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______________________________________________________
AMENDED AND RESTATED PURCHASE AGREEMENT
among
THE COCA-COLA COMPANY,
ATLANTIC INDUSTRIES
and
CADBURY SCHWEPPES PLC
______________________________________________________
___________________________
Dated as of December 11, 1998
___________________________
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 PURCHASE AND SALE . . . . . . . . . . . . . . . . . . 1
1.01 Purchase and Sale . . . . . . . . . . . . . . . . . . 1
1.02 Purchase Price . . . . . . . . . . . . . . . . . . . 6
1.03 Payments at Closings . . . . . . . . . . . . . . . . 8
1.04 Closing Date Financial Statements and
Certificate of Adjustments . . . . . . . . . . . . . 8
1.05 Post-Closing Adjustments . . . . . . . . . . . . . 10
1.06 Assumed Liabilities; Excluded Liabilities . . . . . 10
1.07 Method of Payment. . . . . . . . . . . . . . . . . . 11
1.08 Conveyance Documents . . . . . . . . . . . . . . . . 11
ARTICLE 2 CS REPRESENTATIONS AND WARRANTIES. . . . . . . . . . 11
2.01 Organization, Etc. . . . . . . . . . . . . . . . . . 12
2.02 Authorization; Enforceability. . . . . . . . . . . . 12
2.03 No Conflict. . . . . . . . . . . . . . . . . . . . . 13
2.04 Ownership of the Shares. . . . . . . . . . . . . . . 14
2.05 Authorized and Outstanding Stock . . . . . . . . . . 14
2.06 Transfer Claims. . . . . . . . . . . . . . . . . . . 15
2.07 Financial Statements . . . . . . . . . . . . . . . . 15
2.08 No Undisclosed Liabilities . . . . . . . . . . . . . 17
2.09 No Violation of Law; Licenses and Permits. . . . . . 17
2.10 Property . . . . . . . . . . . . . . . . . . . . . . 18
2.11 Leases . . . . . . . . . . . . . . . . . . . . . . . 19
2.12 Indebtedness for Borrowed Money. . . . . . . . . . . 19
2.13 Intellectual Property. . . . . . . . . . . . . . . . 19
2.14 Litigation and Claims. . . . . . . . . . . . . . . . 21
2.15 Employee Contracts, Union Agreements
and Benefit Plans . . . . . . . . . . . . . . . . . 22
2.16 Labor Relations . . . . . . . . . . . . . . . . . . 22
2.17 Environmental Protection . . . . . . . . . . . . . . 23
2.18 Insurance Policies . . . . . . . . . . . . . . . . . 24
2.19 Major Suppliers and Customers. . . . . . . . . . . . 24
2.20 Contracts and Commitments. . . . . . . . . . . . . . 24
2.21 Agreements in Full Force and Effect. . . . . . . . . 26
2.22 Absence of Certain Changes and Events. . . . . . . . 26
2.23 Tax Matters. . . . . . . . . . . . . . . . . . . . . 28
2.24 Accounts Receivable. . . . . . . . . . . . . . . . . 29
2.25 Product and Service Warranties . . . . . . . . . . . 29
2.26 Brokers' and Finders' Fees . . . . . . . . . . . . . 29
2.27 Transactions With Affiliates . . . . . . . . . . . . 29
2.28 Year 2000. . . . . . . . . . . . . . . . . . . . . . 30
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2.29 E.U. and U.S. Presence . . . . . . . . . . . . . . . 31
ARTICLE 3 KO REPRESENTATIONS AND WARRANTIES. . . . . . . . . . 31
3.01 Corporate Organization . . . . . . . . . . . . . . . 31
3.02 Authorization, Etc . . . . . . . . . . . . . . . . . 31
3.03 No Conflict. . . . . . . . . . . . . . . . . . . . . 32
3.04 Brokers and Finders. . . . . . . . . . . . . . . . . 32
3.05 Litigation . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 4 COVENANTS OF THE CS PARTIES. . . . . . . . . . . . . 32
4.01 Pre-Closing Operations . . . . . . . . . . . . . . . 32
4.02 Access . . . . . . . . . . . . . . . . . . . . . . . 34
4.03 Financial Statements . . . . . . . . . . . . . . . . 34
4.04 Acquisition Proposals. . . . . . . . . . . . . . . . 34
4.05 Transfer Taxes . . . . . . . . . . . . . . . . . . . 35
4.06 Consultation . . . . . . . . . . . . . . . . . . . . 35
4.07 Transition Support . . . . . . . . . . . . . . . . . 36
4.08 Releases . . . . . . . . . . . . . . . . . . . . . . 36
4.09 Delivery of Updated Schedules and Other Documents. . 36
4.11 Accounts Receivable. . . . . . . . . . . . . . . . . 37
4.12 Collective Bargaining Agreements . . . . . . . . . . 37
4.13 Insurance Policies . . . . . . . . . . . . . . . . . 37
4.14 Transfer of DPBL Shares. . . . . . . . . . . . . . . 38
ARTICLE 5 COVENANTS OF THE PARTIES . . . . . . . . . . . . . . 38
5.01 Approvals of Third Parties; Satisfaction of
Conditions to Closing . . . . . . . . . . . . . . . 38
5.02 Confidentiality. . . . . . . . . . . . . . . . . . . 38
5.03 Trade Secrets, Confidential Information and
Noncompetition Covenants . . . . . . . . . . . . . . 40
5.04 Tax Matters. . . . . . . . . . . . . . . . . . . . . 43
5.05 Other Matters. . . . . . . . . . . . . . . . . . . . 45
5.06 Employee Matters . . . . . . . . . . . . . . . . . . 46
5.07 Bottling Rights. . . . . . . . . . . . . . . . . . . 47
5.08 No Sales to Certain Competitors. . . . . . . . . . . 48
5.09 Right of First Negotiation . . . . . . . . . . . . . 49
5.10 Certain Brand Acquisitions . . . . . . . . . . . . . 49
5.11 Australia. . . . . . . . . . . . . . . . . . . . . . 49
5.12 South Africa . . . . . . . . . . . . . . . . . . . . 50
5.13 Rose's Beverages . . . . . . . . . . . . . . . . . . 50
5.14 Mexican COBO-Tecate Facility . . . . . . . . . . . . 50
5.15 Germany. . . . . . . . . . . . . . . . . . . . . . . 50
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<PAGE>
5.16 Syria. . . . . . . . . . . . . . . . . . . . . . . . 51
5.17 Zimbabwe . . . . . . . . . . . . . . . . . . . . . . 51
5.18 India. . . . . . . . . . . . . . . . . . . . . . . . 52
5.19 Chinese Joint Venture. . . . . . . . . . . . . . . . 52
5.20 Support Agreements; Concentrate Agreement. . . . . . 52
5.21 Facilitation Payments. . . . . . . . . . . . . . . . 53
5.22 Year 2000 Compliance . . . . . . . . . . . . . . . . 53
5.23 Environmental Compliance . . . . . . . . . . . . . . 54
5.24 Debt . . . . . . . . . . . . . . . . . . . . . . . . 54
5.25 Non-Assignable Contracts, Licenses, etc. . . . . . . 54
5.26 Replacement of CS Guarantees . . . . . . . . . . . . 55
5.27 Schweppes EEIG . . . . . . . . . . . . . . . . . . . 55
5.28 Invoicing of CC&SB for Certain Matters . . . . . . . 55
5.29 Certain Furniture and Equipment. . . . . . . . . . . 55
5.30 Trademark Cooperation . . . . . . . . . . . . . . . 55
5.31 Acquired Receivables . . . . . . . . . . . . . . . . 55
ARTICLE 6 CONDITIONS TO CS'S OBLIGATIONS . . . . . . . . . . . 56
6.01 Conditions to the Threshold Closing. . . . . . . . . 56
6.02 Conditions to Each Subsequent Closing. . . . . . . . 57
6.03 CS Country Conditions. . . . . . . . . . . . . . . . 58
ARTICLE 7 CONDITIONS TO KO'S OBLIGATIONS . . . . . . . . . . . 58
7.01 Conditions to the Threshold Closing. . . . . . . . . 58
7.02 Conditions to the Subsequent Closing . . . . . . . . 59
7.03 KO Country Conditions. . . . . . . . . . . . . . . . 61
7.04 Resolution of Certain Disputes . . . . . . . . . . . 62
ARTICLE 8 CLOSINGS . . . . . . . . . . . . . . . . . . . . . . 62
8.01 Threshold Closing Date . . . . . . . . . . . . . . . 62
8.02 Subsequent Closing Dates . . . . . . . . . . . . . . 62
8.03 Closing Requirements . . . . . . . . . . . . . . . . 62
ARTICLE 9 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . 63
9.01 KO Remedies. . . . . . . . . . . . . . . . . . . . . 63
9.02 CS Remedies. . . . . . . . . . . . . . . . . . . . . 67
9.03 Survival of Representation and Warranties. . . . . . 68
9.04 Notice of Claim. . . . . . . . . . . . . . . . . . . 69
9.05 Defense. . . . . . . . . . . . . . . . . . . . . . . 69
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ARTICLE 10 TERMINATION PRIOR TO CLOSING. . . . . . . . . . . . 70
10.01 Termination . . . . . . . . . . . . . . . . . . . . 70
10.02 Termination of Obligations . . . . . . . . . . . . . 71
ARTICLE 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 71
11.01 Entire Agreement . . . . . . . . . . . . . . . . . . 71
11.02 Parties Bound by Agreement; Successors
and Assigns . . . . . . . . . . . . . . . . . . . . 71
11.03 Counterparts . . . . . . . . . . . . . . . . . . . . 72
11.04 Amendment, Modification and Waiver . . . . . . . . . 72
11.05 Expenses . . . . . . . . . . . . . . . . . . . . . . 72
11.06 Notices . . . . . . . . . . . . . . . . . . . . . . 72
11.07 Further Cooperation . . . . . . . . . . . . . . . . 72
11.08 Governing Law; Construction . . . . . . . . . . . . 72
11.09 Arbitration . . . . . . . . . . . . . . . . . . . . 73
11.10 Public Announcements . . . . . . . . . . . . . . . . 74
11.11 No Third-Party Beneficiaries . . . . . . . . . . . . 74
11.12 Specific Performance . . . . . . . . . . . . . . . . 74
11.13 Severability . . . . . . . . . . . . . . . . . . . . 74
11.14 Definitions and Rules and Construction . . . . . . . 74
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<PAGE>
AMENDED AND RESTATED PURCHASE AGREEMENT
THIS AMENDED AND RESTATED PURCHASE AGREEMENT (this
"Agreement"), dated as of December 11, 1998, among THE COCA-COLA
COMPANY, a corporation organized and existing under the laws of
Delaware, U.S.A. ("KO"), ATLANTIC INDUSTRIES, a company organized
and existing under the laws of the Cayman Islands ("AI"), and
CADBURY SCHWEPPES PLC, a company organized and existing under the
laws of England and Wales ("CS");
W I T N E S S E T H:
WHEREAS, CS desires to sell, and to cause the other CS
Parties (as defined in Section 1.01(a)) to sell, to KO or the KO
Buyers (as defined in Section 1.01(a)), and KO desires to buy, or
to cause the KO Buyers to buy, from the CS Parties, the Assets
(as defined in Section 1.01(a)), subject to the assumption by the
KO Parties of certain liabilities as specified herein;
WHEREAS, the parties desire to enter into certain other
transactions and agreements in connection with the foregoing
purchases and sales, all as further described in this Agreement;
WHEREAS, the parties believe that the transactions
contemplated by this Agreement will create mutual benefit by
enhancing the competitiveness and growth of KO- and CS-branded
beverages and the entire commercial beverages market worldwide;
and
WHEREAS, the respective Board of Directors of each party to
this Agreement has authorized such party to execute, deliver and
perform this Agreement;
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and agreements, and upon
the terms and subject to the conditions hereinafter set forth,
the parties do hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.01 PURCHASE AND SALE.
