO's year-end practices and procedures and
in accordance with US GAAP, and that the Tax accruals required by
Section 3.06(d) have been properly made. The Buyer and Sellers
agree that the above-described closing procedures including the
accounting entries made in accordance therewith, are not intended
to affect the purchase price as set forth in Section 1.02 and
Exhibit A hereto. The representations and warranties set forth
in Sections 3.04(c), (d), (e), 3.06 and 3.09(b) shall be deemed
to relate to the financial condition of the Companies and their
Subsidiaries as reflected in the Closing Date financial
statements to be prepared following the Closing Date in
accordance with this subparagraph (f) (and with respect to Tax
matters in accordance with Section 3.06(d)).
3.05 Absence of Certain Changes and Events. Except as
set forth in this Agreement, or reflected in the Financial
Statements, the Interim Financial Statements, Section 3.05 of the
Disclosure Schedule, the Gibb Report (as defined herein) or any
other Section of the Disclosure Schedule, since December 31,
1995, there has not been:
(a) any material adverse change in the working
capital, assets, liabilities or financial condition of the
Company or any Subsidiary, except for normal changes due to
seasonality or otherwise in the ordinary course of business;
(b) any damage, destruction or loss, whether or
not covered by insurance, materially and adversely affecting the
properties, assets, or financial condition of the Company or any
Subsidiary, taken as a whole;
(c) except in connection with the Capital
Reduction, any declaration, setting aside or payment of any
dividend or other distribution of assets in respect of the
capital stock of the Company or any Subsidiary or any direct or
indirect redemption, purchase or other acquisition of any such
stock, or any sales or other transfers for materially less than
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fair market value to any shareholder of the Company or any
Subsidiary;
(d) any issuance or sale, or agreement to issue
or sell, by the Company or any Subsidiary of any stock or other
equity securities, or any options, warrants, subscriptions, calls
or other rights or commitments with respect to the issuance of
capital stock or obligations convertible into other equity
securities of the Company or any Subsidiary;
(e) any merger, consolidation or share exchange
or agreement to merge, consolidate or exchange shares with any
other corporation (or any transaction having a similar effect)
involving the Company or any Subsidiary, or any acquisition of,
or agreement to acquire, any share capital or going concern of
any other person, firm, association, corporation or other
business organization, to which the Company or any Subsidiary is
or was a party;
(f) except as provided for in the 1996 Budget,
any capital expenditure not previously committed, or any new
commitment by the Company or any Subsidiary for additions to
property, plant or equipment in excess of $200,000 per item;
(g) except in the ordinary course of business,
any sale or granting to any party or parties of any license,
franchise, option or other similar right to sell, distribute, or
otherwise deal in or with products, merchandise or services of
the Company or any Subsidiary;
(h) except as required by US GAAP, any change in
any method of accounting or accounting practice or principle used
by the Company or any Subsidiary which could have a material
adverse effect on the financial statements of the Company taken
as a whole;
(i) except in connection with the Distri-One
litigation described in Section 3.18 of the Disclosure Schedule
(the "Distri-One Litigation"), any waiver in the form of a
settlement by the Company or any Subsidiary of any material claim
or right in dispute;
(j) except in connection with the establishment
of KO's Region Office in consultation with Buyer, any sale,
transfer or other disposition by the Company or any Subsidiary of
any material assets, except in the ordinary course of business
consistent with past practice;
(k) except for normal compensation involving
salary and benefits, travel advances, or otherwise in the
ordinary course of business consistent with past practice, with
respect to any employee, (i) any amount paid, loaned or advanced
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by the Company or any Subsidiary; or (ii) any material asset
transferred or leased by the Company or any Subsidiary;
(l) other than with respect to Excluded Items,
any write down in value of any inventory of the Company or any
Subsidiary other than in the ordinary course of business
consistent with past practice; or
(m) any material commitment or material
transaction entered into by the Company or any Subsidiary other
than in the ordinary course of business consistent with past
practices.
3.06 Tax and Social Security Matters.
(a) This paragraph provides certain definitions:
(i) with respect to this Section 3.06
and Sections 5.10, 5.11 and 5.12, the terms Company or
Companies shall include any predecessor in interest of
a Company; and the terms Subsidiary or Subsidiaries
shall include all entities in which a Company currently
owns, or has previously owned, more than 50% of the
voting power and any predecessors of such entities; and
(ii) for purposes of this Agreement,
"Taxes" shall mean all taxes, assessments, charges,
duties, fees, levies, value added (VAT), real or
personal property, withholding, charges for social
security premiums, environmental or other transfer,
sales and all other taxes of any kind deemed of a
fiscal, customs, or social security nature for which
the Company or any Subsidiary may have any liability
imposed by any Governmental Authority (including
interest, penalties or additions associated therewith)
whether disputed or not.
(b) Except as disclosed in Section 3.06(b) of the
Disclosure Schedule (which shall be updated prior to Closing):
(i) all Tax returns of the Companies and
Subsidiaries, including estimated returns and reports
of every kind with respect to Taxes, which are due to
have been filed in accordance with Applicable Law, have
been duly filed, and all such returns are correct and
complete in all material respects;
(ii) no audit or formal investigation
which could have a material adverse effect on the
Company of any return or report of Taxes of the
Companies and Subsidiaries is currently underway,
pending or to the knowledge of the Company, threatened
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against the Companies or a Subsidiary, and no issue has
been raised in any examination of Taxes of the
Companies and Subsidiaries which by application of the
same or similar principles, reasonably could be
expected to result in an obligation for additional
Taxes due for any period ending on or prior to the
Closing Date not so examined;
(iii) no claims have been asserted and
no proposals or deficiencies for any Taxes of the
Companies and Subsidiaries are being asserted, proposed
or, threatened;
(iv) there are not now any extensions of
time in effect with respect to the dates on which any
returns or reports of Taxes for the Companies or a
Subsidiary were or are due to be filed;
(v) there are no outstanding waivers or
agreements by the Companies or any Subsidiary for the
extension of time for the assessment of any Taxes or
deficiency thereof, nor are there any waivers of the
statute of limitations in respect to Taxes for which
the Companies or any Subsidiary may have any liability
or any requests for rulings, outstanding subpoenas or
requests for information, notice of proposed
reassessment of any property owned or leased by the
Companies or any Subsidiary or any other matter pending
between the Companies or any Subsidiary and any Taxing
authority;
(vi) there are no liens for Taxes upon
any property or assets of the Companies or any
Subsidiary except liens for current Taxes not yet due,
nor are there any liens which are pending or
threatened;
(vii) the amount of potential
adjustments to the taxable income of CCBSA, as reported
on CCBSA's 1994 and 1995 French income tax returns,
that relate to any issues associated with the
procurement activities of Minute Maid SA will not be
greater than FF 60 million for 1994 and FF 60 million
for 1995;
(viii) under applicable French law, CCP
qualifies under Article 208 quinquies of the Code
General des Impots and qualifies for treatment as an
entity exempt from French income Tax on qualifying
earnings derived from its manufacturing operations
carried out in the Dunkerque Zone D'Entreprises and
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such Tax exemption shall not be affected by the
consummation of the Transactions; and
(ix) true and complete copies of all
income Tax returns of the CCBSA, CCP, BSH and each
Subsidiary for the taxable year ended December 31,
1994, and with respect to CCBSA and CCP for the taxable
year ended December 31, 1995, have been made available
to the Buyer.
(c) The following representations and warranties
are made, except as set forth in Section 3.06 of the Disclosure
Schedule, with respect to the Taxes of the Companies and
Subsidiaries:
(i) all Taxes, deposits or other
payments or withholdings for which the Companies or any
Subsidiary have any liability under Applicable Law
through the date hereof and through the Closing Date
(whether or not shown on any return) have been paid in
full or have been or will be accrued in the Closing
Date financial statements in accordance with Section
3.06(d) as current liabilities for Taxes;
(ii) All deficiencies or assessments
asserted as a result of any examination of any return
or report of Taxes by the Companies and Subsidiaries
have been paid in full, accrued on the Financial
Statements or finally settled; and
(iii) with respect to the participation
by any employee of a Company or a Subsidiary in a stock
option plan awarding KO shares, no Taxes of, or other
payment obligations by, the Companies and Subsidiaries
are unpaid for any period ending prior to the Closing
Date, nor will any Taxes of, or any other payment
obligations by, the Companies or any Subsidiaries be
due with respect to such KO stock option plan in the
future.
(d) For purposes of this Section 3.06 and Section
3.04(f):
(i) amounts accrued as current
liabilities for Taxes (other than corporate income
Taxes) on the Closing Date financial statements will be
calculated and accrued (A) in a manner and using such
methods as are consistent with the year-end past
practices of the respective Companies for reflecting
such liabilities on their financial statements; (B)
will only reflect consistently applied filing positions
of the Companies; and (C) except for Taxes as disclosed
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in Section 3.06(d)(i) of the Disclosure Schedule, will
only reflect accruals for such Taxes associated with
the Deemed Short Period;
(ii) no corporate income Taxes of any of
the Companies and Subsidiaries related to any tax
audit, tax assessment or potential audit adjustment
shall be accrued on the Closing Date financial
statements except that BSH and its Subsidiaries will
not accrue more than BEF 21.0 million as current
corporate income Tax liabilities (which Tax liabilities
relate to periods ending prior to January 1, 1996).
(e) In addition to the current and deferred Tax
liabilities recorded on the books and records of the Companies
through the date hereof and at the Closing Date, BSH has recorded
an accrual of BEF 37.5 million for potential Tax contingencies
which may arise as a result of the 1993 and 1994 bottling
acquisitions and the subsequent reorganizations of BSH (the "BSH
Tax Contingencies"). Any portion of the accrual for the BSH Tax
Contingencies which exceeds the Tax liabilities associated with
the BSH Tax Contingencies may be used either (i) as a deductible
against Tax Claims associated with Tax liabilities of BSH and its
Subsidiaries, and (ii) to the extent of any excess after such
application, such excess amount will be added to the Deductible
as set forth in Section 6.04(a) (and to the extent that Losses
(as defined in Article VI) have been previously indemnified, such
amount shall be reimbursed to Sellers).
3.07 Real Property.
(a) Section 3.07(a) of the Disclosure Schedule
contains a complete list by location of all real property which
is (i) currently owned or was owned at any time since December
31, 1994 by the Company, any Subsidiary, or any predecessor in
interest; (ii) currently leased by the Company or a Subsidiary,
as lessee or lessor; or (iii) as to which the Company or a
Subsidiary currently has either an option to purchase, sell or
lease, or currently may be obligated to purchase, sell or lease.
(b) With respect to such real property:
(i) All real property which was reflected
on the Financial Statements is listed in Section 3.07(a) of
the Disclosure Schedule, and, except as disclosed in Section
3.07(a) of the Disclosure Schedule, no ownership interest in
any real property has been acquired or disposed of by the
Company or a Subsidiary since the date of the Financial
Statements.
(ii) All real property owned by the Company
or any Subsidiary is owned free and clear of any liens,
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encumbrances or restrictions whatsoever, except for (A)
rights of lessees under the terms of existing written
leases which are disclosed to Buyer in Section 3.07(b) of
the Disclosure Schedule; (B) liens for Taxes not yet due and
payable; (C) liens imposed by Applicable Law and incurred in
the ordinary course of business for obligations not yet due
and payable to laborers, materialmen and the like; and (D)
zoning or other restrictions, variances, covenants, rights-
of-way, encumbrances, easements and other minor
irregularities of title, none of which, individually or in
the aggregate, materially interfere with the present use or
occupance of any of the real property by the Company or a
Subsidiary, have a material adverse effect on the value
thereof for its present use, or would materially impair the
ability of the Company or a Subsidiary to sell such property
for a use consistent with its present use (each of the
foregoing being a "Permitted Lien").
(iii) Except as set forth in Section 3.07(b)
of the Disclosure Schedule, no real property owned or leased
by the Company or a Subsidiary is subject to any
governmental decree or order (or to the knowledge of the
Company threatened or proposed order) to be sold or taken by
public authority, and, except as a result of Applicable Law,
arising from Permitted Liens or as set forth in public
records, to the knowledge of the Company there are no
material rights-of-way, building use restrictions,
exceptions, variances, reservations or limitations of any
nature whatsoever.
(iv) To the knowledge of the Company, except
as set forth in Section 3.07(b) of the Disclosure Schedule
or the environmental studies, matrices and reports made by
Sir Alexander Gibb and Partners LTD in connection with the
Transactions (the "Gibb Report") and except to the extent
covered by capital expenditures budgeted for in the 1996
Budget, all plants and structures owned or leased by the
Company or a Subsidiary, including, without limitation,
parking areas, loading docks and roofs, are in reasonably
good and safe operating condition and repair, ordinary wear
and tear excepted, structurally sound with no known material
defects, and reasonably adequate for the uses to which they
are being put.
3.08 Personal Property.
(a) With respect to the tangible personal
property of the Company or a Subsidiary reflected in the
Financial Statements (the "Personal Property"):
(i) Except as set forth in Section 3.08(a) of
the Disclosure Schedule, except for Permitted Liens and
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purchase money security interests entered into in the
ordinary course of business consistent with past practice,
the Company or a Subsidiary has good, valid and marketable
title free and clear of any liens, encumbrances or
restrictions whatsoever, claims, charges, security
interests, easements or other encumbrances of any nature
whatsoever except for any personal property divested in the
ordinary course of business consistent with past practice
since the date of such Financial Statements.
(ii) Except as set forth in Sections 3.08(a)
of the Disclosure Schedule or the Gibb Report and except to
the extent covered by capital expenditures budgeted for in
the 1996 Budget, the Personal Property other than inventory,
is in reasonably good repair, ordinary wear and tear and
latent defects excepted, in reasonably good and safe
operating condition, and reasonably adequate for the uses to
which such property is being put.
(iii) Except as set forth in Section 3.08(a)
of the Disclosure Schedule, excluding (whether or not booked
as inventory) bottles, paper labels, and other packaging
materials, cases and pallets, crowns, point of sale
materials and novelty items incorporating trademarks of KO
(collectively, the "Excluded Items"), all inventory owned by
the Company or a Subsidiary is merchantable and of a quality
and quantity usable and salable in the ordinary course of
the business of the Company or such Subsidiary. No material
amount of inventory, whether owned by the Company or a
Subsidiary or, to the knowledge of the Company, out in the
trade, other than the Excluded Items and inventory which was
not manufactured or sold by the Company or any Subsidiaries,
is out-of-date by applicable franchisor standards. No
inventory previously sold by the Company or any Subsidiaries
is subject to returns materially in excess of that
experienced by the Company or any Subsidiary during 1995.
No food ingredient, finished article of food, food packaging
or food labeling included in the inventories manufactured by
the Company or any Subsidiaries is in breach of Applicable
Laws. There is no pending or, to the knowledge of the
Company, threatened, formal investigation or regulatory
action affecting any inventories manufactured by the Company
or any Subsidiaries.
(b) With respect to any tangible personal
property leased by the Company or a Subsidiary pursuant to a
lease which extends for a period in excess of 12 months or
requires payments in the aggregate in excess of $150,000 per year
(the "Leased Personal Property"), except as set forth in Section
3.13 of the Disclosure Schedule and except to the extent covered
by capital expenditures budgeted for in the 1996 Budget, the
Leased Personal Property is in reasonably good repair, ordinary
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wear and tear and latent defects excepted, in reasonably good and
safe operating condition, and reasonably adequate for the use to
which such property is being put.