(a) Upon the terms and subject to the conditions of
this Agreement, CS agrees to, and agrees to cause the
subsidiaries of CS which own any of the assets set forth below,
substantially all of which subsidiaries are set forth on Schedule
1.01A (together with CS, the "CS Parties") to, sell at the
Applicable Closing (as defined in Section 1.01(e)), and KO agrees
to buy, or to cause AI or certain other wholly-owned (other than
for nominee shares, director qualifying shares and similar
shares) subsidiaries of KO to be determined by KO (collectively
with AI, the "KO Buyers," and together with KO, the "KO Parties")
to buy, from the CS Parties at the Applicable Closing:
<PAGE>
(i) good, valid and marketable right, title and
interest, free and clear of any Security Interests (as defined
in Section 2.04(a)), in and to all of the issued and outstanding
shares of capital stock (the "Shares") of the company set forth
on Schedule 1.01(a)(i) (the "Purchased Company");
(ii) all right, title and interest of CS and its
Affiliates (as defined below) in and to all of the Owned
Trademarks (as defined in Section 2.13(a)) to the extent not
otherwise acquired pursuant to Section 1.01(a)(i) above (the
"Directly Acquired Trademarks"), including the goodwill
associated with the Directly Acquired Trademarks and all
applications and common law rights related thereto and all rights
to sue and recover from third parties damages for past, present
and future infringements or dilution of or any other damages or
injury to the Directly Acquired Trademarks (the "Related Rights");
(iii) all right, title and interest of CS and its
Affiliates in and to all other assets not included in Sections
1.01(a)(i) and (ii) above, wherever located, used by the CS
Parties in connection with and primarily related to the beverages
business of CS and its Affiliates (outside of the United States,
South Africa, Australia and France) or otherwise used primarily
in connection with the Owned Trademarks, including, without
limitation, all tangible and intangible assets owned by the CS
Parties and currently employed for the production of concentrates
and syrups (including concentrate/juice production plants in Athy,
Ireland (to the extent not otherwise acquired pursuant to Section
1.01(a)(i) above) and Carcagente, Spain and all related assets
and equipment, including billing functions, accounting and
information management functions and other support services (the
concentrate/juice production plants in Athy, Ireland (together
with all related assets and equipment, the "Athy Plant") and
Carcagente, Spain (together with all related assets and equipment,
the "Carcagente Plant") and all such related assets and equipment,
including such billing functions, accounting and information
management functions and other support services being referred to
herein collectively as the "Plants")) in the beverages business
of CS and its Affiliates (outside of the United States, South
Africa, Australia and France) or otherwise primarily used in
connection with the Owned Trademarks; the right to use all Know-
how (as defined below); any and all other intellectual property
or proprietary rights owned by CS or any of its Affiliates
contained in advertising, promotional material, packaging
material or other material used in connection with the sale,
offer of sale or distribution of products bearing or embodying
the Owned Trademarks or Licensed Rights (as defined in Section
2.13(a)) or otherwise used primarily in, or held primarily for
the benefit of, the beverages business of CS and its Affiliates
outside the United States, South Africa, Australia and France;
any trademark(s) owned by the CS Parties, the Purchased Company
or the Subsidiaries (as defined in Section 2.01(b)) that are
identical to or confusingly similar to any Owned Trademark in
the same country and for substantially similar goods as such
Owned Trademark ("Omitted Trademarks"); all Contracts (as defined
in Section 2.20(a)), to the extent assignable, to which CS or any
Affiliate of CS is a party outside of the United States, South
Africa, Australia and France primarily relating to any of the
foregoing or any of the Owned Trademarks, including all bottling
and distribution agreements relating thereto; any other assets
which would reasonably be expected to be included in the
transactions contemplated by this Agreement and the Transaction
Documents; and including without limitation all of the assets and
rights set forth on Schedule 1.01(a)(iii) (collectively, the
"Other Assets"), but specifically excluding the Excluded Assets
(as
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<PAGE>
defined below).
The Shares and the assets of the Purchased Company and the
Subsidiaries (as defined in Section 2.01(b)), the Directly
Acquired Trademarks, the Related Rights and the Other Assets are
referred to herein as the "Assets." "Know-how" shall include all
proprietary formulae, ingredient specifications, bottling
formulae, packaging specifications and other proprietary
technical information and knowledge owned by CS or its Affiliates
or the Purchased Company or the Subsidiaries used in connection
with the beverages business of CS and its Affiliates outside of
the United States, South Africa, Australia and France.
Notwithstanding the foregoing, it is expressly understood
that the term "Assets" shall not include the following "Excluded
Assets" except to the extent set forth on Schedules 1.01(a)(i) or
(iii) or Schedule 2.13(a)(i): (1) the technical facilities and
employees of CS located in Trumbull, Connecticut, U.S.A.; (2) all
Know-how in the Excluded Countries (as defined in Section
1.01(d)); (3) any Assets (other than Owned Trademarks) owned by
the Purchased Businesses (as defined in Section 1.06) in any
Excluded Country and not primarily related to the Purchased
Businesses acquired by the KO Buyers, until such time as an
Applicable Closing occurs with respect to such Purchased
Businesses; (4) all trademarks, trademark registrations and
trademark applications in the United States, South Africa and
France and all other assets and properties related to the
beverages business of CS and its Affiliates in the United States,
South Africa, France and Australia (and not primarily related to
the beverages business of CS and its Affiliates outside the
United States, South Africa, Australia and France) other than the
Assumed Lease (as defined in Section 1.06(a)(iii)) with respect
to certain property in Florida, U.S.A.; (5) the company owned
bottling operations of CS in Belgium, Mexico (the "Mexican COBO"),
Spain, Portugal and Zambia and CS's equity interest in a bottling
company in Zimbabwe (the "CS COBO Operations") and the German
Joint Venture (as defined in Section 5.15); (6) all rights to the
"Concentrate Surcharge" as defined under and paid pursuant to
Clause 4.4 of each of the Licensor Agreements (as defined in the
Letter (the "Brands Letter"), dated June 3, 1996, as restated and
re-executed on February 10, 1997, between CS and Coca-Cola
Enterprises Inc.), as such Licensor Agreements may have been
amended; (7) any cash and cash equivalents of the Purchased
Businesses as of the Applicable Closing Date; (8) all trademarks,
trademark registrations and trademark applications owned by the
Purchased Company or the Subsidiaries that are not Owned
Trademarks or Omitted Trademarks and all other intellectual
property or proprietary rights owned by the Purchased Company or
the Subsidiaries contained in advertising, promotional material,
packaging material or other material of the Purchased Company or
the Subsidiaries which does not embody the Owned Trademarks or
Omitted Trademarks; and (9) any assets and properties of the
Purchased Company and the Subsidiaries that are not related to
the beverages business of CS and its Affiliates outside the
United States, South Africa, Australia and France.
KO and CS recognize that trademarks in Australia have not
been included in the Owned Trademarks. After the date of this
Agreement, KO and CS shall negotiate in good faith, in connection
with the negotiations under Section 5.11, (i) which trademarks in
Australia will be included in the Owned Trademarks and
transferred to the KO Parties at the Threshold Closing and (ii)
the representations, warranties and covenants of the parties
relating thereto. Such
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<PAGE>
Australian trademarks which are identical or substantially
identical to those registrations and applications included in the
Owned Trademarks shall be transferred to the KO Buyers at the
Threshold Closing, whether or not such an agreement has been
reached.
(b) The parties recognize that the transactions
contemplated by this Agreement and the Transaction Documents (as
defined in Section 3.02) provide for the transfer from the CS
Parties to the KO Buyers of Assets and Assumed Liabilities (as
defined in Section 1.06(a)) in numerous countries throughout the
world and that the conditions to the closing of the transactions
contemplated by this Agreement and the Transaction Documents
specified in Articles 6 and 7 may be satisfied in certain
countries before such conditions are satisfied in other countries.
Accordingly, the parties are prepared, subject to the terms and
conditions set forth in this Section 1.01 and in the remainder of
this Agreement (including the adjustments to the Purchase Price
described in Section 1.02), to consummate the transactions
contemplated by this Agreement and the Transaction Documents with
respect to the Purchased Businesses in certain countries prior to
the consummation of the transactions contemplated by this
Agreement and the Transaction Documents with respect to the
Purchased Businesses in other countries. However, the parties
recognize and understand that the transactions contemplated by
this Agreement and the Transaction Documents in any event must
include the Purchased Businesses in certain countries in order
for KO to receive sufficient benefit from the transactions
contemplated hereby and thereby, even taking into account the
Purchase Price adjustments described in Section 1.02.
Accordingly, it is expressly agreed that none of the transactions
contemplated by this Agreement and the Transaction Documents
shall be consummated unless the conditions to closing specified
in Articles 6 and 7 have been satisfied or waived by the
appropriate parties with respect to the Purchased Businesses in
the countries set forth on Schedule 1.01(b) (the "Threshold
Condition").
(c) If the Threshold Condition is satisfied, then at
the closing of the transactions contemplated by this Agreement
and the Transaction Documents with respect to the Purchased
Businesses in the countries sufficient to satisfy the Threshold
Condition (the "Threshold Closing"), the parties shall consummate
the transactions contemplated by this Agreement and the
Transaction Documents in such countries and shall consummate the
transactions contemplated by this Agreement and the Transaction
Documents with respect to the Purchased Businesses in each other
country with respect to which the conditions to closing specified
in Articles 6 and 7 have been satisfied or waived by the
appropriate parties. The date of the Threshold Closing is
referred to herein as the "Threshold Closing Date."
Notwithstanding anything in this Agreement to the contrary, CS
shall cause the CS Parties to transfer each of the Plants to the
KO Buyers at the Threshold Closing even if the remaining
Purchased Businesses in Ireland and Spain cannot be transferred
at the Threshold Closing because the conditions to closing with
respect thereto have not been satisfied.
(d) If the Threshold Condition is satisfied but not
all of the Purchased Businesses in all countries are transferred
to the KO Buyers at the Threshold Closing, then unless otherwise
prohibited by law, at the Threshold Closing the CS Parties shall
assign, transfer and deliver to the KO Buyers all right, title
and interest of the CS Parties in and to all the Owned Trademarks
in all countries throughout the world (excluding the United
States, South Africa and
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<PAGE>
France) (the countries in which the KO Buyers are unable to
purchase the Purchased Businesses being referred to herein as the
"Excluded Countries"), even if KO is unable to purchase the
Purchased Businesses in any such country. In such event, CS or a
subsidiary of CS and KO or a subsidiary of KO shall enter into an
exclusive royalty-free, freely transferable license agreement (an
"Excluded Country License Agreement"), with a right to sublicense,
in form and substance reasonably satisfactory to the parties
pursuant to which KO or such subsidiary will grant to CS or such
subsidiary (and any transferee of CS or such subsidiary) the
right to use in perpetuity such Owned Trademarks in the Excluded
Countries or until such time as KO purchases the Assets related
to such Owned Trademarks in any such Excluded Country. Such
Excluded Country License Agreement shall include, without
limitation, terms providing CS with brand extension and rights
to new packaging, and brands, trademark, trade name or similar
rights connected or associated with such Owned Trademarks. In
the case of Owned Trademarks owned by the Purchased Company or a
Subsidiary in the Excluded Countries, the Purchased Company or
Subsidiary shall prior to the Threshold Closing (i) if not
prohibited by law, retain such Owned Trademarks, in which case
such Purchased Company or Subsidiary shall enter into an Excluded
Country License Agreement with CS or a wholly owned subsidiary of
CS with respect to such Owned Trademarks or (ii) if the retention
of such Owned Trademarks would be prohibited by law, transfer to
CS or a wholly owned subsidiary of CS for fair market value all
of its right, title and interest in such Owned Trademarks. If
the KO Buyers shall subsequently purchase the Purchased Businesses
in any Excluded Country pursuant to this Article 1 at a Subsequent
Closing, the value of such Purchased Businesses shall be as set
forth on Schedule 1.02(b)-1 as if such businesses continued to own
the Owned Trademarks and related rights in such country.
(e) Following the Threshold Closing and for a period
ending on the last business day of the first quarterly period
(i.e., the last business day on or prior to March 31, June 30,
September 30 or December 31) ending following the fifth
anniversary of the Threshold Closing Date (the "Subsequent
Closing Expiration Date"), as the conditions to the closing of
the transactions contemplated by this Agreement and the
Transaction Documents specified in Articles 6 and 7 with respect
to the Purchased Businesses in a country become capable of being
satisfied (or are waived by the appropriate parties), the parties
shall consummate the transactions contemplated by this Agreement
and the Transaction Documents associated with such Purchased
Businesses in such country on the last business day of the first
quarterly period (i.e., the last business day on or prior to
March 31, June 30, September 30 or December 31) following the
satisfaction of such conditions and such other date as may be
agreed by the parties; provided, however, that, except for any
Applicable Closing on the Subsequent Closing Expiration Date, no
such Applicable Closing shall occur until the passage of at least
thirty days following satisfaction of such conditions. Each such
closing is referred to herein as a "Subsequent Closing," and the
Threshold Closing and each Subsequent Closing are referred to
herein individually, as the context may require, as an
"Applicable Closing." The date of a Subsequent Closing is
referred to herein as a "Subsequent Closing Date," and the date
of an Applicable Closing is referred to herein, as the context
may require, as an "Applicable Closing Date."
(f) Notwithstanding the foregoing, KO shall determine
whether the property listed in item 9 (collectively, the "Malvern
Facility") on Schedule 1.01(a)(iii) will be transferred to KO
(and whether the Assumed Lease on Schedule 1.06(a)(iii) relating
to the Malvern Facility
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<PAGE>
will be assumed by KO) at the Threshold Closing or at a Subsequent
Closing. The parties agree that the properties listed in such
items 9(a) and 9(b) must be transferred to the KO Parties at the
same time.
1.02 PURCHASE PRICE.
(a) Subject to Section 1.02(b), the aggregate purchase
price (the "Purchase Price") for the Purchased Businesses shall
be (i) cash in an amount equal to (A) U.S.$1,720,000,000 minus
(B) the Assumed Debt (as defined in Section 5.24), excluding any
Assumed Debt included in the calculation of the Working Capital
Adjustment, plus (C) the Working Capital Adjustment (which may be
positive or negative), plus (D) cash on hand of the Purchased
Company and the Subsidiaries (collectively, the "Cash Portion"),
and (ii) an interest-free registered note substantially in the
form of Exhibit 1.02 issued by KO, AI or another KO Buyer (which
if so issued by AI or another KO Buyer shall be guaranteed by KO)
to the CS Party designated by CS on the Threshold Closing Date in
the principal amount of U.S.$180,000,000 and payable on the tenth
anniversary of the Threshold Closing Date (the "Note").
(b) If the Threshold Condition is satisfied but not
all of the Purchased Businesses are transferred to the KO Buyers
at the Threshold Closing, then the Purchase Price to be paid at
the Threshold Closing shall be reduced (first by reducing the
Cash Portion of the Purchase Price and then next by reducing the
principal amount of the Note) on a country by country basis as
provided in Schedule 1.02(b)-1 by reducing the Purchase Price by
the amount specified in Schedule 1.02(b)-1 with respect to each
country in respect of which all of the Purchased Businesses are
not transferred. If the Threshold Condition is satisfied but the
conditions to closing specified in Articles 6 and 7 shall not
have been satisfied in any of the countries set forth on Schedule
1.02(b)-2, then the Purchase Price payable at the Threshold
Closing shall be reduced by an amount equal to (i) 130% of the
amount specified in Schedule 1.02(b)-1 as the agreed upon value
of such country in the case of the countries set forth on Schedule
1.02(b)-3 and (ii) 120% of the amount specified in Schedule
1.02(b)-1 as the agreed upon value of such country in the case of
the countries set forth on Schedule 1.02(b)-4.
(c) The amount of the Purchase Price to be paid at a
Subsequent Closing in a given country shall equal (i) (A) the
amounts corresponding to the Purchased Businesses being purchased
at such Subsequent Closing as provided in Schedule 1.02(b)-1,
multiplied by (B) (I) 100%, if the Subsequent Closing occurs on
or prior to the third anniversary of the Threshold Closing, (II)
103%, if the Subsequent Closing occurs following the third
anniversary of the Threshold Closing but on or prior to the
fourth anniversary of the Threshold Closing, or (III) 106% if the
Subsequent Closing occurs following the fourth anniversary of the
Threshold Closing, minus (ii) Assumed Debt, if applicable, with
respect to such Purchased Businesses (except for any Assumed Debt
included in the calculation of the Working Capital Adjustment)
plus (iii) the Working Capital Adjustment with respect to such
Purchased Businesses (which may be either positive or negative),
plus (D) cash and cash equivalents on hand of any of the
Purchased Company or the Subsidiaries, if any, being transferred
at such Subsequent Closing, if the Purchased Company and the
Subsidiaries have not been previously transferred. If there is a
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Subsequent Closing in any of the countries listed on Schedule
1.02(c)-1 the amounts in clause (i) above with respect to such
Purchased Businesses in such country shall equal 30% of the
amount specified in Schedule 1.02(b)-1 as the agreed upon value
of such country plus the amount determined by clause (i) for
such country. Likewise, if there is a Subsequent Closing in any
of the countries listed on Schedule 1.02(c)-2, the amounts in
clause (i) above with respect to such Purchased Businesses in
such country shall equal 20% of the amount specified in Schedule
1.02(b)-1 as the agreed upon value of such country plus the
amount determined by clause (i) for such country. With respect
to any country not listed specifically on Schedule 1.02(b)-1, the
amount corresponding to such country for purposes of the Purchase
Price shall be equal to (x) the total value attributed to the
group in which such country is a member, multiplied by (y) a
fraction, the numerator of which shall be the volume of
carbonated soft drink beverages sold during fiscal year 1997 by
CS in such country, and the denominator of which shall be the
volume of carbonated soft drink beverages sold during fiscal year
1997 by CS with respect to the entire group in which such country
is a member. Schedule 1.02(c)-3 indicates to which group each
country that is not specifically identified on Schedule 1.02(b)-1
belongs.
(d) As used herein, the term "Debt" shall mean the
current and long-term portions of any liabilities or obligations
of the Purchased Businesses or related to the Assets that would
be reflected as indebtedness for borrowed money on a balance
sheet prepared in accordance with United Kingdom generally
accepted accounting principles ("UK GAAP"), including, without
limitation, (i) any obligations for borrowed money of the
Purchased Businesses or relating to any of the Assets, and (ii)
all obligations of the Purchased Businesses or relating to any
of the Assets evidenced by bonds, debentures, notes or other
similar instruments.
(e) As used herein, the phrase "Working Capital
Adjustment" shall mean an amount (converted to U.S. dollars based
on the closing exchange rate on the date of the Applicable
Closing), whether positive or negative, equal to (A) (i) the sum
of the line items "Stocks," "Trade/Other Debtors" and
"Intercompany Current Accounts" (if positive), of the Carcagente
Plant, as defined in accordance with the CS Group Hyperion
Reporting System (the "CS Hyperion Reporting System") in each
case as determined in accordance with UK GAAP on a basis
consistent with past practice, minus (ii) the sum of the line
items "Trade/Other Creditors" and the absolute value of
"Intercompany Current Accounts" (if negative) as defined in
accordance with the CS Hyperion Reporting System, in each case as
determined in accordance with UK GAAP on a basis consistent with
past practice, minus (iii) 2,800,000 British pounds; plus (B) (i) the sum
of the line items "Stocks," "Trade/Other Debtors" and "Intercompany
Current Accounts" (if positive) of the Athy Plant, as defined in
accordance with the CS Hyperion Reporting System, in each case as
determined in accordance with UK GAAP on a basis consistent with
past practice, minus (ii) the sum of "Trade/Other Creditors" and
the absolute value of "Intercompany Current Accounts" (if
negative), in each case as determined in accordance with UK GAAP
on a basis consistent with past practice, minus (iii) 2,000,000
British pounds. For purposes of the foregoing, the working
capital of the Athy Plant shall be determined based upon the
principles applied in the CS Hyperion Reporting System as
reflected in the Plant Balance Sheet relating to the Athy Plant,
and specifically shall not include any working capital of the
Purchased Company and Subsidiaries other than that of the Athy Plant.
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1.03 PAYMENTS AT CLOSINGS.
(a) Upon the terms and subject to the conditions of
this Agreement, on the Applicable Closing Date, KO shall, or
shall cause the KO Buyers to, pay to the CS Parties the
Preliminary Purchase Price (or portion thereof) as determined in
accordance with Section 1.03(b).
(b) Not later than seven business days prior to each
Applicable Closing Date, the CS Parties shall prepare and deliver
to the KO Buyers an estimate of the Assumed Debt, the Working
Capital Adjustment (itemized in reasonable detail on an
obligation by obligation and item by item basis) and cash and
cash equivalents of the Purchased Company and the Subsidiaries as
of the close of business on the Applicable Closing Date, and a
calculation of the estimated Purchase Price (or portion thereof)
(the "Preliminary Purchase Price") to be paid at the Applicable
Closing based on such Assumed Debt, Working Capital Adjustment,
cash and cash equivalents, and the Purchased Businesses being
purchased at such Applicable Closing. The calculations of the
Assumed Debt, Working Capital Adjustment, cash and cash
equivalents and the Preliminary Purchase Price shall be
accompanied by a certificate of the chief financial officer of
each of the CS Parties involved in the Applicable Closing to the
effect that such calculations represent a good faith effort
accurately to determine such items in a manner consistent with
the methods to be used in preparing the Applicable Closing Date
Financial Statements.
1.04 CLOSING DATE FINANCIAL STATEMENTS AND CERTIFICATE OF
ADJUSTMENTS.
(a) As soon as practicable after each Applicable
Closing Date, the KO Buyers will prepare balance sheets of the
Purchased Businesses acquired at such Applicable Closing, which
balance sheets shall be prepared as of the close of business on
the Applicable Closing Date and income statements of the
Purchased Businesses so acquired for the periods from January 4,
1998 through January 2, 1999 and from January 3, 1999 through the
Applicable Closing Date. Such balance sheets and income
statements shall be prepared in accordance with UK GAAP,
consistently applied by the Purchased Businesses so acquired in
relation to the Financial Statements (as defined in Section
2.07(a)), such that such balance sheets and income statements
give a true and fair view of the financial position and results
of operations of the Purchased Businesses so acquired at the date
of such balance sheets and income statements and for the period
then ended in conformity with UK GAAP, consistently applied by
the Purchased Businesses so acquired in relation to the Financial
Statements. Such balance sheets and income statements are
referred to herein respectively as the "Applicable Closing Date
Balance Sheets" and the "Applicable Closing Date Income
Statements" and are referred to herein collectively as the
"Applicable Closing Date Financial Statements."
(b) The Applicable Closing Date Financial Statements
shall be delivered by the KO Buyers and the accountants
designated by the KO Buyers (the "KO Accountants") to the CS
Parties as promptly after such Applicable Closing Date as
practicable but in no event later than 120 days following the
Applicable Closing Date. During the preparation of the
Applicable Closing Date Financial Statements (and during the
period of time contemplated by this Section
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1.04(b) and Section 1.04(c)), KO shall cause KO's Accountants to
keep CS's independent accountants ("CS's Accountants") reasonably
informed of the information being used to prepare the Applicable
Closing Date Financial Statements and shall provide CS's
Accountants with reasonable access to all relevant materials,
including without limitation all work papers of KO's Accountants
and access to the books and documents of the Purchased
Businesses. The Applicable Closing Date Financial Statements
shall be accompanied by a statement signed by the chief financial
officer of KO (the "Certificate of Adjustments") containing a
calculation of the Assumed Debt, the Working Capital Adjustment
and cash and cash equivalents of the Purchased Company and the
Subsidiaries with respect to the Purchased Businesses so acquired
as of the Applicable Closing Date and a calculation of the
Purchase Price based on such Assumed Debt and Working Capital
Adjustment (the "Final Purchase Price"). The determination of
the Assumed Debt, the Working Capital Adjustment and cash and
cash equivalents of the Purchased Company and the Subsidiaries
as of the Applicable Closing Date and the Final Purchase Price as
calculated by the KO Buyers shall be binding on the CS Parties if
CS has not delivered written notice (the "Objection Notice") of
objection to the Applicable Closing Date Financial Statements
and/or the Certificate of Adjustments to the KO Buyers within 30
business days following the receipt by the CS Parties of the
Applicable Closing Date Financial Statements and the Certificate
of Adjustments.
(c) CS shall, and shall cause the CS Parties to,
provide the KO Parties and the KO Accountants with such
management letters, certificates, representations and other
documents as in the reasonable judgment of the KO Parties and
the KO Accountants are necessary in order to make the statements
contained in the Certificate of Adjustments or to permit the KO
Accountants to render an opinion that the Applicable Closing Date
Financial Statements give a true and fair view of the financial
position and results of operations of the Purchased Businesses so
acquired at the date of such balance sheets and for the periods
then ended in conformity with UK GAAP, consistently applied by
the Purchased Businesses in relation to the Financial Statements.
Any Objection Notice shall state in reasonable detail the items
and calculations objected to, and the KO Parties, the CS Parties
and their respective accountants will seek in good faith, for a
period of 30 business days following delivery of any Objection
Notice, to resolve promptly the matters set forth in the
Objection Notice. If the parties are unable to resolve such
differences during such 30 business day period, the parties will
submit the matter for the review of Deloitte & Touche or such
other internationally recognized public accounting firm as may be
mutually agreed to by KO and CS (the "Review Accounting Firm"),
and the review by the Review Accounting Firm shall be limited
solely to such items and calculations as were addressed in the
Objection Notice and have not been resolved by the parties.
The parties shall cause the Review Accounting Firm to review as
promptly as practicable, subject to the limitations of the
previous sentence, the preparation of the Applicable Closing Date
Financial Statements and Certificate of Adjustments and the
calculation of the Final Purchase Price set forth therein and to
make, subject to the limitations of the previous sentence, such
corrections thereto as it deems appropriate consistent with the
terms of this Agreement. The Review Accounting Firm shall issue
a written report of its review, setting forth in reasonable
detail its calculation of the Final Purchase Price. The
determination of the Final Purchase Price as calculated by the
Review Accounting Firm shall be conclusive and binding on the KO
Parties, the CS Parties and the Purchased Businesses.