3.09 Employee Benefit Plans.
(a) Section 3.09 of the Disclosure Schedule lists
each Employee Benefit Plan which is currently in effect or as to
which the Company or any Subsidiary has any material ongoing
liability or obligation. As used herein "Employee Benefit Plan"
means each collective bargaining agreement or material contract
with any trade union or deferred compensation, profit-sharing,
pension, bonus, stock option, stock purchase or other material
fringe benefit or material compensation contract, commitment,
arrangement or plan (whether written or oral), which the Company
or any Subsidiary currently has in effect or in which the Company
or any Subsidiary currently participates or under which the
Company or any Subsidiary currently has an obligation to make
contributions or to pay benefits, for the benefit of persons who
are, were or will become in accordance with the terms of the
plan, active employees, former employees, retirees, directors or
independent contractors (or their dependents, spouses or
beneficiaries) of the Company or a Subsidiary.
(b) Except as reflected in the Combined Financial
Statements, the Financial Statements, the Interim Financial
Statements, or in Sections 3.04, 3.05 or 3.09 of the Disclosure
Schedule and subject to the provisions of Section 3.04(a) with
respect to Interim Financial Statements and subject to Section
3.04(f), all contributions, premium payments and other expenses
or liabilities required to be paid, in whole or in part, under
each Employee Benefit Plan or with respect thereto through the
Closing Date will be paid by the Company or a Subsidiary, and the
Company and each Subsidiary have complied in all material
respects with their respective obligations with respect to all
Employee Benefit Plans. Each Employee Benefit Plan has been
maintained in all material respects in accordance with all
Applicable Laws.
(c) Neither the Company nor any Subsidiary has
taken any action that would subject it to material liability, Tax
or penalty with respect to any Employee Benefit Plan (other than
routine and reasonable claims for benefits made in the ordinary
course of plan operations).
(d) No current or former employee or director has
outstanding options to purchase any stock or other securities in
the Company or any Subsidiary, and no Employee Benefit Plan
requires that any payments be made in the form of any such stock
or securities.
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3.10 Labor Relations. Except as disclosed in Sections
3.09, 3.10, 3.13 or 3.18 of the Disclosure Schedule:
(a) During the two years preceding the date of
this Agreement, the Company and each Subsidiary has been and on
the Closing Date will be in compliance in all material respects
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.
(b) During the two years preceding the date of
this Agreement, no claims, which individually or in the aggregate
are material, have been filed or are or were pending against the
Company or any Subsidiary based upon unpaid wages or overtime.
(c) There is no formal written charge or formal
written complaint alleging any material unfair labor practice or
other material labor matter pending or, to the knowledge of the
Company, threatened against the Company or any Subsidiary.
(d) There is no organized labor strike, material
dispute, stoppage or material slowdown actually pending or, to
the knowledge of the Company, threatened against the Company or
any Subsidiary, and there is no picketing, work stoppage
(sympathetic or otherwise), handbilling threatening any of the
above, or other material concerted action involving the employees
of the Company or any Subsidiary which is in progress.
(e) No arbitration proceeding arising out of or
under any collective bargaining agreement is pending or, to the
knowledge of the Company, threatened against the Company or any
Subsidiary; and, to the knowledge of the Company, no basis for
any such claim for arbitration exists.
(f) No agreement, arbitration or court decision or
governmental order which is binding on the Company or any
Subsidiary expressly limits or restricts the Company or any
Subsidiary from relocating or closing any of its respective
operations.
(g) To the knowledge of the Company, there are no
official investigations, administrative proceedings or formal
complaints, formal charges of discrimination (including
discrimination based upon sex, age, race, religion, national
origin, sexual preference, disability, membership in trade unions
or being an employees' representative) pending or, to the
knowledge of the Company, threatened against the Company or any
Subsidiary.
(h) Neither the Company nor any Subsidiary has
within the last 90 days terminated the employment of or laid off
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any employee in circumstances which as of the Closing Date would
constitute a mass layoff (or with respect to BSH and its
Subsidiaries, as of the Closing Date constitute a "collective
redundancy" within the meaning of the Royal Decree of May 24,
1976), and any prior dismissals constituting mass layoffs or
collective redundancies have been totally and definitively
settled.
3.11 Employees.
(a) To the knowledge of the Company, Section 3.11
of the Disclosure Schedule lists the names of all employees in
the service of the Company and/or any Subsidiary as of April 26,
1996, as well as the date each of them entered into the service
of the Company or any Subsidiary, the date of birth, function,
the current salary, any material special benefits or allowances
and, with respect to the forty most-highly compensated employees,
the fringe benefits and any unusual labor condition which may
apply. At the Closing, the Sellers will deliver a list of all
employees in the service of the Company and/or any Subsidiary as
of June 28, 1996 (June 29, 1996 for CCP).
(b) Except as disclosed in Sections 3.09, 3.11 or
3.18 of the Disclosure Schedule:
(i) There are no training schemes,
arrangements or proposals, whether past or present, in
respect to which under the statutes or any collective
bargaining agreement a levy may henceforth become payable by
the Company or a Subsidiary.
(ii) Since December 31, 1995, other than
pursuant to collective bargaining agreements, neither the
Company nor a Subsidiary has paid or given any unusual
increase in or improvement to the emoluments or benefits of
or any bonus to any of the members of its board of directors
or to its employees or retirees, and neither the Company nor
a Subsidiary is under any obligation to increase or improve
any such emoluments, benefits or bonus, with or without
retrospective operation.
(iii) No past or present member of the board
of directors of the Company or a Subsidiary, and no employee
or group of employees has, singly or in the aggregate, a
material claim or claims against the Company or a Subsidiary
for loss of directorship or employment or arising out of the
termination prior to the Closing Date of his or her
directorship or employment (including redundancy payment),
and to the knowledge of the Company there is no event which
would give rise to such material claim.
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3.12 Bank Accounts. Section 3.12 of the Disclosure
Schedule lists each bank or financial institution in which the
Company or any Subsidiary has an account or safe deposit box
(giving the address and account numbers) and the names of the
persons authorized to draw thereon or to have access thereto.
3.13 Environmental Matters.
(a) Section 3.13 of the Disclosure Schedule
contains a listing of the real property which the parties to this
Agreement have agreed shall not be the subject of certain of the
representations and warranties contained in this Section 3.13
(the "Onsite Property"). Any real property not described in
Section 3.13 of the Disclosure Schedule shall be referred to
herein as "Offsite Property." Except as disclosed in Section
3.13 of the Disclosure Schedule:
(i) To the knowledge of the Company, except
as reflected in the Gibb Report, the Company and each
Subsidiary (A) have obtained all material permits, licenses
and other material authorizations and filed all material
notices which are required to be obtained or filed by them
for the operation of their respective businesses under
applicable Environmental Laws; (B) have been and are in
compliance in all material respects with all terms and
conditions of such required material permits, material
licenses and material authorizations; and (C) have been and
are in compliance in all material respects with all other
applicable limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and
timetables contained in any Environmental Laws to the extent
that any such noncompliance could result in a material
adverse effect on the business of the Company taken as a
whole;
(ii) With respect to Offsite Property, there
are no ongoing, or imminent, public formal governmental
investigations of the Company or any Subsidiary pursuant to
any Environmental Laws;
(iii) With respect to Offsite Property,
neither the Company nor any Subsidiary has any liability for
or has assumed responsibility for the monitoring,
investigation or cleanup of any environmental contamination;
(iv) With respect to Offsite Property,
neither the Company nor any Subsidiary nor any predecessor
in interest has received notice that it has been identified
as a potentially responsible party at, or other than in the
ordinary course of business, received a request for
information pursuant to any Environmental Laws related to,
any contaminated or previously contaminated site;
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(v) With respect to Offsite Property,
neither the Company nor any Subsidiary nor any predecessor
in interest has been requested to indemnify another party or
contribute towards the monitoring, investigation or cleanup
costs of any contaminated or previously contaminated site;
(vi) With respect to Offsite Property, there
are no underground fuel, oil or chemical storage tanks,
above-ground fuel, oil or chemical storage tanks, surface
impediments of an environmentally hazardous nature,
landfills, polychlorinated biphenyls and/or friable asbestos
on, under or within any Offsite Property used at any time by
the Company or any Subsidiary; and
(vii) With respect to Offsite Property,
there are no past or present events, conditions,
circumstances, activities, practices, incidents, actions or
plans which have materially interfered with or prevent
continued compliance by the Company or any Subsidiary with
Environmental Laws in all material respects.
(b) As used in this Agreement, "Environmental
Laws" means any current legislation, statute, law, code,
ordinance, rule or regulation, as well as any plan, order,
decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder, binding upon the
Company or a Subsidiary and relating to (i) the emission of
pollutants or hazardous substances into the air, (ii) the
discharge of pollutants into the waters, (iii) the disposal of
hazardous waste, (iv) the release and/or threatened release of
hazardous substances into the environment, or (v) the
manufacture, processing, distribution, presence (including,
without limitation, any right-to-know laws), use, handling,
treatment, storage, transportation or disposal of any chemical,
substance, material or waste that has been listed as toxic or
hazardous by any Governmental Authority and/or (vi) the
protection of the environment and/or of public health and safety.
3.14 Insurance Policies. Section 3.14 of the
Disclosure Schedule lists all insurance policies currently in
force naming the Company or any Subsidiary as an insured or
beneficiary or as a loss payable payee or for which the Company
or any Subsidiary has paid during the 18 month period preceding
the date of this Agreement or is currently obligated to pay all
or part of the premiums. Except as set forth in Section 3.14 of
the Disclosure Schedule, neither the Company nor any Subsidiary
has received notice (excluding notice of a premium increase or
contract expiration date) of any pending or, to the knowledge of
the Company, threatened termination or retroactive premium
increase with respect thereto, and, to the knowledge of the
Company, the Company and each Subsidiary is in compliance with
all conditions contained therein, the noncompliance with which
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could result in termination of insurance coverage or increased
premiums for prior or future periods. There are no pending
material claims against current or prior insurance by the Company
or any Subsidiary as to which insurers have denied liability, and
there exists no material claim under current or, to the knowledge
of the Company, prior insurance that has not been timely and
properly filed by the Company or any Subsidiary.
3.15 Contracts and Commitments. Except as set forth in
Section 3.01 (with respect to agreements with former
shareowners), Section 3.04, Section 3.15 or any other section of
the Disclosure Schedule, neither the Company nor any of its
Subsidiaries is currently bound by an agreement or contract which
meets any of the following criteria:
(a) for any matter not in the ordinary course of
business and which continues for a period of more than 12 months
from Closing (without a right for the Company to terminate) or
requires payments, individually or in the aggregate, in excess of
$150,000;
(b) any marketing agreement or understanding
which continues (without a right for the Company to terminate)
for a period longer than twelve months from Closing or which
requires payments individually or in the aggregate in excess of
$150,000 (excluding point of sale materials, marketing and
novelty items and other marketing contributions in kind) and
which is not materially consistent with past practice;
(c) restricting the right of either the Company
or any Subsidiary to compete, whether by restricting territories,
customers or otherwise, in any line of business or territory
other than Bottling Authorizations and toll packing agreements
and other than customary customer or distribution agreements
entered into consistent with past practice;
(d) other than in the ordinary course of business
requiring the Company or any Subsidiary to purchase its
requirements for any goods or services which continues for a
period of more than 12 months or requires payments in excess of
$150,000 (other than pursuant to Bottling Authorizations and
pursuant to pool purchasing arrangements administered by
affiliates of the Seller and with respect to vehicles and vehicle
maintenance);
(e) with any officer, director or shareholder
(other than pursuant to Bottling Authorizations or toll packing
agreements, pursuant to pool purchasing agreements administered
by affiliates of the Seller, or agreements with the Seller
relating to customer or consumer marketing activities) of the
Company or a Subsidiary, with any spouse, in-law, child, sibling
or parent of any such person or with any company or other
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organization in which any of the foregoing has, to the Company's
knowledge, a material direct or indirect financial interest,
excluding investments in public companies and employment
contracts disclosed in any Disclosure Schedule;
(f) relating to participation in a business
association conducted as a cooperative (other than pursuant to
arrangements with Nestle beverages and pool purchasing
arrangements administered by affiliates of the Seller),
partnership or joint venture;
(g) for political contributions or for charitable
contributions;
(h) granting a continuing or ongoing power of
attorney other than pursuant to the Company's Chart of Authority;
(i) other than as disclosed in Section 3.03 of
the Disclosure Schedule, outstanding loans, loan commitments,
factoring or credit line agreements (excluding credit extended in
the ordinary course of business to purchasers of inventory) to
any person ("Third-Party Loans") or any subordination agreement
executed by the Company or a Subsidiary relating to any of the
Third-Party Loans;
(j) other than in the ordinary course of business
relating to the distribution of products by the Company or any
Subsidiary which continue for a period of more than 12 months
from closing without a right for the Company to terminate or
require payments in the aggregate in excess of $150,000 (other
than Bottling Authorizations);
(k) guarantees, other than guarantees listed in
Section 3.03 of Disclosure Schedule;
(l) requiring the Company or any Subsidiary to
share profits, revenues or cash flows (other than Employee
Benefit Plans disclosed in Section 3.11 of the Disclosure
Schedule); or
(m) any consulting contract which continues for a
period of more than 12 months following the Closing without a
right for the Company to terminate or requires payments in the
aggregate in excess of $150,000.
3.16 Intellectual Property Rights. Except with respect
to rights granted to the Company or a Subsidiary in connection
with Bottling Authorizations and copyrights obtained by CCBSA in
the normal course of business in connection with specific Company
advertising programs, Section 3.16 of the Disclosure Schedule
sets forth a list and description of (i) all trademarks, service
marks, trademark registrations, trademark and service mark
26
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registration applications, copyrights, inventions, patents and
patent applications owned by the Company or a Subsidiary (the
"Intellectual Property Rights"), and the jurisdiction in or by
which such Intellectual Property Rights have been registered,
filed or issued, (ii) all trade names owned or used by the
Company or a Subsidiary and the jurisdictions in which such trade
names have been registered or filed, and (iii) all contracts,
agreements or understandings pursuant to which the Company or a
Subsidiary has authorized any person to use, or any person has
the right to use, in any business or commercial activity, any of
the items listed in clauses (i) and (ii) above. The Company or a
Subsidiary owns or has the exclusive right to use free of any
liens the Intellectual Property Rights. The validity of the
Intellectual Property Rights is not the subject of any claim or
demand of any person relating to, or any proceedings which are
pending or, to the knowledge of the Company, threatened which
challenge, the rights of the Company or a Subsidiary in respect
of the Intellectual Property Rights. The Company does not know
of any valid basis for any such claim. The use of the
Intellectual Property Rights by the Company or a Subsidiary does
not infringe on the rights of any person or entity. The Company
has no knowledge of any party which is infringing or has
infringed the Intellectual Property Rights. Section 3.16 of the
Disclosure Schedule discloses a third party's alleged
infringement of a KO trademark used by CCBSA.
3.17 Certain Violations of Law.
(a) Neither the Company nor any Subsidiary nor
any predecessor in interest is, nor has it 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 Law relating to any Antitrust Laws to the extent that
any such violation would have a material adverse effect on the
business or prospects of the Company and its Subsidiaries, taken
as a whole. As used herein, "Antitrust Laws" shall mean any and
all applicable antitrust, competition and unfair trade laws,
rules and regulations. The Company, each Subsidiary, and all
employees or agents of the Company or a Subsidiary with pricing
authority or power to bind the Company or a Subsidiary or any
predecessor in interest (collectively, the "Company Parties") are
and have been in compliance with all Antitrust Laws in all
material respects, and the business of the Company and each
Subsidiary and each predecessor in interest has been conducted in
compliance in all material respects with the Antitrust Laws.
Except as disclosed in Sections 3.17 or 3.18 of the Disclosure
Schedule, there is no formal investigation or formal proceeding
relating to Antitrust Laws pending or to the Company's knowledge,
threatened against any of the Company Parties.
(b) Except as disclosed in Section 3.17(b) or
3.18 of the Disclosure Schedule, the Gibb Report, or as otherwise
27
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disclosed to and accepted in writing by Buyer, neither the
Company nor any Subsidiary is, nor has it 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 Law to the extent that any such violation would have a
material adverse effect on the business or prospects of the
Company and its Subsidiaries, taken as a whole; provided that the
representations contained in this Section 3.17 shall not apply to
(i) violations which under the terms of this Agreement are
required to be disclosed with respect to specific representations
and warranties elsewhere in this Agreement; and (ii) violations
with respect to On-Site Property.
3.18 Litigation. Section 3.18 of the Disclosure
Schedule (i) sets forth all material litigation, claims, suits,
actions, arbitrations, investigations or administrative,
regulatory or other proceedings pending or, to the knowledge of
the Company, threatened against the Company or any Subsidiary or
involving any of their respective properties or businesses and
(ii) indicates which of such matters are being defended by an
insurance carrier, and which of the matters being so defended are
being defended by an insurance carrier which has given notice to
the Company that such matter may not be covered by insurance.
None of the matters listed in Section 3.18 of the Disclosure
Schedule (singly or in the aggregate) will result in a material
adverse effect on the business or financial condition of the
Company and its Subsidiaries, taken as a whole. Except with
respect to the Distri-One Litigation or as set forth in Section
3.18 of the Disclosure Schedule, there are no unsatisfied
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
the Company or any Subsidiary. Except as set forth in Sections
3.15 or 3.18 of the Disclosure Schedule, no present or former
officer or director of the Company or any Subsidiary has or will
have any claim for indemnification from the Company or any
Subsidiary related to any act or omission prior to the Closing
Date by such present or former officer or director.
3.19 No Material Defaults. Except as otherwise
disclosed herein or in Section 3.19 of the Disclosure Schedule or
in any other section of the Disclosure Schedule to this
Agreement, neither the Company nor any Subsidiary (i) is in
default in connection with any material agreement or other
material commitment to which it is a party or by which it is
bound and which is required to be disclosed in the Disclosure
Schedule (a "Material Agreement"); (ii) is party to any Material
Agreement which would give the other party the right to terminate
or amend such agreement upon the consummation of the
Transactions; or (iii) has received any notice of cancellation or
termination in connection therewith. Except as set forth herein
or in Section 3.19 of the Disclosure Schedule or in any other
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Section of the Disclosure Schedule to this Agreement, all
Material Agreements are enforceable in all material respects in
accordance with their terms in a manner that obtains for, or
imposes upon, the parties the intended primary benefits and
obligations of such agreements, subject to applicable bankruptcy,
insolvency, and other laws affecting the enforceability of
creditors' rights generally and the discretion of courts in
granting equitable remedies. To the knowledge of the Company:
(i) there are no pending or threatened bankruptcy, insolvency, or
similar proceedings with respect to any party to such Material
Agreements resulting in a material credit or business expense for
the Company or a Subsidiary, and (ii) no event has occurred which
(whether with or without notice, lapse of time or the happening
or occurrence of any other event) constitutes a default
thereunder by either the Company, any Subsidiary or any other
party thereto.
3.20 Major Suppliers and Customers. Excluding
relationships under Bottling Authorizations, Section 3.20 of the
Disclosure Schedule lists the five largest (in terms of cost to
the Company) suppliers of goods or services to, and the ten
largest (in terms of Company revenue) customers of the Company
and its Subsidiaries, taken as a whole, together with in each
case the amount billed during the 12-month period ended December
31, 1995. Since December 31, 1995, neither the Company nor any
Subsidiary has received any notice or other communication
(written or, to the knowledge of the Company, oral) from any of
the suppliers or customers listed in Section 3.20 of the
Disclosure Schedule terminating or reducing in any material
respect, or setting forth an intention to terminate or reduce in
any material respect in the future, or otherwise reflecting a
material adverse change in the business relationship between such
customer or supplier, on the one hand, and the Company and its
Subsidiaries, taken as a whole, on the other. To the knowledge
of the Company, the consummation of the transactions contemplated
hereunder will not have an adverse effect on the business
relationship of the Company and its Subsidiaries, taken as a
whole, with any such supplier or customer. To the knowledge of
the Company, none of the officers or directors of the Company or
a Subsidiary or the spouse, in-law, child, parent or sibling of
any such officer or director, or any company or other
organization in which any officer or director of the Company or a
Subsidiary or any spouse, in-law, child, parent or sibling of any
such officer or director has a direct or indirect financial
interest, has any material financial interest in any supplier or
customer of the Company or a Subsidiary, excluding investments in
public companies.
3.21 Required Governmental Licenses and Permits. To
the knowledge of the Company, except as set forth in Section 3.21
of the Disclosure Schedule or as referenced in the Gibb Report,
the Company and each Subsidiary have all material licenses,
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material permits or other material authorizations of Governmental
Authorities necessary for the production and sale of their
respective products and all other material licenses, material
permits or other material authorizations of governmental
authorities necessary for the conduct of their respective
businesses. A list of such material licenses, material permits
and material authorizations is set forth in Section 3.21 of the
Disclosure Schedule.
3.22 Other.
(a) No representation or warranty concerning the
Company or any Subsidiary in this Agreement, the Disclosure
Schedule to this Agreement or the certificate furnished to Buyer
pursuant to Section 7.05(a), contains or will contain as of the
date made any untrue statement of a material fact, or to the
knowledge of the Company omits to state a material fact,
necessary to make the statements herein or therein not
misleading.
(b) Any item disclosed in one section of the
Disclosure Schedule shall be deemed disclosed for purposes of any
other section of the Disclosure Schedule; provided, however, that
any document, agreement, authorization, or legal instrument
generally referenced in the Disclosure Schedule shall be deemed
disclosed in full with respect to the Disclosure Schedule Section
and issue for which it is specifically identified and referenced,
provided the full text of such document, agreement, authorization
or legal instrument has been made available to Buyer or its
agents and representatives.
3.23 Copies. True and correct copies of all documents
referred to in the Disclosure Schedule have been made available
by the Company to the Buyer.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND ENTERPRISES
Buyer and Enterprises hereby represent and warrant to
the Sellers as follows, with full knowledge that such
representations and warranties are a material consideration and
inducement to the execution of this Agreement by the Sellers and
the consummation of the transactions contemplated hereunder:
4.01 Organization and Authorization of the Buyer. Each
of Buyer and Enterprises is a corporation duly organized, validly
existing and in good standing under the laws of the state of
Delaware 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.
30
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4.02 Authorization. At the Closing,
(a) Each of Buyer and Enterprises shall have the
full corporate power and authority to enter into this Agreement
and all other agreements, documents and certificates contemplated
or required of it hereby (collectively, the "Buyer's Documents")
and, subject to the Required Statutory Approvals, to consummate
the transactions contemplated hereby; and
(b) The execution and delivery by Buyer and
Enterprises of this Agreement and each of Buyer's Documents by
Buyer and Enterprises will have been duly and validly authorized
by all necessary action on the part of Buyer and Enterprises.
This Agreement and each of Buyer's Documents will have been duly
and validly executed and delivered by Buyer and Enterprises and
will constitute the valid and binding agreements of Buyer and
Enterprises, enforceable against Buyer and Enterprises in
accordance with their respective terms, except to the extent the
enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether such enforceability
is considered in a proceeding in law or in equity.
4.03 Noncontravention. The execution and delivery of
this Agreement and each of Buyer's Documents by Buyer and
Enterprises and the consummation by Buyer and Enterprises of the
transactions contemplated hereby and thereby will not, subject to
approval by the Affiliated Transaction Committee and the Boards
of Directors of Enterprises and Buyer, (i) violate or conflict
with any provision of the articles of incorporation or bylaws of
Buyer or Enterprises; (ii) breach, violate or constitute an event
of default (or an event which with the lapse of time or the
giving of notice, or both, would constitute an event of default)
under, or give rise to any right of termination, cancellation,
modification or acceleration under, any note, bond, indenture,
mortgage, security agreement, lease, franchise or other material
agreement, instrument or obligation to which either of Buyer or
Enterprises is a party, or by which either of Buyer or
Enterprises or any of their respective properties or assets is
bound, or result in the creation of any lien, claim or
encumbrance or other right of any third party of any kind
whatsoever upon the properties or assets of Buyer or Enterprises
pursuant to the terms of any such instrument or obligation, which
breach, violation, or event of default would result in a material
adverse effect on either of Buyer or Enterprises; (iii) violate
or conflict with any law, statute, ordinance, code, rule,
regulation, judgment, order, writ, injunction, decree or other
instrument of any federal, state, local or foreign court or
governmental or regulatory body, agency or authority applicable
to either of Buyer or Enterprises or by which any of their
respective property or assets may be bound (assuming receipt of
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the Required Statutory Approvals), excluding from the foregoing
clauses (ii) and (iii) such violations, conflicts, breaches,
defaults, terminations, accelerations or creations of liens,
security interests, charges or encumbrances that would not, in
the aggregate, have a material adverse effect on the business,
operations, properties, assets, condition (financial or other),
results of operations or prospects of either of Buyer or
Enterprises, taken as a whole; or (iv) require, on the part of
either of Buyer or Enterprises, any filing or registration with,
or permit, license, exemption, consent, authorization or approval
of, or the giving of any notice to, any governmental or
regulatory body, agency or authority, except for the Required
Statutory Approvals, other than such filings, registrations,
permits, licenses, consents, authorizations or approvals which,
if not made or obtained, as the case may be, would not, in the
aggregate, have a material adverse effect on the ability of Buyer
and Enterprises to perform their obligations hereunder and to
consummate the Transactions.
4.04 Other. To the knowledge of each of Buyer and
Enterprises, no representation or warranty by the Buyer in this
Agreement, the schedules to this Agreement or the certificate
furnished to the Sellers pursuant to Section 7.06(a), contains or
will contain as of the date made any untrue statement of a
material fact, or to the knowledge of Buyer and Enterprises omits
to state a material fact, necessary to make the statements herein
or therein not misleading.
ARTICLE V
OTHER AGREEMENTS
5.01 Continuing Operation of Business. Each Seller
covenants and agrees that it will cause the Company and each
Subsidiary to do or refrain from, as the case may be, the
following, on and after the date of this Agreement and until the
Closing hereunder (except upon the prior consultation and
agreement of the Buyer or as otherwise contemplated herein):
(a) To carry on its business in the ordinary and
regular course and not engage in any material transaction or
material activity or enter into any material agreement or make
any material commitment except in the ordinary course of business
consistent with past practice, in accordance with the 1996 Budget
as revised from time to time consistent with past practice or the
Rolling Estimate, or pursuant to existing capital expenditure
budgets and commitments;
(b) Except in connection with the Capital
Reduction, to carry on its business in all material respects in
the same manner as currently conducted, and not institute or
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commit to institute any material new methods of manufacture,
purchase, sale, lease, management or operations;
(c) Not to change or amend its statuts or other
governing instruments or bylaws or appoint or elect any person or
director or officer who is not serving as such on the date
hereof;
(d) Except with respect to transfers for value in
connection with the establishment of KO's French Region Office
upon consultation with Enterprises and the proposed Capital
Reduction for CCBSA, not to declare, pay or set aside for payment
any dividend or other distribution of assets in respect of its
capital stock, and not redeem, purchase or otherwise acquire any
such stock;
(e) Except in connection with the Capital
Reduction, not to 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, sale or redemption of,
any of its capital stock or any securities or obligations
convertible into or exchangeable for any shares of its capital
stock, or otherwise make changes in its capital structure;
(f) Not to organize any subsidiary, acquire any
capital stock or other equity securities of any other
corporation, or acquire any equity or ownership interest in any
business, and not merge with, liquidate into or otherwise combine
with any other business, person or entity;
(g) To preserve its corporate existence and
business organization intact, and undertake in good faith to
preserve in all material respects its relationships with
suppliers, customers and others having business relations with
it;
(h) Except in connection with the Capital
Reduction, or to repay principal and interest on intercompany
obligations to KO as reflected in Section 3.03 of the Disclosure
Schedule not to incur any Indebtedness For Borrowed Money in
excess of $300,000, or make drawings under any line of credit
other than in the ordinary course of business, nor guarantee any
material obligation, nor permit or suffer any of its assets to be
subjected to any mortgage, pledge, lien, security interest,
encumbrance, restriction or charge of any kind, except for
purchase money security interests and endorsements of checks in
the ordinary course of business;
(i) Not to enter into, modify or terminate any
interest rate, commodity or foreign currency exchange, swap,
collar, cap or similar agreement pursuant to which the Company or
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a Subsidiary hedges its interest rate, foreign currency or
commodity exposure;
(j) Not to make any voluntary prepayment of
indebtedness, even if otherwise permitted by the terms of such
indebtedness, provided, that nothing in this Section 5.01 shall
be deemed to prohibit it from making scheduled payments on its
existing indebtedness;
(k) Not to grant or announce any increase in the
compensation of or benefits to its officers, directors, or
employees, or retirees whether now or hereafter payable, except
scheduled increases and bonuses based on policies currently in
effect and the regular promotion of employees or otherwise in the
ordinary course of business consistent with past practice or in
accordance with the 1996 Budget or the Rolling Estimate;
(l) Not to make any capital expenditure and not
make any new commitment for additions to property, plant or
equipment in excess of $100,000 per item except in the case of an
expenditure necessitated by a loss which is covered by insurance
and except in accordance with the 1996 Budget or the Rolling
Estimate;
(m) Not to enter into, without using reasonable
efforts to consult with Buyer, material marketing commitments
with significant soft drink licensors or customers other than in
the ordinary course of business consistent with past practices;
(n) To use its reasonable best efforts to keep
available the services of all employees and not enter into any
collective bargaining or other labor agreements or commit to hire
or terminate any employee except in the ordinary course of
business;
(o) Except for the potential sale of BSH's
industrial parcel of land in Boutersem or in connection with the
formation of KO's Region Office, not to dispose of any asset
(including, without limitation, any interest in a Subsidiary)
having a net book value in excess of $100,000, except in the
ordinary course of business consistent with past practice or in
accordance with the 1996 Budget or the Rolling Estimate;
(p) Not to make any change in any method of
accounting or accounting principle or practice used by it which
could have a material adverse effect on the financial statements
of the Company taken as a whole; and
(q) Not to defer beyond the Closing Date any
expenditures to fund Employee Benefit Plans which, in accordance
with the normal practice of the Company, would have been made
prior to the Closing Date.