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(d) The fees and expenses of the accountants to the
CS Parties for the services referred to herein shall be paid for
by the CS Parties. The fees and expenses of the KO Accountants
shall be paid by the KO Parties. If differences are submitted
to the Review Accounting Firm, its fees and expenses shall be
shared equally by the CS Parties, on the one hand, and the KO
Parties, on the other.
1.05 POST-CLOSING ADJUSTMENTS. On or before the date that
is ten business days following the date of the final
determination of the Final Purchase Price in accordance with
Section 1.04:
(a) If the Preliminary Purchase Price is less than the
Final Purchase Price, the KO Buyers shall pay to the CS Parties
an amount in cash equal to the difference, together with interest
on such amount for the period from the Applicable Closing Date to
the date of such payment at a rate equal to the United States Fed
Funds Rate, as from time to time in effect and as calculated
based upon a 360-day year (the "Rate").
(b) If the Preliminary Purchase Price is greater than
the Final Purchase Price, CS shall cause the CS Parties to pay to
the KO Buyers an amount in cash equal to such difference,
together with interest on such amount for the period from the
Applicable Closing Date to the date of such payment at a rate
equal to the Rate.
1.06 ASSUMED LIABILITIES; EXCLUDED LIABILITIES
(a) The KO Buyers shall purchase the Assets (including
the Purchased Company and the Subsidiaries) free and clear of any
liabilities or obligations whatsoever, except for the following
(the "Assumed Liabilities " and, together with the Assets, the
"Purchased Businesses"):
(i) all liabilities relating to the Plants, but
only to the extent such liabilities are both (A) reflected and
adequately reserved against in the balance sheets of the Plants
as of the Threshold Closing as prepared in accordance with
Section 1.04, and (B) have been incurred in the ordinary course
of the business of the Plants and consistent with past practices
and are consistent in all material respects in nature and amount
with the liabilities reflected and adequately reserved against in
the balance sheets of the Plants included as Schedule 1.06(a)(i)
(the "Plant Balance Sheets");
(ii) all liabilities and obligations under (A) the
bottling and distribution agreements set forth on Schedule 2.20(c)
(the "Bottling and Distribution Agreements"), including any
marketing commitments with respect thereto (other than the
Supplemental Contributions (as defined in Section 9.01(a)(ix)),
and (B) any Contracts relating to the Plants, in each case of
clauses (A) and (B) in respect only of periods after the
Applicable Closing, and in addition in the case of marketing
commitments and Contracts relating to the Plants only to the
extent entered into in the ordinary course of business consistent
with past practice or disclosed on Schedule 1.06(a)(ii);
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(iii) all liabilities and obligations in respect
only of periods after the Applicable Closing under the real
property lease agreements set forth on Schedule 1.06(a)(iii)
(the "Assumed Leases");
(iv) any Assumed Debt, to the extent included in
the calculation of the Final Purchase Price;
(v) all liabilities and obligations in respect
only of periods after the Applicable Closing under any furniture
or equipment leases relating to the beverages business of CS and
its Affiliates outside the United States, but only to the extent
KO elects to assume any such liabilities or obligations under
Section 5.29; and
(vi) all liabilities and obligations to the extent
specifically provided to be assumed by KO in Sections 5.06 and
5.31(a).
(b) Except as set forth in Section 1.06(a) or Section
9.02(a)(v), the KO Buyers shall not be liable for or responsible
for any liabilities or obligations whatsoever in respect of any
events, circumstances, conditions or facts prior to the Applicable
Closing Date of any of the Purchased Businesses or relating to any
of the Assets or CS's beverages businesses or other businesses,
whether accrued, absolute, contingent, known, unknown or otherwise
(the "Excluded Liabilities"). CS shall be responsible for, shall
assume and shall retain all such Excluded Liabilities (whether or
not any such Excluded Liabilities are liabilities or obligations
of the Purchased Company or the Subsidiaries).
1.07 METHOD OF PAYMENT. All payments from one party to
another under this Agreement shall be made in U.S. dollars by
wire transfer of immediately available funds to such account as
may be reasonably designated by the party to receive such
payments.
1.08 CONVEYANCE DOCUMENTS. At each Applicable Closing, CS
shall, and shall cause the other CS Parties to, enter into
conveyance documents in such form as may be reasonably requested
by KO and the KO Buyers (the "Conveyance Documents"), which
documents will, among other things, provide for the valid and
effective transfer of title in and to the Assets to the KO Buyers
to be acquired at such Applicable Closing, and the assumption or
retention by the CS Parties of the Excluded Liabilities. In
addition, at each Applicable Closing, KO shall, or shall cause
the other KO Buyers to, enter into assumption documents in such
form as may be reasonably requested by the CS Parties (the
"Assumption Documents"), which documents will provide for the
assumption by the KO Buyers of the Assumed Liabilities.
ARTICLE 2
CS REPRESENTATIONS AND WARRANTIES
CS represents and warrants to KO as of the date hereof and
as of each Applicable Closing Date (with respect to the Purchased
Businesses being transferred as of such Applicable Closing Date)
that:
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2.01 ORGANIZATION, ETC.
(a) Each of the CS Parties and the Purchased Company
is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization. The Purchased
Company has all requisite power and authority, corporate or
otherwise, to carry on and conduct its business in all material
respects and to own or lease its properties and assets, and is
duly qualified and in good standing in each jurisdiction in which
the conduct of its business or the ownership of its properties
and assets requires it to be so qualified.
(b) Schedule 2.01(b) sets forth a correct and complete
list of each corporation, association, subsidiary, partnership,
limited liability company or other entity of which the Purchased
Company owns or controls, directly or indirectly, 20% or more of
the outstanding equity interests (such entities are hereinafter
referred to as "Subsidiaries"). Except as set forth in Schedule
2.01(b), there is no corporation, association, subsidiary,
partnership, limited liability company or other entity of which
the Purchased Company owns or controls, directly or indirectly,
any outstanding equity interests. The Purchased Company owns,
directly or indirectly, all of the equity interests of each
Subsidiary, free and clear of any Security Interests. All of
the outstanding capital stock of each Subsidiary has been duly
authorized and is validly issued, fully paid and nonassessable,
and not subject to any preemptive rights. There are no voting
trusts or other agreements or understandings with respect to the
voting of capital stock or other equity interests of any
Subsidiary. Each Subsidiary is duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation, and has the power and authority necessary for it
to own or lease its properties and assets and to carry on its
business in all material respects as it is now being conducted.
Each Subsidiary is duly qualified or licensed to do business and
is in good standing in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes
such qualification or licensing necessary.
(c) CS has made available to KO complete, true and
correct copies of the charter documents and bylaws of CS, the
Purchased Company and the Subsidiaries. The minutes of directors'
and shareholders' meetings and the stock records of the Purchased
Company and the Subsidiaries that have been made available to KO
are in all material respects the complete, true and correct
records of directors' and shareholders' meetings and stock
issuances through and including the date of this Agreement and
constitute all the minutes and stock records in existence.
(d) The officers and directors of the Purchased
Company and the Subsidiaries as of the date of this Agreement
are listed in Schedule 2.01(d).
2.02 AUTHORIZATION; ENFORCEABILITY. CS has all requisite
corporate power and authority to execute and deliver this
Agreement, and CS and each of the other CS Parties shall, at the
time of execution and delivery of such documents at each
Applicable Closing, have all requisite corporate power and
authority to execute and deliver the other agreements to be
entered into by any of such parties pursuant to this Agreement
(the "Seller Transaction Documents") and to carry out their
respective obligations with respect to the transactions
contemplated hereby and thereby. The execution and delivery of
this Agreement and the Seller Transaction Documents by
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each of the CS Parties which is a party thereto and the
consummation of the transactions contemplated hereby and thereby
have been, or in the case of the CS Parties other than CS will be
at the time of execution and delivery of such documents, duly
authorized by all necessary corporate action on the part of each
such party. This Agreement has been (and the other Seller
Transaction Documents will be at the Threshold Closing or at a
Subsequent Closing, as applicable) duly and validly executed and
delivered by each of the CS Parties which is a party thereto, and
(assuming due authorization, execution and delivery by the KO
Parties of this Agreement and the Transaction Documents to which
they are a party) this Agreement constitutes (and each of the
other Seller Transaction Documents will constitute at the
Threshold Closing or at a Subsequent Closing, as applicable) a
valid and binding agreement of each such party enforceable
against it in accordance with its terms.
2.03 NO CONFLICT.
(a) Except as may be necessary as a result of any
facts or circumstances relating solely to the KO Parties, the
execution and delivery of this Agreement and the Seller
Transaction Documents by each of the CS Parties which is a party
thereto, the consummation of the transactions contemplated hereby
and thereby by each of the CS Parties which is a party thereto,
and the performance of the covenants and agreements of each of
the CS Parties contained herein and therein will not, with or
without the giving of notice or the lapse of time, or both (i)
to the knowledge of the CS Parties and the Purchased Businesses,
require any of the CS Parties or any of the Purchased Businesses
to make any material filing or material registration with, or
obtain any material permit, material authorization, material
consent or material approval of, any Governmental Authority
(as defined in Section 2.03(c)), except for the filings and
consents listed in Schedule 2.03 and except for filings,
notifications or approvals required under any antitrust or
competition laws, (ii) violate or conflict with any of the
provisions of any charter instrument, bylaw or other governing
documents of any of the CS Parties or the Purchased Company or
the Subsidiaries, (iii) except as set forth in Schedule 2.03, in
any material respect, violate, conflict with, result in a breach
or default under, or result in the termination of, or cause the
acceleration of the maturity of any material debt or material
obligation pursuant to any term or condition of, any material
mortgage, material note, material indenture, material contract,
material license, material permit, material instrument or other
material agreement or material document to which the Purchased
Company or Subsidiaries is a party or by which any of the
Purchased Businesses or its properties may be bound (or to which
any of the CS Parties is a party or by which it or its properties
may be bound in any case, if such violation, conflict, breach,
default, termination or acceleration would adversely affect in
any material respect the transactions contemplated by this
Agreement or would result in a material Loss to any KO Party or
any Purchased Business), (iv) to the knowledge of the CS Parties
and the Purchased Businesses, and except for filings,
notifications or approvals required under any antitrust or
competition laws, violate in any material respect any provision
of any material statute or material law, any material judgment,
material decree, material order, material regulation or material
rule of any Governmental Authority or any material arbitration
award to which the Purchased Company or Subsidiaries is a party
or by which any Purchased Businesses or its properties may be
bound (or to which any of the CS Parties is a party or by which
it or its properties may be bound in any case if such violation
would adversely affect in any material respect the
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transactions contemplated by this Agreement or would result in
a material Loss to any KO Party or any Purchased Business), or
(v) result in the creation or imposition of any material Security
Interest upon any material Asset or any other material asset of
the Purchased Company or Subsidiaries.
(b) Except as set forth in Schedule 2.03 and except
for filings, notifications or approvals required under any
antitrust or competition laws, to the knowledge of the CS Parties
and the Purchased Businesses, no material consent or material
approval is required by virtue of the execution of this Agreement
or the consummation of any of the transactions contemplated
hereby to avoid the violation or breach in any material respect
of, or the default in any material respect under, or the creation
of a material lien on any of the material Assets or any of the
material assets of the Purchased Company or Subsidiaries pursuant
to the terms of, any material law, material rule, material
regulation, material order, material decree or material award of
any Governmental Authority or any material mortgage, material
note, material license to manufacture and distribute beverages,
material lease, material contract or any other material
instrument to which the Purchased Company or Subsidiaries is a
party or by which any of the Purchased Businesses or any of its
properties is bound.
(c) As used herein, the phrase "Governmental Authority"
shall mean any governmental or regulatory authority or
instrumentality, or any department or agency thereof, including,
without limitation, any court, administrative agency or
commission.
2.04 OWNERSHIP OF THE SHARES.
(a) Except as set forth on Schedule 2.04, each CS
Party owns good and marketable record title to and all beneficial
interest in all of the Shares specified on Schedule 2.04 opposite
such CS Party's name, which in the aggregate constitute 100% of
the share ownership of the Purchased Company. The Shares (i) are
validly issued, fully paid and nonassessable, and (ii) are owned
by the CS Parties free and clear of any Security Interests, with
no defects of title. As used in this Agreement, "Security
Interest" shall mean any pledge, security interest, lien, charge,
equity, claim, option, right of first refusal or other
restriction on transfer of any nature, or any other encumbrance
of any nature.