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5.02 Post-Closing Covenants of Enterprises, Buyer and
the Companies. Following the Closing, Enterprises and Buyer will
cause, and each of the Companies will:
(a) Until December 31, 1998, continue purchasing
items currently purchased by each Company through KO's existing
European purchasing arrangements;
(b) Pursue good faith discussion with KO aimed at
achieving, by December 31, 1998, an appropriately structured
cooperative arrangement under which procurement services will be
provided for KO's Greater European bottling system, including
each of the Companies;
(c) Continue to participate, at financial levels
proportionately similar (in terms of percentages of amounts
allocated to the Companies, on the one hand, and KO and its
affiliates on the other hand) to those for the 12 months
preceding the Closing, in costs for existing customers and
marketing arrangements entered into by KO and/or affiliates of KO
(other than the Companies), directly with such customers or
marketing partners, the Sellers or the Companies with respect to
the territories of each of the Companies; and
(d) Continue CCBSA's participation in connection
with existing contracts between KO and/or its affiliates
(including the Companies) and Jean-Claude Killy on terms
substantially similar to those for the 12 months preceding the
Closing.
5.03 Pursuit of Claims. Following the Closing, if any
of the Buyer's Protected Parties suffers (or has suffered) a Loss
in respect of which a Seller or a Company or Subsidiary is
entitled to recover all or any part of such Loss from any prior
owner of any of the Companies or Subsidiaries or any predecessor
in interest of such Company or Subsidiary (a "Prior Owner"), the
Buyer and Sellers shall cooperate (including by making available
files and records, to each other, as appropriate) and shall
exercise best efforts to assert and vigorously pursue such claim
against and obtain recovery from such Prior Owner. Any net
amounts recovered from a Prior Owner and paid to Buyer (or to the
relevant Company or Subsidiary) shall be applied against Sellers'
indemnification obligations under Article VI of this Agreement.
Accordingly, if a Company, Subsidiary, Buyer or Enterprises
recovers from a Prior Owner in respect of any such Loss, the
amount recovered (reduced by reasonable expenses incurred in
obtaining such recovery and taking into account taxation in the
hands of the recipient) shall be applied against and reduce the
relevant Seller's indemnification obligation such that to the
extent such Seller has already satisfied its corresponding
indemnification obligation such amount shall be repaid to it or
to the extent a Seller recovers from a Prior Owner and such
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Seller has not yet indemnified Buyer in respect of the
corresponding Claim, such Seller shall pay (or cause to be paid)
to Buyer the amount thus recovered, and any amount thus paid to
Buyer shall be applied against and reduce Sellers'
indemnification obligations under Article VI. Buyer and the
Companies will advise Sellers and KO (and conversely Sellers and
KO shall advise Buyer and Enterprises) of any Losses that may be
pursued against a Prior Owner. Buyer and Enterprises will seek
Sellers' and KO's guidance in connection with the pursuit of
claims against a Prior Owner and, at Sellers' cost and expense,
follow Sellers' and KO's reasonable instructions in this regard.
5.04 Expenses. Except as may be otherwise provided
herein, each party shall pay all costs and expenses incurred by
such party or on such party's behalf in connection with this
Agreement and the transactions contemplated hereby.
5.05 Brokerage Commissions. Sellers and Buyer hereby
represent and warrant for the benefit of the other parties that
no person, firm, corporation or other entity is entitled to any
brokerage commission or finder's fee in connection with any of
the transactions contemplated by this Agreement.
5.06 Access. For the purpose of conducting, at Buyer's
expense, a financial, business, environmental, and legal due
diligence review of the Company and its operations, the Sellers
agree that they shall (i) provide Buyer with such information as
Buyer may from time to time reasonably request with respect to
the Company and the transactions contemplated by this Agreement;
(ii) provide Buyer and their officers, counsel and other
authorized representatives access during regular business hours
to the facilities, books, records, officers, employees,
accountants (and the accounting work papers), lawyers and
consultants of the Company, as Buyer may from time to time
reasonably request; and (iii) permit Buyer to make such
investigation thereof as Buyer may reasonably request. All such
information which Buyer receives shall be held by Buyer and
Enterprises in confidence, shall not be disclosed to third
parties (except as required by applicable law and to
representatives of Buyer assisting Buyer in connection with the
Transactions and with respect to whom Buyer and Enterprises shall
require shall remain under the same confidentiality obligation)
and shall not be used by Buyer or Enterprises except for purposes
of evaluating the acquisition contemplated by this Agreement.
5.07 Other Offers. So long as this Agreement shall not
have been terminated, the Sellers shall not solicit or entertain
any offer for, or sell or agree to sell, or participate in any
business combination with respect to, any of the Shares or any of
the material assets of the Company, except as contemplated by
this Agreement, save and except in the usual and ordinary course
of business.
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5.08 Transfer Taxes. Each of the parties will use
their reasonable, good faith, legally permissible efforts to
minimize any sales, use and/or transfer taxes associated with the
transactions contemplated in this Agreement. All such sales and
use taxes and all stock transfer taxes (if any), stamp taxes
imposed by any jurisdiction, will be the sole responsibility of
Sellers.
5.09 Public Announcements. No public announcement shall
be made with regard to this Agreement or the transactions
contemplated by this Agreement without the prior consent of the
Sellers and Buyer; provided that either the Sellers or Buyer make
such disclosure if they are advised by their counsel that it is
required or advisable to do so by Applicable Law or US GAAP or
the prior disclosure policy of the Sellers or Buyer. The
Sellers, on the one hand, and the Buyer, on the other, agree that
they will not make any disclosures about the contents of this
Agreement or cause the contents hereof to be publicized in any
manner whatsoever by way of interviews, responses to questions or
inquiries, press releases or otherwise, or otherwise disclose any
aspect of the transactions provided for hereunder, without prior
notice to and approval of the other party, except as may
otherwise be required or be advisable by law or the prior
disclosure policy of the Sellers or Buyer. In the event that
either party determines that it is required to make any such
disclosure, it will notify the other party prior to making such
disclosure in order to permit the other party to obtain an
appropriate protective order. The Sellers and the Buyer will in
all events discuss any public announcements or disclosures
concerning the transactions contemplated by this Agreement with
the other party prior to making such announcements or
disclosures.
5.10 Deemed Short Period. The parties acknowledge that
under the law of the jurisdictions in which the Companies and
Subsidiaries file income tax returns, the taxable periods of the
Company and Subsidiaries will not end as of the Closing Date and
no separate income tax returns will be filed for the period
beginning January 1, 1996 through the Closing Date ("Deemed Short
Period"). As soon as possible after the Closing Date,
Enterprises and KO shall cause to be prepared a calculation of
the respective taxable income of the Companies and Subsidiaries
for the Deemed Short Period, which shall be acknowledged and
agreed to by Enterprises and KO. Except as otherwise specified,
for purposes of this Agreement, the Deemed Short Period shall be
treated as if it were a taxable period of the Companies and
Subsidiaries that ended as of the Closing Date.
5.11 Election under Section 338. KO acknowledges that
Enterprises may make an election under section 338(g) of the
Internal Revenue Code of 1986, as amended, with respect to
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Buyer's purchase of the stock of the Companies. Such an election
may also be made with respect to one or more of the Subsidiaries.
5.12 Other Tax Matters.
(a) No amended or substituted return for the
Companies and Subsidiaries for any taxable periods ending on or
before the Closing Date shall be filed by either party hereto (or
upon instructions of either party hereto) after the Closing Date
without the prior written consent of the other party; provided
however, that in determining whether to give such consent, the
party whose consent is requested shall not act unreasonably.
Costs relating to such amended or substituted returns, including
attorneys' and accountants' fees and other expenses, shall be
paid by the party initiating the request that such amended or
substituted returns be filed.
(b) Before execution of any extensions of the
statutes of limitation for the Companies and Subsidiaries for a
taxable period ending on or before the Closing Date, KO shall
notify Enterprises. After the Closing Date, Enterprises shall
seek the consent of KO (which consent shall not be unreasonably
withheld or delayed) prior to the execution of any extension of
the statute of limitations for the Companies and Subsidiaries for
taxable periods ending on or before the Closing Date. After the
Closing Date, Enterprises shall notify KO prior to the execution
of any extension of the statute of limitation for the Companies
and Subsidiaries for any taxable period which includes the Deemed
Short Period.
5.13 CCBSA Minority Shareholders. The Buyer undertakes
following the Closing to hold itself out as willing to acquire
the shares of CCBSA held by the minority shareholders indicated
in Section 3.01(c) of the Disclosure Schedule at the per share
purchase price set forth in Exhibit A irrespective of whether
such buyout is required by Applicable Law.
5.14 Retiree Plans. Enterprises shall cause the
Companies and their Subsidiaries to continue in effect the
retiree benefits as described in Section 3.09 of the Disclosure
Schedule; provided, however, that the Companies and their
Subsidiaries shall not be required to keep such retirees in the
same plans but may provide such coverage to them through new
plans.
ARTICLE VI
INDEMNIFICATION
6.01 Certain Definitions. For the purposes of this
Article VI, the following definitions shall apply:
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"Affected Seller" means any Seller against whom a Claim
is asserted.
"BSH Protected Parties" means BSH, its Subsidiaries,
the Buyer, Enterprises and their respective successors and
assigns.
"Buyer's Protected Parties" means, collectively, the
BSH Protected Parties, the CCBSA Protected Parties and the CCP
Protected Parties (as defined below).
"CCBSA Protected Parties" means CCBSA, its
Subsidiaries, the Buyer, Enterprises and their respective
successors and assigns.
"CCP Protected Parties" means CCP, the Buyer,
Enterprises and their respective successors and assigns.
"Claim" or "Claims" means, as the context may require,
a claim or claims for Losses asserted under this Article VI by
the Buyer on behalf of any of Buyer's Protected Parties against
any Seller.
"Claimant" means the person or entity asserting a
Claim.
"Finally Resolved" means that the amount due to the
Buyer has been finally determined under the provisions of Section
6.06 or by the decision of a court of competent jurisdiction from
which there is no further appeal.
"Composite Rate" means for any month in which interest
is earned hereunder, a rate equal to the 30-day commercial paper
rate of interest (on high-grade unsecured notes sold through
dealers by major corporations) as published in the Money Rates
column of The Wall Street Journal on the second Business Day of
the month for the first Business Day of the month.
"Loss" or "Losses" means any loss, damage, liability,
cost or expense including, without limitation, any interest,
fine, penalty, criminal or civil judgment or authorized
settlement, court costs, reasonable attorneys and expert
witnesses fees, disbursements and expenses, and any
indemnification or similar payments required to be made to
officers, directors, employees or agents under duly enacted
provisions of articles of incorporation or bylaws, board
resolutions or undertakings, commitments or other understandings
or applicable corporate law, together with interest thereon from
the date suffered or incurred at the Composite Rate. A "Loss"
shall be defined as being net of any related net tax reductions
or benefits relating to such Loss reasonably expected to be
received by the Companies, their Subsidiaries, Buyer's Protected
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Party or Enterprises. The parties agree that the following items
shall be excluded from the definition of "Loss" such that no
party shall have any obligation with respect to such matters
under the provisions of this Article VI: (i) all indirect or
consequential damages of any kind or nature including loss of
prospective profits, business prospects, sales or business
opportunities; (ii) all losses, reductions or unavailability of
corporate income tax loss carry-forwards, regardless of whether
or not the benefit of such loss carry-forwards has been reflected
in the Companies' financial statements through the Closing Date;
and (iii) the loss or inability of any Buyer, Company or
Subsidiary of any Company to claim Tax deductions for interest
with respect to any indebtedness of any of the Companies.
6.02 Remedies. Except as otherwise expressly limited
by this Article VI:
(a) Each CCBSA Seller shall severally, but not
jointly, indemnify, defend and hold harmless the CCBSA Protected
Parties from any and all Losses suffered or incurred by the CCBSA
Protected Parties as a result of, or with respect to, any breach
of any representation or warranty made by such CCBSA Seller in
Article II of this Agreement.
(b) The CCBSA Sellers shall jointly and severally
indemnify, defend and hold harmless the CCBSA Protected Parties
from any and all Losses suffered or incurred by the CCBSA
Protected Parties as a result of, or with respect to the
following matters:
(i) Any breach of any representation or
warranty made by the CCBSA Sellers in Article III of this
Agreement with respect to CCBSA or its Subsidiaries;
provided, however, that the CCBSA Sellers will not be liable
for a breach or inaccuracy of any representation or warranty
that relates to the Onsite Property listed on Schedule 3.13
of the Disclosure Schedule except as provided in Section
6.02(b)(iii);
(ii) Any breach or noncompliance by the CCBSA
Sellers with any covenant or agreement of the CCBSA Sellers
contained in this Agreement;
(iii) All items set forth as being the
responsibility of KO and the CCBSA Sellers in the
environmental responsibility allocations which the Buyer and
KO have reviewed and agreed upon and which have been
initialed by the parties relating to Onsite Property and
delivered in connection with this Agreement (the
"Environmental Responsibility Allocations");
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(iv) Any breach of the representations and
warranties contained in Section 3.17(a), regardless of
whether disclosed or known, resulting from (A) the French
Competition Council's investigations of the complaints
brought by Orangina against CCBSA, or (B) the European
Commission's investigation of CCBSA based upon a complaint
brought by Orangina;
(v) Liability for Taxes (other than corporate
income Taxes) for periods ending on or prior to the Closing
Date in excess of the aggregate amounts accrued pursuant to
Section 3.06(d)(i) as liabilities for Taxes (other than
corporate income Taxes) of CCBSA and its Subsidiaries in the
Closing Date financial statements; and
(vi) Any liability for corporate income Taxes
for periods ending on or prior to the Closing Date.
(c) The CCP Seller shall indemnify, defend and
hold harmless the CCP Protected Parties from any and all Losses
suffered or incurred by the CCP Protected Parties as a result of,
or with respect to, any breach of any representation or warranty
made by CCP Seller in Article II of this Agreement.
(d) The CCP Seller shall indemnify, defend and
hold harmless the CCP Protected Parties from any and all Losses
suffered or incurred by the CCP Protected Parties as a result of,
or with respect to the following matters:
(i) Any breach of any representation or
warranty made by the CCP Seller in Article III of this
Agreement with respect to CCP; provided, however, that the
CCP Seller will not be liable for a breach or inaccuracy of
any representation or warranty that relates to Onsite
Property listed on Schedule 3.13 of the Disclosure Schedule
except as provided in Section 6.02(d)(iii);
(ii) Any breach or noncompliance by the CCP
Seller with any covenant or agreement of the CCP Seller
contained in this Agreement;
(iii) All items set forth as being the
responsibility of KO and the CCP Seller in the Environmental
Responsibility Allocations;
(iv) Any income Tax liability of CCP for
periods ending after the Closing Date through October, 1999
that is the result of CCP, KO or any subsidiary as to which
KO owns more than 50% of the voting stock taking any action
or failing to take any action prior to the Closing Date or
taking any action following the Closing with respect to
periods preceding the Closing Date (including the Deemed
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Short Period of CCP) that causes CCP to fail to meet the
requirements under applicable French law (including without
limitation Article 208 quinquies of the Code General des
Impots) and regulations for the Dunkerque Zone
D'Entreprises;
(v) Liability for Taxes (other than corporate
income Taxes) for periods ending on or prior to the Closing
Date in excess of the aggregate amounts accrued pursuant to
Section 3.06(d)(i) as liabilities for Taxes (other than
corporate income Taxes) of CCP and its Subsidiaries in the
Closing Date financial statements; and
(vi) Any liability for corporate income Taxes
of CCP for periods ending on or prior to the Closing Date in
excess of FF 1 million (relating to financial income and net
foreign currency gains of CCP for the Deemed Short Period).
(e) The BSH Seller shall indemnify, defend and
hold harmless the BSH Protected Parties from any and all Losses
suffered or incurred by the BSH Protected Parties as a result of,
or with respect to, any breach of any representation or warranty
made by such BSH Seller in Article II of this Agreement.
(f) The BSH Seller shall indemnify, defend and
hold harmless the BSH Protected Parties from any and all Losses
suffered or incurred by the BSH Protected Parties as a result of,
or with respect to the following matters:
(i) Any breach of any representation or
warranty made by the BSH Seller in Article III of this
Agreement with respect to BSH or its Subsidiaries; provided,
however, that the BSH Seller will not be liable for a breach
or inaccuracy of any representation or warranty that relates
to Onsite Property listed on Schedule 3.13 of the Disclosure
Schedule except as provided in Section 6.02(f)(iii);
(ii) Any breach or noncompliance by the BSH
Seller with any covenant or agreement of the BSH Seller
contained in this Agreement;
(iii) All items set forth as being the
responsibility of KO and the BSH Seller in the Environmental
Responsibility Allocations;
(iv) Any breach of the representations and
warranties contained in Section 3.17(a), regardless of
whether disclosed or known, resulting from the Distri-One
Litigation;
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(v) Subject to the provisions of Section
3.06(e), liability for Taxes (other than corporate income
Taxes) for periods ending on or prior to the Closing Date in
excess of the aggregate amounts accrued pursuant to Section
3.06(d)(i) as liabilities for Taxes (other than corporate
income Taxes) of BSH and its Subsidiaries in the Closing
Date Financial Statements; and
(vi) Subject to the provisions of Section
3.06(e), any liability for corporate income Taxes for
periods ending on or prior to the Closing Date in excess of
the amounts accrued on the Closing Date financial statements
pursuant to Section 3.06(d)(ii)(B).
(g) The Buyer shall indemnify, defend and hold
harmless the Sellers from any and all Losses suffered or incurred
by the Sellers as a result of, or with respect to the following
matters:
(i) Any breach of any representation or
warranty made by the Buyer in Article IV of this Agreement;
(ii) Any breach or noncompliance by the Buyer
with any covenant or agreement of the Buyer contained in
this Agreement; and
(iii) Any failure of any of the Companies
or their Subsidiaries following the Closing to honor their
obligations as they fall due to third parties existing on or
prior to the Closing Date, including without limitation,
with respect to indebtedness of the Companies and their
Subsidiaries.
6.03 Survival.
(a) The representations, warranties, covenants
and indemnities contained in this Agreement or any certificate or
document delivered pursuant to this Agreement shall not be
extinguished by the Closing but shall survive for a period of
eighteen months after the Closing Date, except for:
(i) the representations and warranties in
Article II and the covenants and indemnities related thereto
which shall not expire (except as otherwise provided by
law);
(ii) the representations and warranties in
Sections 3.06 and 3.17(a) and the covenants and indemnities
related thereto, which shall terminate 90 days after the
expiration of the relevant statute of limitations (including
any extension of the relevant statute by agreement or by
operation of law); and
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(iii) the indemnities contained in Sections
6.02(b)(iii), 6.02(d)(iii) and 6.02(f)(iii) which shall not
expire and the indemnities contained in Sections 6.02(b)(v)
and (vi), 6.02(d)(iv), (v) and (vi), and 6.02(f)(v) and
(vi), which shall terminate 90 days after the expiration of
the relevant statute of limitations (including any extension
of the relevant statute by agreement or by operation of
law).
(b) Subject to the provisions of Section 6.05(c),
no investigation or other examination of CCBSA, CCP, BSH or any
of the Subsidiaries by the Buyer shall affect the term of the
survival of the representations, warranties, covenants and
indemnities set forth above.
6.04 Deductible.
(a) The Buyer's Protected Parties shall not be
entitled to indemnification under this Article VI until the
aggregate amount of Claims for Losses asserted (whether
collectively or by any one of them) exceeds $1,000,000 (the
"Deductible"), and then only to the extent of such excess. As
set forth in Section 3.06(e), the Deductible shall be increased
by the amount, if any, by which the accrual described in such
Section exceeds Claims associated with the Tax liabilities of BSH
and its Subsidiaries.
(b) Notwithstanding the provisions of (a) above,
any claim of Loss pursuant to Sections 6.02(a), 6.02(b)(iii),
(iv), (v) or (vi), 6.02(c), 6.02(d)(iii), (iv),(v) and (vi),
6.02(e) or 6.02(f)(iii), (iv), (v) or (vi) shall not be subject
to the Deductible; however, the Buyer's Protected Parties shall
not be entitled to indemnification under Sections 6.02(b)(v),
6.02(d)(v) or 6.02(f)(v) unless and until the aggregate amount of
all Claims under such Sections exceeds $100,000 (at the exchange
rate as of the date of payment) and then only to the extent of
such excess.
6.05 Limitation upon Recovery.
(a) The aggregate liability hereunder of any
Seller shall not exceed that portion of the purchase price
allocated to such Seller pursuant to Section 1.02 of this
Agreement.
(b) The amount of any Loss suffered by an
indemnified party hereunder shall be reduced by the amount of any
recovery, including proceeds of insurance received or likely to
be received by, such indemnified party, provided such receipt is
expected in a commercially reasonable time period, (reduced by
any (i) Taxes payable with respect to such recovery and (ii)
reasonable expenses incurred in obtaining such recovery). If the
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recovery is received by an indemnified party after it has
received indemnification under this Article VI from a Seller,
then a refund equal to the recovery, after any reductions as
provided above, shall be made promptly to the Seller having paid
indemnification. Without limiting the foregoing, if a Claim in
favor of an indemnified party is created in connection with the
occurrence of a Loss which has not been collected by the
indemnified party at the time payment with respect to the Loss is
made under this Article VI, then the indemnified party shall
assign such Claim to the indemnifying party as a condition to the
payment of the Loss or, if the Claim cannot be assigned, then the
indemnified party shall use all commercially reasonable efforts
to collect the Claim for the benefit of, but at the direction and
expense of, the indemnifying party.
(c) Buyer acknowledges and agrees that: (i) to
the best of Buyer's knowledge, the Seller's representations and
warranties as set forth in this Agreement are accurate and
adequate and such representations and warranties do not contain
any inaccuracy or inadequate statement; and (ii) the Buyer
expressly waives any and all recourse under this Article VI
against any Seller and KO in relation to any misrepresentation
for which Buyer had knowledge. As used in this Agreement, the
term "to the knowledge of the Buyer" or "for which Buyer had
knowledge" or any variations thereof shall mean the state of
facts, conditions or circumstances which (i) is known to Norman
P. Findley, Joe Heinrich or Carol A. Benton or (ii) reasonably
should have been known to Norman P. Findley, Joe Heinrich or
Carol A. Benton including without limitation as a result of
disclosure by Sellers to Buyer of the text of the documents
referenced in Section 6.05(c) of the Disclosure Schedule;
provided, however, that Buyer's knowledge shall not be a bar to
indemnification pursuant to Sections 6.02(a), 6.02(b)(iii), (iv),
(v) and (vi),6.02(c), 6.02(d)(iii), (iv), (v) and (vi), 6.02(e)
and 6.02(f)(iii), (iv), (v) and (vi).
6.06 Notice and Resolution of Claim.
(a) Without extending the time periods provided
in this Article VI, the Buyer shall promptly notify KO, in
writing, of any facts with respect to which Buyer reasonably
believes it may wish to assert a Claim for recovery, specifying
in reasonable detail the nature of the Loss, the Seller from
which indemnity is requested, the facts which form the basis of
the Loss and, if known, the amount, or an estimate of the amount,
of the liability arising therefrom. Buyer's failure to deliver
timely notice to KO pursuant to this Section 6.06 shall not limit
Buyer's right to recover under Article VI, unless such failure
prejudiced any Seller's right to defend such Claim, in which case
the recovery shall only be limited to the extent the Seller was
prejudiced. The Buyer shall provide to KO as promptly as
practicable thereafter information and documentation reasonably
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requested by KO to support and verify the Claim asserted. KO is
hereby authorized to receive all notices of Claims on behalf of
all Sellers.
(b) After receipt of a notification of facts
which could give rise to a Claim, the Claimant, KO and the
Affected Seller(s) shall negotiate in good faith to reach
agreement as to (i) whether the claim is indemnifiable under this
Article VI, and, if so, (ii) the amount of the Loss. Upon
reaching such agreement, KO shall pay, or cause to be paid, to
Enterprises the agreed amount of the Loss, if any. In the event
that the Claimant, KO and the Affected Seller(s) are unable to
agree upon whether the Claim is indemnifiable under this Article
VI, or the amount of the Loss, any party may resort to
arbitration as provided in Section 6.08.
6.07 Defense.
(a) Except as set forth in 6.07(e) and
6.07(f)(ii), the Buyer shall conduct the defense of any
proceeding which could give rise to a Claim ("Proceeding"). KO
shall have the right to approve in advance all attorneys,
accountants, experts and others engaged by the Buyer to assist in
the defense of any Proceeding, which approval shall not be
unreasonably withheld or delayed, and all fee arrangements and
other compensation or reimbursement arrangements made by the
Buyer in connection with the defense of any Proceeding shall be
subject to the prior approval of KO, which approval shall not be
unreasonably withheld or delayed. KO shall be under no
obligation to approve or indemnify the Buyer for the cost of
engaging more than one law firm to assist in the defense of a
Proceeding, provided, however, that KO may give such approval in
its sole discretion, in which case the cost will be indemnified
if otherwise required under this Agreement. In the event a
Proceeding includes both claims, demands or other actions by a
third party for which the Buyer is entitled to be indemnified
under this Agreement and claims for which the Buyer is not
entitled to be so indemnified, the Buyer shall direct all
attorneys, accountants, experts and others engaged by the Buyer
to assist in the defense of such Proceeding to allocate their
fees and expenses between the two types of claims in the
preparation of their fee statements, and KO shall not be required
to indemnify the Buyer for the payment of any such fees and
expenses until such allocation has been made, and then only for
the portion allocated to the claims, demands or actions for which
the Buyer is entitled to be indemnified under this Agreement. KO
shall not be liable for any settlement of any Proceeding effected
without its prior written consent, which shall not be
unreasonably withheld or delayed.
(b) The Buyer acknowledges and agrees that the
defense and outcome of any Proceeding involving one or more
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questions of competition law may have an effect upon the manner
in which KO conducts its business throughout the European Union
and the EEA. The Buyer consequently undertakes to consult
closely with KO in the defense of any such Proceeding and to keep
KO closely informed of all developments therein in a timely
manner. Notwithstanding (a) above, because of the possible
effect of Proceedings involving questions of competition law on
KO, KO shall have the right to approve in advance in its sole
discretion, all attorneys, accountants, experts and others
engaged by Buyer to assist in the defense of such Proceedings.
(c) Subject to the prior written consent of KO,
statements, invoices and accounts rendered by attorneys,
accountants, experts and others engaged by the Buyer to assist in
the defense of a particular Proceeding or particular group of
Proceedings may be submitted to KO for approval and payment, to
the extent they may be indemnifiable under this Agreement, when
rendered. Before submitting them to KO, the Buyer shall review
such statements, invoices and accountants and shall determine
whether any of the amounts therein are excessive and shall advise
KO in the event of a determination that any such amounts are
excessive. The approval and payment by KO of statements,
invoices and accountings in accordance with this subparagraph (c)
shall be without prejudice to the right of KO to contest that the
amounts paid by it were indemnifiable under this Article VI
following final resolution of the Proceeding(s) in connection
with which the expenses were incurred.
(d) Upon final resolution of a Proceeding, the
Claimant, KO and the Affected Seller(s) shall negotiate in good
faith to reach agreement as to (i) whether such Proceeding gave
rise to a Claim that is indemnifiable under this Article VI, and
if so (ii) the amount of the Loss incurred by the Claimant. In
the event that the Claimant, KO and the Affected Seller(s) were
unable to agree upon whether the Claim is indemnifiable under
this Article VI, or the amount of the Loss, any party may resort
to arbitration as provided in Section 6.08.
(e) Upon written notice to Enterprises, KO shall,
at its sole cost and expense, direct the conduct of the defense
of any Proceedings that are pending and being defended at the
time of the Closing (such Proceedings which KO shall continue to
conduct include, without limitation, those specified on Section
6.07(e) of the Disclosure Schedule) and Enterprises agrees to
cooperate with KO in the defense of all such Proceedings and to
cause the Companies to execute and file or cause to be executed
and filed any documents that KO may reasonably deem to be
appropriate in connection with such defense. Buyer shall be
allowed to participate, through its counsel and at its sole cost
and expense, in such Proceedings and KO shall not settle any such
Proceedings without the prior consent of Buyer, which consent
shall not be unreasonably withheld or delayed.
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(f) With respect to Taxes:
(i) after the Closing, upon the receipt of
any notice, oral or written, of the audit, or any other
document from a taxing authority relating to a potential Tax
liability or adjustment of reported Taxes of the Companies
and Subsidiaries for the taxable periods ending before the
Closing Date, Enterprises will promptly notify KO, in
writing, of such notice, and KO shall promptly notify
Enterprises of any such notice received by the Sellers or
KO; and
(ii) if it so elects, by written notice to
Enterprises, KO may control, at its cost and expense, the
examination of Taxes (including any administrative appeal)
of the Companies and Subsidiaries, for any taxable periods
ending prior to the Closing Date; provided, however, that KO
shall keep Enterprises informed as to the status of all Tax
audits, examinations and administrative appeals for such
prior periods. If it is necessary or appropriate, in the
reasonable judgment of KO, to protest or pursue an
administrative appeal relating to any periods ending before
the Closing Date, then Enterprises agrees to execute and
file, or cause to be executed and filed, on behalf of KO
such protests or other documents which KO may deem to be
appropriate to such proceeding.
6.08 Arbitration.
(a) Any dispute, controversy or claim arising out
of, relating to, or in connection with, the provisions of
Sections 6.06(b) or 6.07(d), or the breach, termination or
validity thereof, shall be finally settled by arbitration. The
arbitration shall be conducted in accordance with the
International Arbitration Rules of the American Arbitration
Association in effect at the time of the arbitration, except as
they may be modified herein or by mutual agreement of the
parties. The seat of the arbitration shall be Atlanta, Georgia
in the United States of America, and the arbitration shall be
conducted in the English language.
(b) The arbitration shall be conducted by three
arbitrators. The party (Buyer and/or Enterprises as the case may
be or alternatively KO and/or Sellers) which initiates such
arbitration ("Claimant") shall appoint one arbitrator and the
answering party ("Respondent") shall appoint another arbitrator.
If either side fails to appoint an arbitrator within the
specified time period, then that arbitrator shall be appointed by
the American Arbitration Association. The first two arbitrators
appointed in accordance with this provision shall appoint a third
arbitrator within 30 days after the later of the first two
arbitrators is appointed. When the third arbitrator has accepted
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the appointment, the two arbitrators making the appointment shall
promptly notify the parties of the appointment. If the first two
arbitrators fail to appoint a third arbitrator, or so to notify
the parties within the time period prescribed above, then the
American Arbitration Association shall appoint the third
arbitrator and shall promptly notify the parties of the
appointment. The third arbitrator shall act as Chair of the
Tribunal.