(b) Each CS Party has the exclusive right, power and
authority to vote the Shares owned by such CS Party. No CS Party
is party to or bound by any agreement affecting or relating to
such CS Party's right to transfer or vote any Shares. There are
no proxies outstanding or powers of attorney granted by any CS
Party with respect to any Shares.
2.05 AUTHORIZED AND OUTSTANDING STOCK. The authorized
capital stock of the Purchased Company and the Subsidiaries and
the number of issued and outstanding shares thereof is set forth
in Schedule 2.05. The list of the shareholders of the Purchased
Company and the Subsidiaries set forth in Schedule 2.05 is a
true, correct and complete list of the record shareholders of
such Purchased Company and the Subsidiaries and the number of
shares held of record by each such shareholder. None of the
Purchased Company or the Subsidiaries or the CS Parties has
outstanding or is bound by, any subscriptions, options, warrants,
calls, commitments
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or agreements requiring any of such Persons (as hereinafter
defined) to issue or sell or entitling any Person to acquire
any shares of capital stock or any other equity security
(including any right of conversion or exchange under any
outstanding security or other instrument) of the Purchased
Company or Subsidiaries, and none of the Purchased Company or the
Subsidiaries or the CS Parties is obligated to issue or dispose
of any shares of capital stock of the Purchased Company or
Subsidiaries for any purpose. All issuances, transfers,
purchases or redemptions of the capital stock of the Purchased
Company and the Subsidiaries have been in compliance with all
applicable agreements and all applicable laws, and all Taxes
(as defined in Section 2.23) thereon have been paid. There are
no outstanding obligations of the Purchased Company or the
Subsidiaries to repurchase, redeem or otherwise acquire any
outstanding shares of stock of the Purchased Company or the
Subsidiaries. There are no shares of capital stock held in the
treasury of the Purchased Company or the Subsidiaries. As used
in this Agreement, "Person" shall mean an individual, a
partnership, a joint venture, a corporation, a trust, an
unincorporated organization or any Governmental Authority or any
other entity.
2.06 TRANSFER CLAIMS. None of the CS Parties, the Purchased
Company or the Subsidiaries has effected any redemption, purchase
or other acquisition from any unaffiliated Person of any capital
stock or other equity interests (including any options, warrants
or debt convertible into stock, options or warrants) of the
Purchased Company or the Subsidiaries (including without
limitation by way of merger or consolidation) during the past
five years which has given or may give rise to any claim or
action by any such Person with respect to any of the foregoing
which is enforceable against any of the Purchased Businesses, the
CS Parties or the KO Parties.
2.07 FINANCIAL STATEMENTS.
(a) Attached as Schedule 2.07 are (i) the audited
balance sheets of the Purchased Company and the Subsidiaries as
at January 3, 1998, and the related audited statements of income
and retained earnings for the periods then ended, together with
the related notes thereto (the "Audited Financial Statements"),
and, (ii) for the Purchased Businesses, (A) the unaudited
management accounts (comprising profit and loss account, balance
sheet and cash flow statement) as of January 3, 1998 and for the
53 weeks then ended, and as at November 6, 1998 and for the 44
weeks then ended (the "Unaudited Management Accounts", and
together with the Audited Financial Statements, the "Financial
Statements"), and (B) unaudited Form 22Bs for the 53 weeks ended
January 3, 1998, derived from the Unaudited Management Accounts,
showing volume and profitability by brand (the "CS GCAM
Statements"). The balance sheets referred to in the Financial
Statements are referred to herein as the "1997 Balance Sheets."
(b) The Audited Financial Statements are based on the
books and records of the Purchased Company and the Subsidiaries
and have been prepared in accordance with the generally accepted
accounting principles applicable in each of the relevant
jurisdictions on a basis consistent with past practices of CS and
the CS Parties and throughout the periods involved. The Audited
Financial Statements present fairly in all material respects the
financial condition and results of operations and retained
earnings of the Purchased Company and the
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Subsidiaries as of such dates or for the periods covered thereby.
(c) The Unaudited Management Accounts (which include
the Plant Balance Sheets and other financial statements relating
to the Plants) have been extracted unadjusted from the CS
Hyperion Reporting System as used throughout the CS Group of
companies (the "CS Group") and presented to the Main Board of CS,
and prepared in accordance with CS Group management accounting
practice. For key reporting lines, the year-end Unaudited
Management Accounts have been reconciled to and are materially
consistent with the audited year-end Group statutory accounts
which are used for external reporting. The Unaudited Management
Accounts are only representative of the businesses being
purchased but are those that most closely match the Purchased
Businesses. Any material differences between the Unaudited
Management Accounts and the individual Purchased Businesses are
clearly identified in the reconciliation of GCAM (as defined in
Section 2.07(d)) following.
(d) The CS GCAM Statements represent an analysis of
volume, net sales, marketing spend and Gross Contribution after
Marketing ("GCAM") of beverage and food brands for each
management entity as identified within the CS Hyperion Reporting
System. The CS GCAM Statements taken as a whole have been
prepared with no material misstatements.
(e) The net revenues and marketing expenditures as
reported in the CS Hyperion Reporting System form the basis for
the CS GCAM Statements (beverages and foods) and on consolidation,
form the basis of CS's audited Group statutory accounts for the
year ended January 3, 1998. The Purchased Businesses do not
include foods or selected brands and countries. The "Purchased
GCAM" can be reconciled to the consolidated GCAM reflected in
CS's Unaudited Management Accounts for the year ended January 3,
1998, and the items below represent all material reconciling
items necessary to perform such a reconciliation.
Total GCAM as per "Unaudited Management Accounts"
and "CS GCAM Statement"
Less: Total foods GCAM
Less: Total non CS - owned brands GCAM
Less: Specific brands - MOTT's
- Clamato
- Mr and Mrs T
- Energade
- Sunboost
- Brookes (Bromor)
- MIAMI (MOTT's)
- Oasis (Italy)
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Less: Specific countries - Puerto Rico (within CSLAMB)
- Australia
- France
- South Africa
Less: General - certain restrictions to
normal concentrate cash flow
arising from minority
holdings in Zimbabwe and
Germany
- 500k British pounds adjustment
reflecting pricing and cost
differentials in GB resulting
from a separate CCE Agreement.
Equals: GCAM of the Purchased Businesses
Notes to reconciliation:
i) For CS COBO operations, the GCAM's represented in the GCAM
statements represent full system GCAM.
ii) The GCAM Statements for Germany and Zimbabwe represent full
company GCAM's (not only CS's shareholdings).
2.08 NO UNDISCLOSED LIABILITIES. Except as set forth on
Schedule 2.08 or as and to the extent reflected and adequately
reserved against in the 1997 Balance Sheets or referred to in
the notes thereto, as of January 3, 1998, none of the Purchased
Businesses had any material liabilities or material obligations,
whether accrued, absolute, contingent, known, unknown or
otherwise. Except as set forth in Schedule 2.08, since January 3,
1998, none of the Purchased Businesses has incurred any material
liabilities or material obligations, except for liabilities and
obligations incurred by the Purchased Businesses in the ordinary
course of business consistent with past practice.
2.09 NO VIOLATION OF LAW; LICENSES AND PERMITS. Except as
set forth on Schedule 2.09, none of the Purchased Businesses is
or, to the knowledge of the CS Parties or the Purchased
Businesses in the past five years has been, in violation in any
material respect of applicable material laws, material ordinances,
material rules, material regulations, material orders or material
decrees, including, without limitation, any antitrust or
competition laws. Each of the Purchased Businesses has all
material licences, material permits or other material
authorizations of Governmental Authorities necessary for the
production and sale of its products, and has all other required
material licenses, material permits or other material
authorizations of Governmental Authorities and has made all
required material filings with any Governmental Authorities
necessary for the conduct of its business.
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2.10 PROPERTY.
(a) Schedule 2.10(a) sets forth a complete and
accurate list and description of all the real property that any
of the Purchased Businesses currently owns or has agreed (or has
an option) to purchase (the "Owned Real Property") or leases for
annual lease payments in excess of U.S.$150,000 (the "Leased Real
Property," and together with the Owned Real Property, the "Real
Property"). Except as set forth in Schedule 2.10(a), (i) none of
the Real Property is subject to any governmental decree or order,
or to the knowledge of the CS Parties or the Purchased Businesses
threatened or proposed order, to be sold or taken by any
Governmental Authority, and (ii) none of the Owned Real Property,
or to the knowledge of the CS Parties or the Purchased Businesses
the Leased Real Property, is subject to any rights of way,
building use restrictions, exceptions, variances, reservations or
limitations (other than any rights of way, building use
restrictions, exceptions, variances, reservations or limitations
which do not affect in any material respect the value of any such
Real Property or the ability to own (in the case of the Owned
Real Property), or to use, operate or conduct business, as
currently used, operated or conducted, on any such Real Property).
The plants and structures owned or leased by the Purchased
Businesses are in reasonable condition.
(b) Except as set forth in Schedule 2.10(b), the Purchased
Businesses (i) own good and marketable title to, or hold valid,
enforceable and subsisting leasehold interests in, all of the
Real Property and have good, valid and marketable title to all
material tangible properties and assets reflected, but not shown
as leased or encumbered, in the 1997 Balance Sheets (except for
inventory and assets sold in the ordinary course of business
consistent with past practice and supplies consumed in the
ordinary course of business consistent with past practice), free
and clear of any and all Security Interests other than Permitted
Liens (as defined in Section 2.10(d)), and (ii) own the Owned
Real Property free and clear of all title defects or Security
Interests other than Permitted Liens.
(c) The rights, properties and other assets presently owned,
leased or licensed by the Purchased Businesses include all
material rights, material properties and other material assets
necessary to permit the Purchased Businesses to conduct their
businesses in all material respects in the same manner as they
have been currently conducted. The Assets include all material
tangible and intangible assets associated with the Owned
Trademarks in each country included in the transactions
contemplated by this Agreement, and include, without limitation,
all material assets, wherever located, used by CS and its
subsidiaries in connection with their international beverages
business (excluding the United States, South Africa, France and
Australia), and all other ancillary activities conducted in
connection with ownership and use of the Owned Trademarks by CS
and its Affiliates.
(d) As used in this Agreement, "Permitted Liens" means the
following Security Interests: (i) Security Interests for Taxes,
assessments or other governmental charges or levies that are not
yet due or payable or that are being contested in good faith by
appropriate proceedings; (ii) statutory Security Interests of
landlords and Security Interests of carriers, warehousemen,
mechanics, materialmen, repairmen and other Security Interests
imposed by statute and on a basis consistent with past practice
for amounts not yet due; (iii) Security
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Interests incurred or deposits made in the ordinary course of the
Purchased Businesses and on a basis consistent with past practice
in connection with worker's compensation, unemployment insurance
or other types of social security; (iv) minor defects of title,
easements, rights-of-way, restrictions and other similar
encumbrances not detracting in any material respect from the
value of any of the Real Property or interfering with the
ordinary conduct of the Purchased Businesses; and (v) Security
Interests incurred in the ordinary course of the Purchased
Businesses and on a basis consistent with past practice securing
obligations or liabilities which are not individually, or in the
aggregate, material to the relevant Real Property.
2.11 LEASES. Schedule 2.11 contains a complete and accurate
list of all leases and lease-purchase arrangements pursuant to
which any of the Purchased Businesses leases real or personal
property from others involving annual payments in excess of
U.S.$150,000. Each such lease is valid, binding and enforceable
in accordance with its terms and is in full force and effect;
there are no existing material defaults with respect thereto by
any of the Purchased Businesses, or to the knowledge of the CS
Parties or the Purchased Businesses any other party thereto; and
no event has occurred which (whether with or without notice,
lapse of time or the happening or occurrence of any other event)
would constitute a material default thereunder by any of the
Purchased Businesses, or to the knowledge of the CS Parties and
the Purchased Businesses any other party thereto. None of the
Purchased Businesses is subject to any capital leases.
2.12 INDEBTEDNESS FOR BORROWED MONEY. Except as set forth
on Schedule 2.12 and except for indebtedness payable to CS or any
subsidiary of CS, there is no direct or indirect indebtedness for
borrowed money of any of the Purchased Businesses or relating to
any of the Assets in any case either (i) on terms which do not
reflect arms' length terms, or (ii) in excess of U.S. $1,000,000,
including any indebtedness by way of lease-purchase arrangements,
guarantees, undertakings on which others rely in extending credit
and conditional sales contracts, chattel mortgages and other
security arrangements with respect to personal property used or
owned by any of the Purchased Businesses or relating to any of
the Assets. No such indebtedness set forth on Schedule 2.12
provides for any prepayment penalty or premium.
2.13 INTELLECTUAL PROPERTY.
(a) "Owned Trademarks" shall mean the trademarks set
forth on Schedule 2.13(a)(i). "Major Trademarks" shall mean
those registrations included in the Owned Trademarks that
correspond to the brand names, current labels, elements of
current labels, current slogans, and current bottle designs of
the products currently being sold in the countries set forth on
Schedule 2.13(a)(ii). Without limiting the foregoing, and in
addition thereto, any trademark registrations of the Owned
Trademarks which are currently in bona fide commercial use by
the Purchased Businesses shall be considered Major Trademarks and
any trademark registrations of the Owned Trademarks for the
DR. PEPPER trademark, which are currently in use by the Purchased
Businesses, shall be considered Major Trademarks. "Miscellaneous
Trademarks" shall mean all trademark registrations and
applications of the Owned Trademarks not included in the Major
Trademarks. Schedule 2.13(a)(iii) sets forth a complete and
accurate list of all patents and copyrights, including
registrations thereof and applications therefor, and industrial
design registrations, in each case owned by the CS Parties and
material to the
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Purchased Businesses (the "Intellectual Property Rights").
Schedule 2.13(a)(iv) sets forth a complete and accurate list of
all licenses of patents, trademarks, trade names, service marks,
copyrights and applications therefor licensed to any of the CS
Parties that are material to the Purchased Businesses (the
"Licensed Rights"). The consummation of the transactions
contemplated hereby will not result in the termination or
impairment of any of the Major Trademarks.
(b) The CS Parties, the Purchased Company, and the
Subsidiaries hold good, valid and enforceable right, title and
interest in and to the Major Trademarks free and clear of any
Security Interests and at the Applicable Closing the CS Parties
will transfer to the KO Buyers good, valid and enforceable right,
title and interest in and to the Major Trademarks, free and clear
of any Security Interests. The Major Trademarks have not been
adjudged invalid or unenforceable in whole or in part, and any
registrations thereof are in full force and effect.
(c) The CS Parties are not aware of any existing facts
or circumstances that may reasonably be expected to result in the
invalidity or unenforceability of the Major Trademarks. The
validity of the Major Trademarks, and title thereto have not been
successfully challenged in any prior litigation and except as set
forth in Schedule 2.13(b) (i) are not being challenged in any
pending litigation and (ii) to the knowledge of the CS Parties,
are not the subject(s) of any threatened litigation. None of
matters on Schedule 2.13(b) may reasonably be expected to result
in the invalidity or unenforceability of any of the Major
Trademarks.
(d) Except as set forth on Schedule 2.13(b), no Person
is currently engaging in any commercial activity that infringes
upon the Major Trademarks or has engaged in any commercial
activity infringing upon the Major Trademarks that has any
current effect.
(e) Except as set forth on Schedule 2.13(b), to the
knowledge of the CS Parties, no person is engaging in any
commercial activity that infringes upon the Miscellaneous
Trademarks or the Intellectual Property rights in any material
respect. Except as set forth on Schedule 2.13(b), to the
knowledge of the CS Parties, the CS Parties, the Purchased
Company, and/or the Subsidiaries own the Intellectual Property
Rights and the Miscellaneous Trademarks free and clear of any
Security Interests. Except as set forth on Schedule 2.13(b),
to the knowledge of the CS Parties, the Intellectual Property
Rights and the Miscellaneous Trademarks have not been adjudged
invalid or unenforceable in whole or in part, and any
registrations thereof are valid and in full force and effect.
Except as set forth on Schedule 2.13(b), to the knowledge of the
CS Parties, the validity of the Intellectual Property Rights and
the Miscellaneous Trademarks, and title thereto, and the rights
of the CS Parties in the Licensed Rights, (i) have not been
successfully challenged in any prior litigation; (ii) are not
being challenged in any pending litigation and (iii) to the
knowledge of the CS Parties, are not the subject(s) of any
threatened litigation.
(f) Except as set forth on Schedule 2.13(b), the use
of the Major Trademarks and to the knowledge of the CS Parties
the operation of the businesses of the Purchased Businesses and
the use of the Intellectual Property Rights and the Miscellaneous
Trademarks, have not been alleged to infringe upon, and do not
infringe upon, any patents, trademarks, trade
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names, service marks, or copyrights of third parties in any
material respect. Except as set forth on Schedule 2.13(b), to
the knowledge of the CS Parties, the consummation of the
transactions contemplated hereby will not result in the
termination or impairment of the Miscellaneous Trademarks and
the Intellectual Property Rights in any material respect. To
the knowledge of the CS Parties, the patents, trademarks, trade
names, service marks, or copyrights licensed to the CS Parties as
Licensed Rights have not been alleged to infringe upon and do not
infringe upon any patents, trademarks, trade names, service marks,
or copyrights of third parties in any material respect.
(g) The trademarks set forth on Schedule 2.13(a)(i)
and the licenses set forth on Schedule 2.13(a)(iv) include all of
the trademark rights owned by or licensed to the CS Parties
material to, and used in the conduct of, the Purchased Businesses
as currently conducted.
(h) Each license of the Licensed Rights is valid and
binding and is enforceable in accordance with its terms in a
manner that obtains for or imposes upon the parties the primary
material benefits and obligations of such license. As of the
date of this Agreement, to the knowledge of the CS Parties, there
is no material pending or threatened bankruptcy, insolvency, or
similar proceeding with respect to any party to such license, and
no event has occurred which (whether with or without notice,
lapse of time or the happening or occurrence of any other event)
would constitute a material default by the Purchased Businesses
thereunder or, to the knowledge of the CS Parties, by any other
party to such license. The Purchased Businesses have complied
in all material respects with the provisions of such license.
(i) Except as set forth on Schedule 2.13(b), to the
knowledge of the CS Parties, no advertising, promotional material,
packaging material or other material currently used by the
Purchased Businesses in connection with the sale, offer for sale
or distribution of products in connection with the Purchased
Businesses, has been alleged to infringe upon the patents,
trademarks, trade names, service marks or copyrights of third
parties in any material respect.
(j) KO acknowledges that the representations and
warranties contained in Section 2.10(c) and this Section 2.13 are
the only representations and warranties being made in this
Agreement with respect to the Owned Trademarks, Intellectual
Property Rights and the Licensed Rights.
2.14 LITIGATION AND CLAIMS. Schedule 2.14 sets forth all
pending or, to the knowledge of the CS Parties or the Purchased
Businesses, threatened, litigation, claims, suits, actions,
investigations, indictments, informations or proceedings (except
for Environmental Claims which are addressed in Section 2.17)
involving amounts in excess of U.S.$250,000 to which any of the
Purchased Businesses is or may become a party or is or may be
subject. Except as set forth in Schedule 2.14, there are no
material judgments, material orders, material injunctions,
material decrees, material stipulations or material awards
(whether rendered by a court, administrative agency or by
arbitration) (except for Environmental Claims which are addressed
in Section 2.17) enforceable against or relating to any of the
Purchased Businesses.
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2.15 EMPLOYEE CONTRACTS, UNION AGREEMENTS AND BENEFIT PLANS.
(a) As used in this Agreement, the term "Employee
Benefit Plans" means all material written and enforceable oral
agreements, arrangements, commitments or policies of any kind
which relate to compensation, remuneration or benefits in any way
or which constitute employment, consulting or collective
bargaining contracts, or deferred compensation, pension, multi-
employer, profit sharing, thrift, retirement, stock ownership,
stock appreciation rights, bonus, stock option, stock purchase or
other compensation commitments, benefit plans, arrangements or
plans, including all welfare plans and all union-sponsored plans,
of or pertaining to the present or former employees (including
retirees) or directors (or their dependents, spouses or
beneficiaries) of any of the Purchased Businesses or any
predecessors in interest thereto, that are currently in effect or
as to which any of the Purchased Businesses has any ongoing
liability or obligation whatsoever.
(b) Schedule 2.15(b) contains a complete and accurate
list of each collective bargaining agreement and any Employee
Benefit Plan providing for benefits which either are not
customary or which are outside of the ordinary course of business.
Each Purchased Business and its predecessors in interest have
complied in all material respects with all of their respective
obligations with respect to all Employee Benefit Plans, including
the payment of all material social security and other material
contributions required by law, and the Employee Benefit Plans
have been maintained in compliance in all material respects with
all applicable laws, rules and regulations. No Employee Benefit
Plan (other than union-sponsored plans) is currently under
investigation, audit or review by any Governmental Authority and
to the knowledge of the CS Parties and the Purchased Businesses,
no union-sponsored plan included within the definition of
Employee Benefit Plan is currently under investigation, audit or
review by any Governmental Authority. No Employee Benefit Plan
(other than union-sponsored plans) is liable for any material
amount of Taxes, except in the ordinary course and for current
periods, and to the knowledge of the CS Parties and the Purchased
Businesses, no union-sponsored plan included within the
definition of Employee Benefit Plan is liable for any material
amount of Taxes, except in the ordinary course and for current
periods. There are no material claims pending, or to the
knowledge of the CS Parties or the Purchased Businesses
threatened, by any participant in any of the Employee Benefit
Plans, except for benefits to participants or beneficiaries in
accordance with the terms of the Employee Benefit Plans. There
is no obligation on the part of any of the Purchased Businesses
to pay any bonus to retired or retiring employees or former
employees under any collective bargaining agreement.
(c) There are no material loans or other material
advances made by any of the Purchased Businesses to any present
or former employees (including retirees), directors or
independent contractors (or their dependents, spouses or
beneficiaries) of any of the Purchased Businesses, except in the
ordinary course of business consistent with past practice.
2.16 LABOR RELATIONS. Except as set forth in Schedule 2.16:
(a) Each of the Purchased Businesses is in compliance
in all material respects with all collective bargaining
agreements with respect to employment and employment practices,
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terms and conditions of employment and wages and hours and
occupational safety and health.
(b) There is no material unfair labor practice or
charge or complaint or any other similar matter against or
involving any of the Purchased Businesses pending, or to the
knowledge of the CS Parties or the Purchased Businesses
threatened, before any Governmental Authority. There is no labor
strike, dispute, slowdown or stoppage pending, or to the
knowledge of the CS Parties or the Purchased Businesses
threatened, against any of the Purchased Businesses. No material
grievance proceeding or material arbitration proceeding arising
out of or under any collective bargaining agreement is pending,
or to the knowledge of the CS Parties or the Purchased Company
threatened, against any of the Purchased Businesses. No
collective bargaining agreement in any way prevents any of the
Purchased Businesses from relocating or closing any of its
operations.
(c) There are no material charges, material
proceedings or material formal complaints of discrimination
(including discrimination based upon sex, age, marital status,
race, religion, national origin, sexual preference, handicap or
veteran status) pending, or to the knowledge of the CS Parties or
the Purchased Businesses threatened, by or before any
Governmental Authority with respect to any of the Purchased
Businesses.
2.17 ENVIRONMENTAL PROTECTION. Except as set forth in
Schedule 2.17:
(a) Each of the Purchased Businesses has obtained all
material permits, material licenses and other material
authorizations and filed all material notices which are required
to be obtained or filed by it for the operation of its business
under Environmental Laws. Each of the Purchased Businesses is in
compliance in all material respects with all terms and conditions
of such permits, licenses and authorizations.
(b) Each of the Purchased Businesses is in compliance
in all material respects with all applicable Environmental Laws.
None of the Purchased Businesses has received any communication,
whether from a Governmental Authority, citizens group, employee
or otherwise, that alleges that any of the Purchased Businesses
is not in such compliance. There are no past or present events,
conditions, circumstances, activities, practices, incidents,
actions, failures to act or plans which are reasonably likely to
interfere with or prevent continued compliance in all material
respects with Environmental Laws, or which are reasonably likely
to give rise to any material common law or statutory liability,
or otherwise form the basis of any material Environmental Claim
(as hereinafter defined) against any of the Purchased Businesses
or against any Person whose liability for any Environmental Claim
any of the Purchased Businesses has or may have retained or
assumed either contractually or by operation of law. There are
no material Environmental Claims pending, or to the knowledge of
the CS Parties or the Purchased Businesses threatened, against
any of the Purchased Businesses.
(c) As used herein, the following terms have the
following meanings:
(i) "Environmental Claim" means any notice
received by any of the CS Parties or the Purchased Businesses,
alleging liability (including, without limitation, liability
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for investigatory costs, cleanup costs, governmental response
costs, natural resource damages, property damages, personal
injuries, fines, permit or registration fees or penalties), and
any action, suit, proceeding, hearing or investigation involving
or against any of the Purchased Businesses or any of their assets
or properties (or any predecessor in interest) arising out of,
based upon or resulting from (i) the presence in, or release into,
the environment of any Material of Environmental Concern at any
location, or in connection with business operations, whether or
not owned by any of the Purchased Businesses, or (ii)
circumstances forming the basis of any violation or alleged
violation of any Environmental Law.