(c) The arbitral award shall be in writing, state
the reasons for the award, and be final and binding on the
parties. The award may include an award of costs, including
reasonable attorneys' fees and disbursements. Judgment upon the
award may be entered by any court having jurisdiction thereof or
having jurisdiction over the parties or their assets.
ARTICLE VII
THE CLOSING
7.01 Time, Date and Place of Closing. The payments and
deliveries contemplated by this Agreement to be made at the
Closing shall be made at the offices of CCBSA, at 10:00 a.m.,
local time in Paris, France, on July 26, 1996, or such other date
and location as may be mutually agreeable. The date on which the
last of such payments and deliveries occurs is hereinafter
referred to as the "Closing Date," and the events comprising such
payments and deliveries are hereinafter collectively referred to
as the "Closing."
7.02 Events Comprising the Closing. The Closing shall
not be deemed to have occurred unless and until the purchase
price set forth in Section 1.02 and all other documents set forth
herein shall have been paid and delivered, and none of these
items shall have been deemed to be paid and delivered unless and
until all of them have been paid and delivered.
7.03 Conditions to Obligations of Buyer. The
obligations of Buyer to make the deliveries and payments under
this Article VII and to close the Transactions are subject to the
fulfillment prior to or at the Closing Date of each of the
following conditions, any one or more of which may be waived by
Enterprises:
(a) The representations and warranties of each of
the Sellers contained in Articles II and III hereof shall be true
in all respects as of the date when made and as of the Closing
Date as if made on such date.
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(b) The Sellers shall have performed and complied
in all material respects with all agreements and conditions
required by this Agreement to be performed or complied with by
them prior to or at the Closing Date.
(c) No European, federal, state or local
governmental unit, agency, body or authority with competent
jurisdiction over the subject matter hereof shall have instituted
any action, suit or proceeding or given notice of its intentions
to do so, which in the reasonable opinion of Enterprises and its
counsel has a material and adverse effect on the transactions
contemplated by this Agreement.
(d) Buyer shall have completed a review in form
and scope satisfactory to Buyer of business, financial and legal
matters with respect to each of the Companies and, on the basis
of such review, nothing shall have come to the attention of the
Buyer that causes the Buyer to conclude, in their sole
discretion, that any of the Companies and the Subsidiaries, taken
as a whole, have suffered any material adverse change in its
business, prospects, financial condition, working capital,
assets, liabilities (absolute, secured, contingent or otherwise),
reserves or operations since the date of the Interim Financial
Statements.
(e) Buyer shall have received (i) commitments
from all issuers of Bottling Authorizations that each such issuer
will consent to the transactions contemplated hereby and will
enter into its respective standard form production, sale and
distribution agreements for such soft drink products with each of
the Companies or Enterprises, and (ii) any other consents
required by the transactions contemplated hereby.
(f) All governmental approvals legally required
for the consummation of the transactions in the form contemplated
hereby and without the imposition of conditions or restrictions
objectionable to Buyer shall have been obtained.
(g) If the French competent authorities pursuant
to Title 5 of the French Ordinance No 86-1246 of December 1st,
1986 (the "French Competition Act") request that Buyer seek to
have the Transactions approved by the French competent
authorities pursuant to Title 5 of the French Competition Act,
the French Minister of Economy (charge du ministre de Economie)
shall have either (i) not responded within the two-month time-
limit provided for in Article 40 of the French Competition Act or
(ii) notified to Buyer its decision neither to refer the
Transactions before the French Competition Council (Conseil de la
concurrence) nor to object to it or (iii) decided not to object
to the Transactions subject to such conditions and/or obligations
that the French Minister of the Economy shall have provided for
in said decision and Buyer shall have informed Sellers in writing
that it considers said conditions and/or obligations acceptable
to it.
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(h) If the Belgian Competition Service requests
that Buyer seek to have the Transactions approved by the
Competition Counsel pursuant to article 10 of the Act of August
5, 1991 ("Belgian Competition Act"), the Competition Counsel
shall have either (i) not responded within the one month time
limit provided for in article 33 Section 2(3) of the Belgian Act
or (ii) notified Buyer of its decision not to object to the
Transactions or (iii) decided not to object to the Transactions
subject to such conditions and/or obligations that the Belgian
Competition Counsel shall have provided for in said decision, and
Buyer shall have informed Sellers in writing that it considers
said conditions and/or obligations acceptable to it.
(i) All agreements, certificates, opinions and
other documents delivered by the Sellers to Buyer hereunder shall
be in form and substance reasonably satisfactory to Buyer.
(j) The Board of Directors of KO and each Seller
shall have authorized the execution and delivery of this
Agreement and the consummation of the Transactions and the Buyer
shall have received certified copies of the resolutions of the
board of directors of KO and each Seller.
(k) CCBSA and CCP shall have a general meeting of
the shareholders of each such Company to be held as soon as
reasonably practical subsequent to the Closing of the
Transactions and one item on the agenda for such general meeting
shall be the appointment of new directors of CCBSA and CCP, as
the case may be.
(l) The board of directors of CCBSA and CCP shall
have approved the Buyer and its designees as the new Shareholders
of each such company and the Buyer shall have received certified
copies of such board resolutions.
(m) All necessary consultation with labor unions
representing the employees of the Company and the Subsidiaries
shall have been completed and the necessary advice from the works
council of the Company and the Subsidiaries shall have been
received. The conditions set forth in Sections 7.03(c), (f), and
(m) are referred to herein as the "Required Statutory Approvals".
(n) All directors of each of the Companies and
their Subsidiaries (other than such directors which Buyer chooses
to retain) shall have delivered to Buyer their resignations as
directors or trustees of employee benefit plans, effective as of
the Closing Date.
(o) The Affiliated Transaction Committee shall
have approved the Transactions and the board of directors of
Enterprises shall have authorized the execution and delivery of
this Agreement and consummation of the Transactions.
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(p) Sellers shall have delivered, at least two
Business Days prior to the Closing Date, the updated Sections of
the Disclosure Schedule required pursuant to Sections 3.01(c),
3.03 and 3.06(b) and such updated Sections shall not contain any
material changes from the Sections of the Disclosure Schedule
previously delivered except such changes resulting from the
Capital Reduction.
(q) Enterprises and KO shall have executed an
agreement regarding the Business Plan for CCBSA, CCP and BSH, the
terms of which shall be satisfactory to the Buyer and Sellers
(the "Business Plan Agreement").
(r) KO shall have entered into new Bottler s
Agreements and toll packing agreements with the Companies and
their respective Subsidiaries, as applicable, effective as of the
Closing Date, containing terms and conditions satisfactory to
Enterprises and KO.
7.04 Conditions to Obligations of the Sellers. The
obligations of the Sellers to make the deliveries under this
Article VII and to close the transactions are subject to the
fulfillment prior to or at the Closing Date of each of the
following conditions, any one or more of which may be waived by
the Sellers:
(a) The representations and warranties of Buyer
in Article IV hereof shall be true in all material respects as of
the date when made and as of the Closing Date as if made on such
date.
(b) Buyer shall have performed and complied with
in all material respects all agreements and conditions required
by this Agreement to be performed or complied with by it prior to
or at the Closing Date.
(c) No European, federal, state or local
governmental unit, agency, body or authority with competent
jurisdiction over the subject matter hereof shall have instituted
any action, suit or proceeding or given notice of its intentions
to do so, which in the reasonable opinion of the Sellers and
their counsel has a material and adverse effect on the
transactions contemplated by this Agreement.
(d) The Required Statutory Approvals shall have
been obtained.
(e) CCBSA shall have reduced its share capital by
approximately FF 1.260 billion, and the funding of not less than
approximately FF 1.024 billion of the share redemption shall have
been financed by CCBSA's borrowing such amount from a
nonaffiliated financial institution. Prior to the Closing Date,
KO shall keep Enterprises informed as to the status of the
redemption of certain shares of CCBSA that has been initiated by
CCBSA.
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(f) All agreements, certificates, opinions and
other documents delivered by Buyer to the Seller or KO hereunder
shall be in form and substance reasonably satisfactory to the
Sellers.
(g) The Board of Directors of KO and each Seller
shall have authorized the execution and delivery of this
Agreement and the consummation of the Transactions and the Seller
shall have obtained certified copies of the resolutions of the
board of directors of KO and each Seller.
(h) The board of directors of CCBSA and CCP shall
have approved the Buyer and its designees as the new Shareholders
of each such company and the Seller shall have obtained certified
copies of such board resolutions.
(i) The Affiliated Transaction Committee shall
have approved the Transactions and the board of directors of
Enterprises and the Buyer shall have authorized the execution and
delivery of this Agreement and consummation of the Transactions
and Enterprises and the Buyer shall have provided certified
copies of such resolutions or other evidence satisfactory to KO
of such authorization.
(j) Enterprises and KO shall have executed the
Business Plan Agreement.
(k) KO shall have entered into new Bottler s
Agreements and toll packing agreements with the Companies and
their respective Subsidiaries, as applicable, effective as of the
Closing Date, containing terms and conditions satisfactory to KO
and Enterprises.
7.05 Deliveries by the Sellers at the Closing.
Delivery by the Sellers of the following at the Closing shall be
a condition to the obligation of Buyer under this Agreement:
(a) A certificate dated the Closing Date executed
by each of the Sellers certifying that (i) the representations
and warranties of such Seller hereunder are true and correct on
the Closing Date as if made on and as of such date or if not, to
what extent they are not, (ii) such Seller has performed and
complied with all agreements, covenants, and conditions required
by this Agreement to be performed or complied with by them prior
to or at the Closing, and (iii) the applicable conditions
precedent to the obligations of such Seller hereunder have been
fulfilled or waived.
(b) Opinion of counsel to the Seller, dated the
Closing Date, in the form of Exhibit B.
(c) The CCBSA Sellers shall have delivered
appropriate ordres de mouvement governing the transfer of the
CCBSA Shares to the Buyer.
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(d) The CCP Seller shall have delivered
appropriate ordres de mouvement governing the transfer of the CCP
Shares to the Buyer.
(e) The BSH Seller shall have delivered the
appropriate instructions and, if need be, powers of attorney to
proceed at Closing with the inscription of the transfer of the
BSH Shares in the Registre des actionnaires of BSH.
(f) Each of the persons identified on Section
7.05(f) of the Disclosure Schedule shall have delivered to the
Buyer ordres de mouvement registration sufficient to transfer
title to the shares held by them in any of the Companies to the
nominees of the Buyer to the respective boards of directors.
(g) The minute books and stock books of each
Company and each Subsidiary.
(h) The resignation, dated as of the Closing
Date, of the directors of each Company and each Subsidiary (other
than such directors Buyer chooses to retain).
7.06 Deliveries by Buyer at the Closing. Delivery by
Buyer of the following at Closing shall be a condition to the
obligation of the Sellers under this Agreement:
(a) Certificates dated the Closing Date executed
by Buyer certifying that (i) the representations and warranties
of each of such Buyer hereunder are true and correct on the
Closing Date as if made on and as of such date or if not, to what
extent they are not, (ii) such Buyer has performed and complied
with all agreements, covenants and conditions required by this
Agreement to be performed or complied with by such Buyer prior to
or at the Closing, and (iii) the applicable conditions precedent
to the obligations of such Buyer hereunder have been fulfilled or
waived.
(b) Certified copies of the resolutions of the
boards of directors of Enterprises and the Buyer and approval of
the Affiliated Transaction Committee authorizing the execution
and delivery of this Agreement and the consummation of the
transactions herein contemplated.
(c) Opinion of counsel to Buyer dated the Closing
Date, in the form of Exhibit C.
(d) Payment of the Purchase Price and repayment
of all intercompany debt owed by the Companies to KO affiliates
as required under Section 1.02.
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ARTICLE VIII
TERMINATION AND ABANDONMENT
8.01 Termination and Abandonment. This Agreement may
be terminated at any time and the transaction abandoned at any
time prior to the Closing without liability of any party to any
other party under the following circumstances:
(a) The mutual written agreement of the Sellers
and Buyer;
(b) By the Sellers if the Closing has not
occurred before September 15, 1996 because all conditions to the
Sellers' obligations have not been satisfied or waived or because
the Buyer has not made all required deliveries, unless the
Closing has not occurred solely because of (i) a Governmental
Objection (as defined in this Section 8.01) or (ii) because all
Required Statutory Approvals as defined in Section 7.03(m) have
not been obtained.
(c) By Buyer if the Closing has not occurred
before September 15, 1996 because all conditions to Buyer'
obligations have not been satisfied or waived or because the
Sellers have not made all required deliveries, unless the Closing
has not occurred solely because of (i) a Governmental Objection
or (ii) because all Required Statutory Approvals as defined in
Section 7.03(m) have not been obtained.
(d) Either party may terminate by written notice
to the other if any action or proceeding shall have been
instituted before any court or other governmental body or, to the
knowledge of the party giving such notice, shall have been
threatened formally in writing by any public authority with
requisite jurisdiction, to restrain or prohibit the transactions
contemplated by this Agreement or to subject one or more of the
parties or their directors or their officers to liability on the
grounds that it or they have breached any law or regulation or
otherwise acted improperly in connection with such transactions
(a "Governmental Objection"), and such action or proceeding shall
not have been dismissed or such written threat shall not have
been withdrawn or rescinded before November 15, 1996.
8.02 Rights and Obligations on Termination. If this
Agreement is terminated and abandoned as provided in this Article
VIII, each party will, at the request of the other, return all
documents, work papers and other material of the requesting
party, including all copies thereof, relating to the transactions
contemplated by this Agreement, whether so obtained before or
after the execution of this Agreement, to the party furnishing
the same, and all information received by any party to this
Agreement with respect to the business of any other party shall
not at any time be used for the advantage of, or disclosed to
third parties by, such party to the detriment of the party
furnishing such information except as may be required by law;
provided, however, that this shall not apply to any document,
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work paper, material, or any other information which is a matter
published in any publication for public distribution or filed as
public information with any governmental authority or is
otherwise in the public domain.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.01 Good Faith; Further Assurances; Further
Cooperation. The parties to this Agreement shall in good faith
undertake to perform their obligations under this Agreement, to
satisfy all conditions and to cause the transactions contemplated
by this Agreement to be carried out promptly in accordance with
the terms of this Agreement. Upon the execution of this
Agreement and thereafter, the parties hereto shall do such things
as may be reasonably requested by the other parties hereto in
order more effectively to consummate or document the transactions
contemplated by this Agreement.
9.02 Notices. All notices, communications and
deliveries under this Agreement shall be made in writing, signed
by the party making the same, shall specify the Section of this
Agreement pursuant to which it is given, and shall be deemed
given on the date delivered if delivered in person, (or by
recognized overnight courier) or three Business Days after being
mailed (with postage prepaid) if mailed certified mail, return
receipt requested. Such notice shall not be effective unless
copies are provided contemporaneously to the persons indicated
below, but neither the manner nor the time of giving notice to
those to whom copies are to be given shall control the date
notice is given or received. The addresses and requirements for
copies are as follows:
To Enterprises or Buyer:
Mr. John R. Alm
Senior Vice President
and Chief Financial Officer
Coca-Cola Enterprises Inc.