(ii) "Environmental Laws" means all applicable
laws, rules and regulations in effect on or prior to the
Applicable Closing Date relating to pollution or the protection
of human health and the environment (including, without
limitation, ambient air, surface water, ground water, land
surface or subsurface strata) and similar laws, rules and
regulations relating to the protection of human health,
including, without limitation, laws, rules and regulations
relating to discharge, emissions, releases or threatened releases
of Material of Environmental Concern or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Material of Environmental
Concern.
(iii) "Material of Environmental Concern" means
asbestos, polychlorinated biphenyls ("PCBs"), chemicals,
pollutants, contaminants, wastes, hazardous or toxic substances
or materials, petroleum and petroleum products or any other
materials that are subject to regulation pursuant to
Environmental Laws or are defined as "hazardous substances"
within the meaning of any Environmental Laws.
2.18 INSURANCE POLICIES. The Purchased Businesses are
covered by insurance policies or binders of insurance or programs
of self-insurance of such types and in such amounts as are
reasonable or consistent in all material respects with customary
practices and standards of the beverage industry in the relevant
geographic areas. Each such policy is valid and binding and in
full force and effect, no premiums currently due thereunder have
not been paid, and none of CS, the CS Parties, the Purchased
Company or any Subsidiary has received any notice of material
reduction, cancellation or termination in respect of any such
policy or is in material default thereunder. Except as disclosed
in Schedule 2.18 and except for any CS Policies (as defined in
Section 4.13), such policies will continue in full force and
effect following the Applicable Closing without penalty provided
the premiums are paid.
2.19 MAJOR SUPPLIERS AND CUSTOMERS. None of the Purchased
Businesses is engaged in any material dispute with any of its
material suppliers or material customers.
2.20 CONTRACTS AND COMMITMENTS.
(a) For purposes of this Agreement, "Contract" means
any contract, agreement, promissory note, debt instrument,
commitment, arrangement, undertaking or understanding to which
any of the Purchased Businesses is legally bound or to which it
or its property is subject, whether written or oral and including
without limitation each and every amendment, modification or
supplement to any of them.
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(b) Schedule 2.20(b) lists each Contract (other than
Contracts required to be included on Schedule 2.11, 2.13, 2.15
and 2.20(c)):
(i) for the purchase or rental of materials,
inventory and supplies by any of the Purchased Businesses which
individually exceeds U.S$3,000,000;
(ii) for the sale of goods or products by any of
the Purchased Businesses which individually involves an amount or
value in excess of U.S.$3,000,000;
(iii) for the purchase of services by any of the
Purchased Businesses which individually involves an amount in
excess of U.S.$3,000,000;
(iv) under which any of the Purchased Businesses
acts or has agreed to act as guarantor, surety, co-signer,
endorser, co-maker or indemnitor in respect of the contract or
commitment of any other Person, in each case involving an amount
or value in excess of U.S. $1,000,000;
(v) containing covenants limiting in any material
respect the freedom of any of the Purchased Businesses to compete
in any line of business in any geographic area covered by this
Agreement or providing benefits substantially similar to those
provided by an equity interest; and
(vi) which is material to the Purchased Businesses
taken as a whole or the absence of which would have or would be
reasonably likely to have a Material Adverse Effect.
(c) Except for arms'-length commercial arrangements
entered into by the Purchased Businesses with their respective
bottlers in the ordinary course of business pursuant thereto,
the bottling agreements and distribution agreements provided by
CS to KO and listed on Schedule 2.20(c) are true, correct and
complete and constitute all of the bottling and distribution
agreements to which any of CS or any of its Affiliates is a party.
Except as set forth on Schedule 2.20(c), there are no sublicenses
of any such bottling or distribution agreements or any rights
thereunder. It is CS's practice not to include in its bottling
and distribution agreements change of control provisions with
respect to CS or provisions which would prohibit or limit CS's
ability to assign such agreements. Accordingly, other than for a
small number of agreements, there are no bottling or distribution
agreements containing change of control provisions with respect
to CS or provisions which prohibit or limit CS's ability to assign
such agreements. With respect to each bottling or distribution
agreement which is incomplete, unsigned or in draft form, or as
to which the termination date cannot be determined from the
bottling or distribution agreement as furnished to KO prior to
the date hereof, the actual complete, signed, effective bottling
agreement with regard to such territory, and such termination
date, is not materially (x) different from what was furnished to
KO with respect to that territory (as listed on Schedule 2.20(c)),
or (y) later than the termination date specified in Schedule 2 to
the letter between the parties dated November 25, 1998,
respectively.
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2.21 AGREEMENTS IN FULL FORCE AND EFFECT. Except as set
forth in Schedule 2.21, all Contracts referred to, or required
to be referred to, in Schedules 2.20(b) and 2.20(c) are valid
and binding, and are enforceable in accordance with their terms
in a manner that obtains for or imposes upon the parties the
primary material benefits and obligations of such Contracts.
Except as set forth in Schedule 2.21, to the knowledge of the
CS Parties or the Purchased Businesses there is no material
pending or threatened bankruptcy, insolvency or similar
proceeding with respect to any party to such Contracts, and no
event has occurred which (whether with or without notice, lapse
of time or the happening or occurrence of any other event) would
constitute a material default by the Purchased Businesses
thereunder or, to the knowledge of the CS Parties or the
Purchased Businesses, by any other party to any such Contract.
The Purchased Businesses have complied in all material respects
with the provisions of such Contracts.
2.22 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set
forth in Schedule 2.22, since January 3, 1998, the Purchased
Businesses taken as a whole have been conducted only in the
ordinary course, and the Purchased Businesses have not:
(a) suffered any event or change, which individually
or in the aggregate, has had or is reasonably likely to have a
Material Adverse Effect;
(b) made any declaration, setting aside or payment of
any dividend (other than cash dividends) or other distribution of
assets (whether in cash, stock or property) with respect to its
capital stock, or issued or sold any of its capital stock, or
made any change in its issued and outstanding capital stock, or
issued any warrant, option or other right to purchase shares of
its capital stock, or any security convertible into its capital
stock or redeemed, purchased or otherwise acquired (directly or
indirectly) any shares of its capital stock;
(c) acquired any material business or any material
interest in any material business;
(d) suffered any material adverse change in its
relationships with any material suppliers or material customers;
(e) except as required by law and except in the
ordinary course of business consistent with past practice, (i)
increased (or announced any increase of) the compensation payable
or to become payable to any employee or increased any bonus,
insurance, pension or other employee benefit plan, payment or
arrangement for such employees, (ii) entered into or amended any
employment, consulting, severance or similar agreement or (iii)
hired, committed to hire, or terminated any employee whose annual
compensation exceeds U.S.$150,000;
(f) except after the date of this Agreement in the
ordinary course of business consistent with past practice,
incurred, assumed or guaranteed any obligation or liability for
borrowed money in excess of U.S. $1,000,000, or exchanged,
refunded or renewed any outstanding indebtedness in excess of
U.S. $1,000,000;
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(g) except in the ordinary course of business
consistent with past practice, paid, discharged or satisfied any
claim, liability or obligation involving amounts in excess of
U.S. $1,000,000 in the aggregate;
(h) permitted any of its material assets to be
subjected to any Security Interest;
(i) intentionally waived any material claims or rights;
(j) sold, transferred or otherwise disposed of any
material assets, except in the ordinary course of business
consistent with past practice;
(k) made capital expenditures or investments
individually in excess of U.S.$1,000,000;
(l) made any change in any method of accounting, or
any practice or principle of accounting, except for any changes
after the date of this Agreement which are required by UK GAAP;
(m) paid, loaned or advanced any amount or asset to
or sold, transferred or leased any asset to any employee except
for normal compensation involving salary and benefits in the
ordinary course of business consistent with past practice;
(n) written down the value of any inventory in excess
of U.S. $3,000,000 in the aggregate on an annual basis, or
written off as uncollectible or forgiven any notes or accounts
receivable or other debt or increased its allowance for doubtful
accounts by a total of more than U.S. $4,000,000 in the aggregate
on an annual basis;
(o) amended the charter, bylaws or other governing
documents of the Purchased Company or the Subsidiaries;
(p) materially amended or terminated any material
Contract, including any bottling or distribution agreement or any
Employee Benefit Plan, except in the ordinary course of business,
or materially amended or entered into any new collective
bargaining agreement except in the ordinary course of business;
(q) entered into any material commitment or
transaction, other than in the ordinary course of business
consistent with past practice;
(r) knowingly done any act, omitted to do any act, or
permitted any act within its control which would cause a material
breach of any representation, warranty, covenant, agreement or
obligation contained in this Agreement; or
(s) agreed in writing, or otherwise, to take any
action described in this Section 2.22.
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2.23 TAX MATTERS.
(a) For purposes of this Agreement, "Taxes" shall mean
all income, franchise, capital stock, real property, personal
property, tangible, withholding, unemployment compensation,
disability, transfer, sales, use, excise, soft drink, gross
receipts and all other taxes, assessments, charges, duties, fees,
levies or other governmental charges (including interest,
penalties or additions associated therewith) of any kind for
which the Purchased Company or the Subsidiaries may have any
liability imposed by any Governmental Authority or to which any
of the Assets may be subject in the hands of a KO Buyer, whether
disputed or not, and any charges, interest or penalties imposed
by any Governmental Authority as the result of the failure to
file any Tax Return. "Tax Return" shall mean any report, return,
declaration or other information required to be supplied to a
Governmental Authority in connection with Taxes.
(b) Except as otherwise disclosed in Schedule 2.23 and
except in such respects as are not material: (i) all Tax Returns
(as defined in Section 2.23(a)), including estimated returns and reports
of every kind with respect to Taxes, which are due to have been
filed through the date of this Agreement in accordance with any
applicable law or any applicable extensions, have been duly filed
(and all such returns or reports due after the date of this
Agreement and on or prior to the Applicable Closing Date will be
filed prior to the Applicable Closing Date); (ii) all Taxes shown
on such Tax Returns or otherwise required to be paid by any of
the Purchased Businesses (whether or not a Tax Return is required
to be filed in respect thereof) have been paid in full or are
accrued or will be accrued as of the Applicable Closing Date as
liabilities for Taxes on the books and records of the Purchased
Businesses; (iii) the Taxes so paid on or before the date of
this Agreement, together with any amounts accrued as liabilities
for Taxes (including Taxes accrued as currently payable) on the
books of the Purchased Company and the Subsidiaries, will be
adequate based on the applicable tax rates, laws and regulations
to satisfy all liabilities for Taxes of the Purchased Company and
Subsidiaries in any jurisdiction through the Applicable Closing
Date, including Taxes payable with respect to income treated in
accordance with Section 5.04(a) hereof as earned through the
Applicable Closing Date; (iv) there are not now any extensions
of time in effect with respect to the dates on which any Tax
Returns were or are due to be filed; (v) all deficiencies
asserted as a result of any examination of any Tax Return have
been paid in full, accrued on the books of the Purchased Company
or the Subsidiaries, or finally settled, and no issue has been
raised in any such examination which, by application of the same
or similar principles, reasonably could be expected to result in
a proposed deficiency for any other period not so examined; (vi)
no Tax claims have been asserted and no proposals or deficiencies
for any Taxes are being asserted, proposed or threatened, and no
audit or investigation of any Tax Return is currently underway,
pending or threatened; (vii) within the CS Parties' knowledge the
Tax bases for all depreciable assets held by the Purchased
Businesses have been determined in good faith and in accordance
with applicable law; (viii) no Tax Returns relating to taxable
periods ending on or after December 31, 1992 have been examined
or audited by any Governmental Authorities; (ix) there are no
outstanding waivers or agreements by or with respect to any of
the Purchased Businesses for the extension of time for the
assessment of any Taxes or deficiency thereof, nor are there any
requests for rulings, outstanding subpoenas or requests for
information, notice of proposed reassessment of any property
owned or leased by any of the Purchased Businesses pending
between any of the Purchased Businesses and any
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taxing authority; (x) there are no liens for Taxes on any of the
assets of the Purchased Businesses, other than liens for Taxes
which are not yet past due, nor are there any such liens within
the CS Parties' knowledge for Taxes which are pending or
threatened; (xi) since December 31, 1997, there have not been
established on the books, records or financial statements of the
Purchased Businesses any accruals or reserves for Taxes other
than in the ordinary course of business consistent with past
practice; and (xii) none of the Purchased Businesses has any
potential liability to Taxes arising from the use of any form of
group transaction relief.
(c) The Purchased Company and the Subsidiaries have
delivered to KO true and complete copies of all income Tax
returns (together with any revenue agent's reports) relating to
its operations for the three most recent years for which Tax
returns are due to have been filed.
2.24 ACCOUNTS RECEIVABLE. Except as shown in Schedule 2.24,
all of the accounts receivable of the Purchased Businesses in
excess of U.S.$2,000,000 are valid and existing, and as of the
date of this Agreement, there is no material dispute regarding
the collectibility of any such accounts receivable. None of the
accounts receivable of the Purchased Businesses is factored, and
since January 31, 1998, none of the Purchased Businesses has
factored any of its accounts receivable.