2500 Windy Ridge Parkway
Atlanta, Georgia 30339
if by mail, to:
Post Office Box 723040
Atlanta, Georgia 31139-0040
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with a copy to:
E. Liston Bishop III, Esq.
Miller & Martin
1000 Volunteer Building
832 Georgia Avenue
Chattanooga, Tennessee 37402-2289
* * * * * * *
To KO or Sellers:
The Coca-Cola Company
One Coca-Cola Plaza
Atlanta, Georgia 30313
Attention: Chief Financial Officer
with a copy to:
The Coca-Cola Company
One Coca-Cola Plaza, N.W.
Atlanta, Georgia 30313
Attention: General Counsel
if by mail to:
P.O. Drawer 1734
Atlanta, Georgia 30301
or to such representative or to such other address as the parties
hereto may furnish to the other parties in writing. If notice is
given pursuant to this Section 9.02 of a permitted successor or
assign of a party to this Agreement, then notice shall be given
as set forth above to such successor or assign of such party.
9.03 Definition of Knowledge. As used in this
Agreement, the term "to the knowledge of the Company" or any
variations thereof shall mean the state of facts, conditions or
circumstances which is known or reasonably should have been known
to the individuals listed on Section 9.03 of the Disclosure
Schedule. Section 6.05(c) shall govern the definition of
"knowledge of the Buyer."
9.04 Assignment. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto, and their
respective legal representatives, heirs, successors and assigns.
No assignment or transfer of rights and obligations hereunder
shall be made except with the prior written consent of the
parties hereto, except that neither the Buyer or the Sellers need
obtain the other's consent to the assignment of rights and
delegation of obligations under this Agreement to an affiliated
corporation of Enterprises (with respect to assignments by the
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Buyer) or to KO (with respect to assignments by the Sellers)
(which, for purposes of this Agreement, shall be limited to any
of Enterprises' or KO's direct wholly owned subsidiaries)
provided that Enterprises or KO as the case may be shall remain
liable for the performance of all the assigned, transferred or
assumed obligations under this Agreement which obligation shall
be a primary obligation for full and prompt performance.
9.05 Guaranty of Enterprises. Enterprises, as a
primary obligor, shall and by this does, absolutely and
unconditionally and irrevocably guarantee the prompt payment and
performance of the obligations of Buyer under this Agreement (the
"Buyer's Obligations"), provided that a Buyer receives notice of
and shall have failed to perform any Buyer's Obligations with 30
days of notice of such failure to pay or perform. No change,
amendment or modification of this Agreement or waiver of any of
the terms hereof shall diminish, release or discharge the
liability of Enterprises under this Section 9.05. The liability
of Enterprises under this Section 9.05 is continuing and shall
only be discharged by the full performance of the Buyer's
Obligations. The guaranty set forth in this Section 9.05 shall
continue in full force and effect and shall remain binding on
Enterprises notwithstanding any assignment by either Enterprises
or Buyer of its rights hereunder pursuant to Section 9.04.
9.06 Guaranty of KO. KO, as a primary obligor, shall
and by this does, absolutely and unconditionally and irrevocably
guarantee the prompt payment and performance of the obligations
of Sellers under this Agreement (the "Sellers' Obligations"),
provided that a Seller receives notice of and shall have failed
to perform any Sellers' Obligations with 30 days of notice of
such failure to pay or perform. No change, amendment or
modification of this Agreement or waiver of any of the terms
hereof shall diminish, release or discharge the liability of KO
under this Section 9.06. The liability of KO under this Section
9.06 is continuing and shall only be discharged by the full
performance of the Sellers' Obligations. The guaranty set forth
in this Section 9.06 shall continue in full force and effect and
shall remain binding on KO notwithstanding any assignment by
Sellers of their rights hereunder pursuant to Section 9.04.
9.07 Captions; Definitions. The titles or captions of
articles, sections and subsections contained in this Agreement
are inserted only as a matter of convenience and for reference
and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provision hereof and shall not be
considered in the interpretation or construction of this
Agreement in any proceeding. The parties agree to all
definitions in the statement of parties to this Agreement and in
the other introductory language to this Agreement.
58
<PAGE>
9.08 Controlling Law; Amendment; Jurisdiction; Waiver;
Remedies Cumulative. This Agreement is executed by Buyer in, and
shall be construed in accordance with and governed by the laws
of, the State of Georgia, without giving effect to the principles
of conflicts of law thereof. The transfer registration of the
CCBSA Shares and the CCP Shares on the respective corporate
ledgers of CCBSA and CCP shall be covered by the laws of France
and the transfer of BSH Shares shall be governed by the laws of
Belgium. No provision of this Agreement or any related document
shall be construed against or interpreted to the disadvantage of
any party hereto by any court or other governmental or judicial
authority by reason of such party's having or being deemed to
have structured or drafted such provision. This Agreement may
not be altered or amended except in writing signed by Buyer,
Enterprises, Sellers and KO. The failure of any party hereto at
any time to require performance of any provisions hereof shall in
no manner affect the right to enforce the same. No waiver by any
party hereto of any condition, or of the breach of any term,
provision, warranty, representation, agreement or covenant
contained in this Agreement, whether by conduct or otherwise, in
any one or more instances shall be deemed or construed as a
further or continuing waiver of any such condition or breach or a
waiver of any other condition or of the breach of any other term,
provision, warranty, representation, agreement or covenant herein
contained.
9.09 No Third-Party Beneficiaries. With the exception
of the parties to this Agreement and each of their legal
representatives, heirs, successors and permitted assigns, there
shall exist no right of any person to claim a beneficial interest
in this Agreement or any rights arising by virtue of this
Agreement.
9.10 Exhibits; Disclosure Schedule. All exhibits and
the Disclosure Schedule to this Agreement are hereby incorporated
into this Agreement and hereby are made a part of this Agreement
as if set out in full in the first place that reference is made
thereto.
9.11 Counterparts; Entire Agreement. This Agreement
may be executed by each party upon a separate copy, and in such
case one counterpart of this Agreement shall consist of enough of
such copies to reflect the signatures of all of the parties to
this Agreement. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement or the
terms of this Agreement to produce or account for more than one
of such counterparts. This Agreement together with all schedules
and exhibits hereto and all other agreements and undertakings
provided for hereunder or delivered in connection herewith shall
constitute the entire agreement of the parties and supersedes any
and all prior agreements, oral or written, with respect to the
59
<PAGE>
subject matter contained herein. There are no other agreements,
representations, warranties or other understandings between the
parties in connection with this Transaction which are not
referenced in this Agreement or to be delivered in connection
herewith or the schedules and exhibits hereto. Except as
otherwise provided herein, this Agreement shall not alter, amend
or supersede any other agreement between KO and Enterprises or
any of their direct or indirect subsidiaries.
9.12 Injunctive Relief. It is understood and agreed
that the parties hereto will be irreparably injured by a breach
of this Agreement and that money damages would not be a
sufficient remedy for breaches; provided however that the
remedies provided in Article VI shall be the exclusive remedies
in respect of representations and warranties under Articles III
and IV in the absence of fraud and excepting Losses resulting
from Claims pursuant to Section 3.22(a) where it is determined
that the breach was the result of fraud of a Seller; therefore,
in addition to any other remedies that may be available to such
party at law or under this Agreement, (but subject to the
immediately preceding proviso) any party claiming a breach of
this Agreement by another shall be entitled to equitable relief,
including injunctive relief and specific performance, as a remedy
for any such breach (which shall not be the exclusive remedy for
any such breach).
60
<PAGE>
DULY EXECUTED by the parties hereto, under seal, as of
the date first above written.
CCBSA SELLERS:
The Coca-Cola Export
Corporation
ANTONY C. PULLEN
By:______________________
DULY AUTHORIZED REPRESENTATIVE
Its:_____________________
Varoise de Concentres S.A.
ANTONY C. PULLEN
By:______________________
DULY AUTHORIZED REPRESENTATIVE
Its:_____________________
CCP SELLER:
Barlan Inc.
ANTONY C. PULLEN
By:______________________
DULY AUTHORIZED REPRESENTATIVE
Its:_____________________
BSH SELLER:
Beverage Products Limited
TIMOTHY DOYLE
By:______________________
DULY AUTHORIZED REPRESENTATIVE
Its:_____________________
BUYER:
Bottling Holdings
(International) Inc.
JOHN R. ALM
By:______________________
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
Its:_____________________
<PAGE>
KO:
The Coca-Cola Company
TIMOTHY DOYLE
By:______________________
DULY AUTHORIZED REPRESENTATIVE
Its:_____________________
ENTERPRISES:
Coca-Cola Enterprises Inc.
JOHN R. ALM
By:______________________
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
Its:_____________________
<PAGE>
INDEX OF DEFINED TERMS
Page
Defined Term Number
------------- ------
1996 Budget 10
Affected Seller 39
Antitrust Laws 27
Applicable Law 6
Belgian Competition Act 51
Bottling Authorizations 8
BSH 1
BSH Protected Parties 39
BSH Seller 1
BSH Shares 2
BSH Tax Contingencies 17
Business Day 11
Business Plan Agreement 52
Buyer 1
Buyers' Documents 31
Buyers' Obligations 58
Buyers' Protected Parties 39
Capital Leases 9
Capital Reduction 6
CCBSA 1
CCBSA Protected Parties 39
CCBSA Sellers 1
CCBSA Shares 2
<PAGE>
CCP 1
CCP Protected Parties 39
CCP Seller 1
CCP Shares 2
Claim 39
Claimant 39
Claims 39
Closing 49
Closing Date 49
collective redundancy 22
Combined Financial Statements 9
Company Parties 27
Composite Rate 39
Deductible 44
Deemed Short Period 37
Distri-One Litigation 13
Employee Benefit Plan 20
Enterprises 1
Environmental Laws 24
Environmental Responsibility Allocations 40
Excluded Items 19
Finally Resolved 39
Financial Statement 9
French Competition Act 50
Gibb Report 18
Governmental Authority 6
ii
<PAGE>
Governmental Objection 55
Indebtedness For Borrowed Money 9
Intellectual Property Rights 27
Interim Financial Statements 10
knowledge of the Buyers 45
KO 1
Leased Personal Property 19
Loss 39
Losses 39
Material Agreement 28
Offsite Property 23
Onsite Property 23
Permitted Lien 18
Personal Property 18
Required Statutory Approvals 51
Rolling Estimate 10
Seller 1
Sellers 1
Sellers' Obligations 58
Seller's Documents 3
Shareholders' Documents 3
Shares 3
Subsidiaries 7
Subsidiary 7
Taxes 14
Third-Party Loans 26
iii
<PAGE>
To the knowledge of the Company 57
Transactions 3
US GAAP 9
iv
<PAGE>
INDEX OF EXHIBITS
Exhibit Page
Description of Exhibit Designation Number
---------------------- ----------- ------
Purchase Price A 2
Opinion of counsel to Sellers B 53
Opinion of counsel to Buyer C 54
v
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
PURCHASE PRICE AND LOCAL CURRENCY PROCEEDS
<S> <C> <C> <C> <C> <C> <C>
----------------------- --------------------------------------
| FOR INFORMATION ONLY | Minority Shareholders FRF
|----------------------| --------------------- --------------
| (1) | CCBSA Gross Proceeds 2,340,000,000
Allocated Purchase Price: Amount in Amount in | Conv. Approximate| Plus: Excess Cash 239,200,000
FRF BEF | Rates US$ Cost | Less: Debt (7,314,735)
-------------- ------------- | ------ ----------- | Total Proceeds --------------
Coca-Cola Beverages S.A. | | 2,571,885,265
(CCBSA) 2,340,000,000 - | 5.20 450,000,000 |
| |
Coca-Cola Production S.A. (CCP) 535,600,000 - | 5.20 103,000,000 | Total Proceeds Per Share 83.36
| | (Before reduction of shares
S. A. Beverage Sales Holding N.V. | | of TCCEC)
(BSH) - 11,421,100,000 | 31.55 362,000,000 |
------------- -------------- | ----------- | Minority Shares O/S 3.260
Total Purchase Price 2,875,600,000 11,421,100,000 | 915,000,000 |
| | Total Minority Shareholders 271,750
| |---------------------------------------
| |
Less: Assumed Long-Term Debt (2): | |
| |
Straight Bank Loans (CCBSA) (3,994,335) | 5.20 (768,141)|--------------------------------------
Fraikin Lease (CCBSA) (3,320,400) | 5.20 (638,538)| Due to Affiliates (BSH) BEF
Due to TCCC Affiliates (BSH) - (8,349,441,715)| 31.55 (264,641,576)| -------------
Straight Bank Loans (BSH) - (500,000,000)| 31.55 (15,847,861)| Coca-Cola Export Corp. 1,669,021,364
Belgo Leasing (BSH) - (306,865,094)| 31.55 (9,726,310)| Coca-Cola Export Corp. 3,792,630,425
Van Milders (BSH) - (207,500,000)| 31.55 (6,576,862)| Beverages Products Ltd. 327,789,926
---------- ------------- | ------------ | Coca-Cola Services 2,560,000,000
TOTAL (7,314,735) (9,363,806,809)| (298,199,289)| -------------
| | Total Due to Affiliates 8,349,441,715
Plus: Excess Cash (3) 239,200,000 - | 5.20 46,000,000 |--------------------------------------
| |
Less: Capital Reduction (3) (1,260,000,018) - | 5.20 (242,307,696)|
| |
Less: Minority Shareowners (271,750) - | 5.20 (52,260)|
(See calculation) | |
Plus: Intercompany Debt (2) - 8,349,441,715 | 31.55 (264,641,576)|
------------- -------------- | ------------ |
CASH PAID AT CLOSING 1,847,213,497 10,406,734,906 | $685,082,332 |
============= ============== | ============ |
|------------------------
(1) As agreed to by The Coca-Cola Company and Coca-Cola Enterprises on
May 23, 1996
(2) As shown above long-term debt consists of amounts due to TCCC affiliates
(intercompany debt), obligations with banks, capital leases and
obligations to prior owners. Except for debt referenced in Section 7.04(e)
these balances reflect the presumed outstanding obligations of the
entities at the closing date. Final actual long-term debt balances
will be calculated as of closing and confirmed by TCCC and CCE Treasury,
and amounts paid at closing will be adjusted by the amount that long-term
debt as set forth above exceeds or is less than the amounts set forth
above except for debt referenced in Section 7.04(e); provided, however,
that the parties have agreed that the straight bank loans of BSH shall
be deemed to be correct and fixed at 500,000,000 BEF in the absence of new
credit facilities or borrowings other than for (i) daily borrowings
related to working capital requirements in ordinary course of business
and consistent with past practices of BSH and subsidiaries, (ii) payment
of interest accrued through the closing on amounts due to TCCC affiliates,
and (iii) payment of principal amounts due to TCCC at closing in order to
replace current intercompany debt, in the same amounts, with bank debt.
(3) The payment of excess cash and the capital reduction was transacted on
July 18, 1996.
<PAGE>
Exhibit B
July 30, 1996
Coca-Cola Enterprises Inc.
2500 Windy Ridge Parkway
Atlanta, GA 30339
RE: Sale of:
Coca-Cola Beverages S.A. ("CCBSA")
Coca-Cola Production S.A. ("CCP")
S.A. Beverage Sales Holding N.V. ("BSH")
Gentlemen:
I am senior finance counsel (European Group) of The Coca-Cola
Company, a Delaware corporation ("KO"), and have acted as counsel for
(i) KO in connection with the execution and delivery of the Purchase
Agreement (as defined herein), (ii) The Coca-Cola Export Corporation,
a Delaware corporation and wholly-owned subsidiary of KO ("TCCEC"), in
connection with the sale by TCCEC and Varoise de Concentres S.A. of
all of the stock of CCBSA held by them; (iii) Barlan Inc., a Delaware
corporation and a wholly-owned subsidiary of KO (the "CCP Seller"), in
connection with the sale by it of all of the capital stock of CCP held
by it and (iv) Beverage Products Limited, a Delaware corporation and a
wholly-owned subsidiary of KO (the "BSH Seller"), in connection with
the sale by it of all of the capital stock of BSH held by it, in each
case pursuant to the Stock Purchase Agreement dated July 26, 1996 by
and among CCEC and Varoise de Concentres, the CCP Seller, the BSH
Seller, Bottling Holdings (International) Inc., KO, and Coca-Cola
Enterprises Inc. (the "Purchase Agreement"). I am rendering this
opinion pursuant to Section 7.05(b) of the Purchase Agreement.
Capitalized terms used in this opinion have the meanings assigned to
them in the Purchase Agreement unless otherwise defined herein.
In preparing this opinion, I have investigated such matters of
fact and matters of law and reviewed the originals or documents
submitted as copies of (i) the Purchase Agreement, (ii) the
agreements, certificates and other instruments to be delivered by KO,
CCEC, the CCP Seller and the BSH Seller (individually, a "Seller" and
collectively, the "Sellers") pursuant to the Purchase Agreement
(collectively, the "Sellers' Documents") and (iii) such other
opinions, documents, records, agreements and certificates as I have
considered necessary in each case in order to render the opinion set
forth below.
With your consent and without further investigation, I have
relied upon the accuracy and authenticity of originals, conformed or
copied versions of such records, agreements, certificates and other
documents and, in the course of my examination of all such documents,
I have assumed (i) that all natural persons whose signatures appear on
such documents, or on whose behalf such documents were executed, were
and remain legally competent and have the legal capacity necessary to
become legally bound thereby, (ii) that all copies of documents
submitted to me conform to the originals thereof, (iii) that all
certificates of public officials have been properly given and are
accurate and complete, (iv) that each signature appearing on the
original copy of such documents is genuine, and that each of the above
documents has been duly and validly authorized, executed and delivered
by or on behalf of all parties thereto (other than KO and the Sellers)
as of the time of the rendering of the opinions expressed herein, (v)
that each party to the Purchase Agreement and the other Sellers
Documents (other than KO and the Sellers) has satisfied those legal
requirements applicable to it to the extent necessary to make the
Purchase Agreement and the other Sellers' Documents enforceable
against it and to allow it to enforce the same, (vi) that there has
been no mutual mistake of fact, misunderstanding, fraud, duress, or
undue influence in connection with the Purchase Agreement or any of
the other Sellers' Documents, (vii) that the conduct of the parties to
the Purchase Agreement and the other Sellers' Documents has complied
with any requirement of good faith, fair dealing and conscionability,
and (viii) that there are no agreements or understandings or any usage
of trade or course of prior dealings among the parties that would, in
either case, define, supplement or qualify the terms of the Purchase
Agreement or the Sellers' Documents. Whenever used in an opinion or
statement herein, the phrase "insofar as known to me", "to my
knowledge" and other words or phrases of like or similar meaning
qualify and limit such opinion or statement to my awareness at the
time of delivery of this opinion, without investigation, of facts,
matters, or other information effecting such opinion or statement.
I am admitted to the Bars of the States of Georgia and _________,
and the opinions given herein are limited to the laws of the State of
Georgia, the general corporation law of the State of Delaware and the
federal laws of the United States. No opinion is expressed with
respect to the laws of France or Belgium, or of any other jurisdiction
or state or with respect to the effect of any such laws on the matters
deal with herein. On the basis of the foregoing, I am of the opinion
that:
1. KO is a corporation validly existing and in good standing
under the laws of the State of Delaware.
2. CCEC is a corporation validly existing and in good standing
under the laws of the State of Delaware.
3. The CCP Seller is a corporation validly existing and in good
standing under the laws of the State of Delaware.
4. The BSH Seller is a corporation validly existing and in good
standing under the laws of the State of Delaware.
5. With respect to the Purchase Agreement and the other
agreements, instruments and documents executed and delivered by each
of KO and the Sellers pursuant to the Purchase Agreement (collectively
the "Sellers' Delivered Documents ):
(a) KO and each Seller has the corporate power and
authority to execute and deliver the Seller Delivered Documents and to
consummate the transaction contemplated by the Seller Delivered
Documents and perform thereunder;
(b) The execution and delivery by KO and each Seller of the
Seller Delivered Documents and the consummation by KO and each Seller
of the transaction contemplated by, and its other compliance with or
performance under, the Seller Delivered Documents have been duly
authorized by all necessary corporate action on the part of KO and
each Seller in compliance with its certificate of incorporation,
bylaws and any applicable constitution, statute, law, ordinance,
regulation or judicial decision; and
(c) The Seller Delivered Documents have been executed and
delivered by KO and each Seller, and constitute the valid and binding
agreements of KO and each Seller enforceable against KO and each
Seller in accordance with their respective terms, except to the extent
that enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting the
enforcement of creditors rights generally, and by general principles
of equity, regardless of whether such enforceability is considered in
a proceeding in law or in equity.
6. With respect to the following:
(a) The certificate of incorporation (as amended) and
bylaws of KO and each Seller;
(b) Any applicable law, rule or regulation;
(c) To my knowledge, any material contract to which any
Seller is a party or by which it may be bound; or
(d) To my knowledge, any judgment, order, injunction,
decree or ruling of any governmental authority to which KO or any
Seller is a party or is subject,
the execution and delivery by KO or such Seller of each of the Seller
Delivered Documents and the consummation of the transactions
contemplated thereby will not: (i) (except with respect to
indebtedness of CCBSA, CCP and BSH and subsidiaries which is the
subject of representations and warranties set forth in the purchase
agreement and with respect to which no opinion is given) result in any
violation, conflict, breach or material default (or event which with
giving of notice of passage of time, or both, would constitute a
material default), give to others any interest or rights, including
rights of termination, cancellation or acceleration, require the
consent of any other party, or result in the creation or imposition of
any security interest upon any of the properties or assets of KO or
such Seller which would have a material adverse effect on KO or such
Seller, or (ii) require any authorization, consent, approval,
exemption or other action by any governmental authority which has not
been obtained or any notice to or filing with any governmental
authority which has not been given or made.
7. To my knowledge, no action or proceeding against any Seller
has been instituted or threatened before any governmental authority to
restrain or prohibit any of the transactions contemplated by the
Purchase Agreement.
This opinion is delivered in connection with the performance by
KO and the Sellers of their obligations under the Purchase Agreement,
may be relied upon only by you in connection therewith, and may not be
relied upon by you for any other person or by anyone else for any
purpose.
Very truly yours,
PEGGY ANN WEST
<PAGE>
Exhibit C
July 30, 1996
The Coca-Cola Company
One Coca-Cola Plaza
Atlanta, GA 30313
RE: Purchase of:
Coca-Cola Beverages S.A. ("CCBSA")
Coca-Cola Production S.A. ("CCP")
S.A. Beverage Sales Holding N.V. ("BSH")
Gentlemen:
I am general counsel to Coca-Cola Enterprises Inc., a
Delaware corporation ("Enterprises"), and have acted as counsel
for (i) Enterprises in connection with the execution and delivery
of the Purchase Agreement (as defined herein) and (ii) Bottling
Holdings (International) Inc., a Delaware corporation and wholly-
owned subsidiary of Enterprises ("Buyer"), in connection with the
purchase by it of all but 3,269 shares of the capital stock of
CCBSA (b) all but 6 shares of the capital stock of CCP and (c)
all but 11 shares of the capital stock of BSH, in each case
pursuant to the Stock Purchase Agreement dated July 26, 1996 by
and among The Coca-Cola Export Company, Varoise de Concentres,
Barlan, Inc., Beverage Products Limited, Buyer, The Coca-Cola
Company and Enterprises (the "Purchase Agreement"). I am
rendering this opinion pursuant to Section 7.06(c) of the
Purchase Agreement. Capitalized terms used in this opinion have
the meanings assigned to them in the Purchase Agreement unless
otherwise defined herein.
In preparing this opinion, I have investigated such matters
of fact and matters of law and reviewed the originals or
documents submitted as copies of (i) the Purchase Agreement, (ii)
the agreements, certificates and other instruments to be
delivered by Enterprises and Buyer pursuant to the Purchase
Agreement (collectively, the "Buyer's Documents") and (iii) such
other opinions, documents, records, agreements and certificates
as I have considered necessary in each case in order to render
the opinion set forth below.
With your consent and without further investigation, I have
relied upon the accuracy and authenticity of originals, conformed
or copied versions of such records, agreements, certificates and
other documents and, in the course of my examination of all such
documents, I have assumed (i) that all natural persons whose
signatures appear on such documents, or on whose behalf such
documents were executed, were and remain legally competent and
have the legal capacity necessary to become legally bound
thereby, (ii) that all copies of documents submitted to me
conform to the originals thereof, (iii) that all certificates of
public officials have been properly given and are accurate and
complete, (iv) that each signature appearing on the original copy
of such documents is genuine, and that each of the above
documents has been duly and validly authorized, executed and
delivered by or on behalf of all parties thereto (other than
Enterprises and Buyer) as of the time of the rendering of the
opinions expressed herein, (v) that each party to the Purchase
Agreement and the other Buyer's Documents (other than Enterprises
and Buyer) has satisfied those legal requirements applicable to
it to the extent necessary to make the Purchase Agreement and the
other Buyer's Documents enforceable against it and to allow it to
enforce the same, (vi) that there has been no mutual mistake of
fact, misunderstanding, fraud, duress, or undue influence in
connection with the Purchase Agreement or any of the other
Buyer's Documents, (vii) that the conduct of the parties to the
Purchase Agreement and the other Buyer's Documents has complied
with any requirement of good faith, fair dealing and
conscionability, and (viii) that there are no agreements or
understandings or any usage of trade or course of prior dealings
among the parties that would, in either case, define, supplement
or qualify the terms of the Purchase Agreement or the Buyer's
Documents. Whenever used in an opinion or statement herein, the
phrase "insofar as known to me", "to my knowledge" and other
words or phrases of like or similar meaning qualify and limit
such opinion or statement to my awareness at the time of delivery
of this opinion, without investigation, of facts, matters, or
other information effecting such opinion or statement.
The opinions given herein are limited to the laws of the
State of Georgia, the general corporation law of the State of
Delaware and the federal laws of the United States. No opinion
is expressed with respect to the laws of France or Belgium, or of
any other jurisdiction or state or with respect to the effect of
any such laws on the matters deal with herein. On the basis of
the foregoing, I am of the opinion that:
1. Enterprises is a corporation validly existing and in
good standing under the laws of the State of Delaware.
2. Buyer is a corporation validly existing and in good
standing under the laws of the State of Delaware.
3. With respect to the Purchase Agreement and the other
agreements, instruments and documents executed and delivered by
each of Enterprises and Buyer pursuant to the Purchase Agreement
(collectively the "Buyer's Delivered Documents"):
(a) Each of Enterprises and Buyer has the corporate
power and authority to execute and deliver the Buyer's Delivered
Documents and to consummate the transaction contemplated by the
Buyer's Delivered Documents and perform thereunder;
(b) The execution and delivery by each of Enterprises
and Buyer of the Buyer's Delivered Documents and the consummation
by each of Enterprises and Buyer of the transaction contemplated
by, and its other compliance with or performance under, the
Buyer's Delivered Documents have been duly authorized by all
necessary corporate action on the part of each of Enterprises and
Buyer in compliance with its certificate of incorporation, bylaws
and any applicable constitution, statute, law, ordinance,
regulation or judicial decision; and
(c) The Buyer's Delivered Documents have been executed
and delivered by each of Enterprises and Buyer, and constitute
the valid and binding agreements of each of Enterprises and Buyer
enforceable against each of Enterprises and Buyer in accordance
with their respective terms, except to the extent that
enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
the enforcement of creditors rights generally, and by general
principles of equity, regardless of whether such enforceability
is considered in a proceeding in law or in equity.
4. With respect to the following:
(a) The certificate of incorporation (as amended) and
bylaws of each of Enterprises and Buyer;
(b) Any applicable law, rule or regulation;
(c) To my knowledge, any material contract to which
Enterprises or Buyer is a party or by which it may be bound; or
(d) To my knowledge, any judgment, order, injunction,
decree or ruling of any governmental authority to which
Enterprises or Buyer is a party or is subject,
the execution and delivery by Enterprises and Buyer of each of
the Buyer's Delivered Documents and the consummation of the
transactions contemplated thereby will not: (i) result in any
violation, conflict, breach or material default (or event which
with giving of notice of passage of time, or both, would
constitute a material default), give to others any interest or
rights, including rights of termination, cancellation or
acceleration, require the consent of any other party, or (ii)
require any authorization, consent, approval, exemption or other
action by any governmental authority which has not been obtained
or any notice to or filing with any governmental authority which
has not been given or made.
5. To my knowledge, no action or proceeding against
Enterprises or Buyer has been instituted or threatened before any
governmental authority to restrain or prohibit any of the
transactions contemplated by the Purchase Agreement.
This opinion is delivered in connection with the performance
by Enterprises and Buyer of their obligations under the Purchase
Agreement, may be relied upon only by you in connection
therewith, and may not be relied upon by you for any other person
or by anyone else for any purpose.
Very truly yours,
LOWRY F. KLINE
<PAGE>
</TABLE>
COCA-COLA ENTERPRISES INC. EXHIBIT 28
- -------------------------------------------------------------------------------
CONTACT: Laura Asman - Media Relations
(770) 989-3023
Margaret Carton - Investor Relations
(770) 989-3622
FOR IMMEDIATE RELEASE
COCA-COLA ENTERPRISES INC. COMPLETES THE PREVIOUSLY ANNOUNCED ACQUISITION OF
BOTTLING OPERATIONS IN FRANCE AND BELGIUM
ATLANTA, July 26, 1996 -- Coca-Cola Enterprises today announced that
the Company has completed the previously announced acquisition of The Coca-Cola
Company's bottling and canning operations in France and Belgium. The bottling
operations in France and Belgium were acquired for a total transaction value of
$915 million and include Coca-Cola Beverages S. A. (French bottler) and
Coca-Cola Production S. A. (Dunkirk production facility) in France, and
S. A. Beverages Sales Holding N. V. in Belgium. In 1995, the French and
Belgian operations distributed 252 million unit cases and generated proforma
net operating revenues of approximately $1.2 billion. As previously announced,
the acquisition is immediately additive to cashflow and is not expected to
materially affect earnings per share in 1996.
"We are pleased to have the first step in our planned international
expansion completed," commented Summerfield K. Johnston, Jr., vice chairman and
chief executive officer of Coca-Cola Enterprises. "The French and Belgian
acquisition represents an important element in our strategy to enhance
share-owner value through profitable international growth."
Coca-Cola Enterprises Inc. (NYSE: CCE) is the world's largest bottler of
liquid nonalcoholic refreshment, distributing approximately 57 percent of
The Coca-Cola Company's United States bottle and can volume. Coca-Cola
Enterprises is also the sole licensed bottler for products of The Coca-Cola
Company in the Netherlands. Coca-Cola Enterprises currently has pending
transactions to acquire NORA BEVERAGES INC. and bottling operations in the
United States and Great Britain.
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