2.25 PRODUCT AND SERVICE WARRANTIES. Except in the ordinary
course of business consistent with past practice and except as
set forth on Schedule 2.25, none of the Purchased Businesses
makes any express warranties or guaranties on its own behalf as
to goods sold or services provided by it.
2.26 BROKERS' AND FINDERS' FEES. None of the CS Parties or
the Purchased Businesses or any of their respective Affiliates or
anyone acting on behalf of any of them has done anything to cause
or incur any liability to any party for any brokers' or finders'
fees or the like in connection with this Agreement or any
transaction contemplated hereby.
2.27 TRANSACTIONS WITH AFFILIATES. Except as disclosed in
Schedule 2.27, none of the CS Parties or any Affiliate thereof
(i) is indebted to any of the Purchased Businesses with respect
to any liabilities or obligations which will survive the
Applicable Closing Date with respect to such Purchased
Businesses, (ii) is a party to any Contract with any of the
Purchased Businesses with respect to which any liabilities or
obligations thereunder will survive the Applicable Closing Date,
or (iii) has an ownership interest in any business, corporate or
otherwise, that is a party to, or in any property which is the
subject of, business arrangements or relationships of any kind
with any of the Purchased Businesses with respect to which any
liabilities or obligations thereunder will survive the
Applicable Closing Date (excluding for such purposes the
ownership of less than 5% of the outstanding equity of any
publicly traded corporation of which such Person is neither an
officer or a director). None of the CS Parties or any Affiliate
thereof or any officer or director of any of the CS Parties or
any Affiliate thereof (including any officer or director of any
of the Purchased Businesses) is a party to any Contract with any
of the Purchased Businesses which is not on arms' length terms,
or has an ownership interest in any business, corporate or
otherwise, that is a party to, or in any property which is the
subject of, business
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arrangements or relationships of any kind with any of the
Purchased Businesses which are not on arms' length terms.
2.28 YEAR 2000.
For the purposes of this Section 2.28, the following terms
shall have the meanings set forth below:
"Facilities" means any facilities, processes, equipment or
other assets owned, or to the extent material to the Plants
leased, by any of the Plants in any location, including HVAC
systems, mechanical systems, elevators, security systems, fire
suppression systems, telecommunications systems, fax machines,
copy machines, and equipment.
"Products" means any products currently sold by any of the
Plants.
"Internal MIS Systems" means any computer software and
systems (including hardware, firmware, operating system software,
utilities and applications software) used in the ordinary course
of the business of the Plants (and in the case of such software
and systems licensed from others, which is material to the
operation of the businesses of the Plants), including, where
applicable, their payroll, accounting, billing/receivables,
purchasing/payables, inventory, asset tracking, customer service,
human resources, and E-mail systems.
"Year 2000 Compliant" means that the Facilities, Products
and Internal MIS Systems provide uninterrupted millennium
functionality in that the Facilities, Products and Internal MIS
Systems will record, store, process and present calendar dates
falling on or after January 1, 2000, in the same manner, and with
the same functionality, as the Facilities, Products and Internal
MIS Systems record, store, process and present calendar dates
falling on or before December 31, 1999.
Schedule 2.28 sets forth the plan for each Plant
(collectively, the "Y2K Plan") (i) setting forth the material
steps taken to date, and (ii) the material steps that they intend
to take following the date hereof to remediate any failure of any
of the Facilities, Products and Internal MIS Systems to be Year
2000 Compliant in all material respects (the "Year 2000 Computer
Date Problem"). None of the CS Parties or the Purchased
Businesses is aware of any facts or circumstances that would
prevent the Plants from achieving remediation of the Year 2000
Computer Date Problem in all material respects with respect to
the business of the Plants in accordance with the Y2K Plan. Upon
remediation of the Year 2000 Computer Date Problem in accordance
with the Y2K Plan, the Year 2000 Computer Date Problem will not
affect the conduct of the business of the Plants in any material
respect.
CS represents and warrants that the Plants will not have
expenses after the Threshold Closing in excess of U.S. $200,000
in order to remediate the Year 2000 Computer Date Problem.
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2.29 E.U. AND U.S. PRESENCE
(a) The concentrate turnover and royalty or other
income derived from the ordinary activities (within the meaning
of Council Regulation EEC No. 4064/89) of the Purchased
Businesses (net of V.A.T., other turnover-related taxes and sales
rebates and excluding sales turnover between undertakings within
the Purchased Businesses) but excluding turnover derived from the
Excluded Assets received by the CS Group in its 1997 financial
year and attributable to the Purchased Businesses did not exceed:
(i) Ecu 250 million in the European Union; or
(ii) Ecu 25 million in each of at least three
Member States of the European Union.
(b) Neither the Purchased Company nor the Subsidiaries
is a "United States issuer" and the Assets and the assets owned
by the Purchased Company and the Subsidiaries in each case
located in the United States (i) collectively do not have an
aggregate book value or market value of US $15 million or more
and (ii) collectively did not generate aggregate sales in or into
the United States of US $25 million or more in the most recent
fiscal year, all as defined under 16 CFR Section 801.1 et seq.
ARTICLE 3
KO REPRESENTATIONS AND WARRANTIES
KO represents and warrants to CS that as of the date hereof
and each Applicable Closing Date that:
3.01 CORPORATE ORGANIZATION. Each of the KO Parties is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization.
3.02 AUTHORIZATION, ETC. Each of the KO Parties has, or in
the case of the KO Parties other than KO shall have at the time
of execution and delivery of such documents, all requisite
corporate power and authority to execute and deliver this
Agreement and all documents to be executed and delivered by the
KO Parties contemplated hereby (collectively, the "Buyer
Transaction Documents," and together with the Seller Transaction
Documents, the "Transaction Documents") and to carry out their
respective obligations with respect to the transactions
contemplated hereby and thereby. The execution and delivery of
this Agreement and the Buyer Transaction Documents and the
consummation of the transactions contemplated hereby and thereby
have been, or in the case of the KO Parties other than KO shall
have been at the time of execution and delivery of such documents,
duly authorized by all necessary corporate action on the part of
each of the KO Parties. This Agreement has been (and the other
Buyer Transaction Documents will be at the Threshold Closing or a
Subsequent Closing, as applicable) duly and validly executed and
delivered by each of the KO Parties (assuming due authorization,
execution and delivery by the CS Parties of this Agreement and
the Transaction Documents to
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which it is a party) and this Agreement constitutes (and each of
the other Buyer Transaction Documents will constitute at the
Threshold Closing or a Subsequent Closing, as applicable) a valid
and binding agreement, enforceable against each of the KO Parties,
respectively, in accordance with its terms.
3.03 NO CONFLICT. Except as may be necessary as a result of
any facts or circumstances relating solely to the CS Parties, the
execution and delivery of this Agreement and the Buyer
Transaction Documents by the KO Parties, the consummation of the
transactions contemplated hereby and thereby by the KO Parties,
and the performance of the covenants and agreements of the KO
Parties contained herein and therein will not, with or without
the giving of notice or the lapse of time, or both (i) to the
knowledge of the KO Parties, require the KO Parties to make any
material filing or material registration with, or obtain any
material permit, material authorization, material consent or
material approval of, any Governmental Authority, except as set
forth in Schedule 3.03 and except for filings, notifications or
approvals required under any antitrust or competition laws, (ii)
violate or conflict with any provision of the certificate of
incorporation or bylaws (or similar governing documents) of any
of the KO Parties, (iii) in any material respect violate,
conflict with, or result in a breach or default under, or result
in the termination of, or cause the acceleration of the maturity
of any material debt or material obligation pursuant to, any term
or condition of any material mortgage, material indenture,
material contract, material license, material permit, material
instrument, material document or other material agreement,
material document or material instrument to which any of the KO
Parties is a party or by which any of the KO Parties or any of
their respective properties may be bound, or (iv) to the
knowledge of the KO Parties, except as set forth in Schedule 3.03
and except for filings, notifications or approvals required under
any antitrust or competition laws, violate any provision of any
material law, material judgment, material decree, material order,
material regulation or material rule of any Governmental
Authority or any arbitration award.
3.04 BROKERS AND FINDERS. No KO Party has employed any
broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the transactions
contemplated by this Agreement.
3.05 LITIGATION. As of the date hereof, there are no
pending, or to the knowledge of the KO Parties threatened,
litigation, claims, suits, actions, investigations, indictments,
information or proceedings which, if adversely determined, would
be reasonably expected to prevent or materially interfere with
the performance by the KO Parties of their respective obligations
hereunder.
ARTICLE 4
COVENANTS OF THE CS PARTIES
4.01 PRE-CLOSING OPERATIONS. Except to the extent not
reasonably practicable in light of this Agreement and the
transactions contemplated by this Agreement and the Transaction
Documents, CS covenants and agrees (and shall cause the other CS
Parties to comply with this covenant), except as specifically
consented to in writing by KO (which consent shall not be
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unreasonably withheld or delayed), that from the date of this
Agreement to each Applicable Closing Date, the Purchased
Businesses shall be operated and conducted only in the ordinary
course consistent with past practices, and shall carry on their
business in the same manner as currently conducted and not make
or institute any material new methods of manufacture, purchase,
sale, lease, management or operation. By way of illustration and
not in limitation of the foregoing, except to the extent not
reasonably practicable in light of this Agreement and the
transactions contemplated by this Agreement and the Transaction
Documents, CS agrees and shall cause the other CS Parties to
agree that from the date of this Agreement to each Applicable
Closing Date, except as set forth on Schedule 4.01 and except as
consented to in writing by KO (which consent shall not be
unreasonably withheld or delayed) as follows:
(a) Each of the Purchased Businesses shall manage its
working capital, including cash, receivables, other current
assets, trade payables and other current liabilities in a fashion
in all material respects consistent with past practice, including
without limitation by selling inventory and other property in an
orderly and prudent manner and paying outstanding obligations,
trade accounts and other indebtedness as they come due.
(b) Each of the Purchased Businesses shall maintain in
all material respects its assets, and the CS Parties shall
maintain in all material respects the Assets, in their present
state of repair, normal wear and tear excepted.
(c) Each of the Purchased Businesses shall use its
commercially reasonable efforts to keep available in all material
respects the services of its employees and to preserve in all
material respects the goodwill of its business and relationships
with its customers, licensors, suppliers, distributors and
brokers.
(d) Each of the Purchased Businesses shall continue in
all material respects advertising, promotional programs and
incentives in a manner consistent with past practices.
(e) The Purchased Businesses shall not make any
material loans or other material advances to any present or
former employees (including retirees), directors or independent
contractors (or their dependents, spouses or beneficiaries),
except in the ordinary course of business consistent with past
practice.
(f) The bottling agreements, distribution agreements
and other commercial arrangements entered into after the date of
this Agreement (including any amendments to existing agreements)
to which CS or any of its Affiliates or the Purchased
Businesses is a party and with respect to which it derives
revenues and profits from the businesses associated with the
Owned Trademarks in each country shall be on arms' length terms
and on terms which shall provide CS, its Affiliates and the
Purchased Businesses with benefits from such arrangements which
are consistent with the ordinary course of their beverages
business, recognizing that the terms of such agreements may need
to be different in launch markets, developing markets, etc. From
and after the date of this Agreement, none of CS or any of its
Affiliates or the Purchased Businesses will enter into any
agreements or arrangements or any amendments to any agreements or
arrangements pursuant to which the income stream associated
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with any Owned Trademarks in any country is shifted to any other
less than wholly owned entity or country or brand that is not
included in the transactions contemplated by this Agreement.
(g) None of the Purchased Businesses shall take any
action referred to in Section 2.22, and none of CS and the other
CS Parties, shall take any action referred to in Section 2.22
with respect to any of the Purchased Businesses.
4.02 ACCESS. From the date of this Agreement through each
Applicable Closing Date in respect of the relevant Purchased
Businesses, CS shall (and shall cause each of the other CS
Parties and the Purchased Businesses to) (i) provide each of the
KO Parties and its designees with such information as any of the
KO Parties may from time to time reasonably request with respect
to the Purchased Businesses and the transactions contemplated by
this Agreement, (ii) provide each of the KO Parties and its
designees, officers, counsel, accountants and other authorized
representatives reasonable access, upon reasonable notice, to the
books, records, offices, personnel, counsel and accountants of
the Purchased Businesses, as any of the KO Parties or its
designees may from time to time reasonably request, and (iii)
permit each of the KO Parties and its designees to make such
reasonable inspections thereof as any of the KO Parties may
reasonably request. No such investigation shall limit or modify
in any way the obligations of the CS Parties with respect to any
breach of t