Franchise Acquisition Agreement

EXECUTION COPY


FRANCHISE ACQUISITION AGREEMENT
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THIS AGREEMENT is executed and delivered this 29th day of September, 2000, by and among WVBC, INC., a Delaware corporation ("WVBC"), ROBC, INC., a Delaware corporation ("ROBC") (WVBC and ROBC are sometimes referred to herein collectively as the "Sellers" and individually as a "Seller"), and COCA-COLA ENTERPRISES INC., a Delaware corporation ("Enterprises").


IN CONSIDERATION of the representations, warranties, covenants and agreements contained in this Agreement, the parties, intending to be legally bound, hereby agree as follows:


1 ARTICLE


PURCHASE OF FRANCHISE ASSETS AND RIGHTS;LIABILITIES EXCLUDED AND
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ASSUMED
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1.1 Franchise Assets. At the Closing (as defined in Section 7.01), subject to the terms and conditions of this Agreement, Sellers shall sell, assign, convey, transfer, and deliver to Enterprises, and Enterprises shall purchase, accept and acquire from Sellers, the Franchise Assets (as defined below): The "Franchise Assets" shall consist collectively of all right, title and interest of Sellers in and to: (i) all licenses and contract rights incident thereto in connection with the Bottling Authorizations (as defined in Section 3.02(a)) listed in Disclosure Schedules 3.02(a) and (b); and (ii) all licenses and contract rights incident thereto in connection with the License Agreements (as defined in Section 3.02(c)) listed on Disclosure Schedule 3.02(c). Excluded Assets. Notwithstanding anything contained herein to the contrary, it is understood that all assets of Sellers other than the Franchise Assets are specifically excluded from transfer to Enterprises, including but not limited to: cash, cash equivalents, accounts receivable, bank accounts, partnership interests, marketable or other securities, commercial paper, all minute books, and all corporate, partnership, financial and income tax records not specifically included in the Franchise Assets (all such assets being hereinafter referred to collectively as the "Excluded Assets").


1.1 Excluded Liabilities.


1.2 (a) Except with respect to the Assumed Liabilities described in Section 1.04 hereof, or as otherwise expressly indicated elsewhere in this Agreement, Enterprises shall not assume, nor shall it agree to pay, perform or discharge any liability or obligation of any kind or nature whatsoever of Sellers (collectively, the "Excluded Liabilities"), including, without limitation,


(i) any liability for indebtedness of any Seller evidenced by bonds, debentures, notes or similar instruments or for the deferred purchase price of property;


(i) any liability to pay any Taxes of any Seller, regardless of whether the liability for such Taxes exists now or in the future, or in connection with the consummation of the transactions contemplated hereby or otherwise;


(i) any liability to pay the Taxes of any other person or entity (other than Sellers) because any Seller was a member of an affiliated group under Section 1504(a) of the Internal Revenue Code of 1986, as amended ("IRC") or any similar state tax provision;


(i) any liability or obligation with respect to the Excluded Assets;


(i) any obligation to indemnify any person by reason of the fact that such person was a director, officer, employee or agent of any Seller or was serving at the request of any Seller as a partner, trustee, director, officer, employee or agent of another entity;


(i) any liability (1) in the event of any claims brought by employees or former employees of any Seller claiming employment discrimination under state or federal law, or (2) from any labor disputes between any Seller and the labor unions representing its employees, including without limitation strikes or picketing, wherever they may occur;


(i) any liability with respect to any employment, collective bargaining or consulting contract, or deferred compensation, profit-sharing, pension, bonus, stock option, stock purchase or any other fringe benefit or compensation contract, commitment, arrangement or plan (whether written or oral) including each welfare plan (as defined in Section 3(1) of the Employee Retirement Security Act of 1974, as amended ("ERISA")), which any Seller has established or maintained or in which any Seller has had an obligation to make contributions or to pay benefits, for the benefit of persons who are, were, or will become in accordance with the terms of the plan, active employees, former employees, retirees, directors or independent contractors (or their descendants, spouses or beneficiaries) of any Seller or their predecessors in interest or any employer that would constitute an "ERISA Affiliate", which term will refer to all employers that by reason of common control are treated together with any Seller as a single employer within the meaning of IRC section 414;


(i) any liability for payments to employees of any Seller under the Worker Adjustment and Retraining Notification Act (the "WARN Act") or the Family and Medical Leave Act of 1993;


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(i) any liability for offering and providing COBRA continuation coverage prior to the Closing Date to any qualified beneficiary who is covered by a group health plan (where, for the purposes of this subsection 1.03(a)(ix), the terms "continuation coverage," "qualified beneficiary" and " group health plan" have the meanings given such terms under IRC section 4980B and ERISA section 601 et seq.);


(i) any liability arising on or before the Closing Date for commitments relating to the employment, relocation or termination of any employees of any Seller including, without limitation, accrued salary or severance pay;


(i) any liability for Sellers' costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby;


(i) any liability or obligation of Sellers arising or incurred after the Closing;


(i) any liability or obligation arising under the Franchise Assets on or prior to the Closing Date; and


(i) any liability of any Seller that becomes a liability of Enterprises under any common law doctrine of de facto merger or successor liability, or otherwise by operation of law).


(a) Sellers shall remain liable for, and shall discharge to the extent properly due and payable, all of the Excluded Liabilities with respect to which failure to so discharge would adversely affect Enterprises.


1.1 Assumed Liabilities.


1.2 (a) At the Closing, Enterprises shall assume only the liabilities and obligations of the Sellers under the Franchise Assets arising on or after the Closing Date (the "Assumed Liabilities").


(a) Enterprises shall be liable for, and shall discharge, when due, all of the Assumed Liabilities. (b) (c) Except as expressly set forth in this Section 1.04, Enterprises shall not assume or in any way be liable for any obligation or liability of any Seller, whether known or unknown, fixed or contingent, or incurred before or after the Closing. (d) (e)


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2 ARTICLE


THE PURCHASE PRICE
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1.1 Purchase Price. The purchase price for the Franchise Assets shall be $18,513,023 (the "Franchise Purchase Price"), paid at the Closing by wire transfer to the bank accounts set forth on Exhibit 2.01. 1.2 1.3 Allocation of Purchase Price. The Franchise Purchase Price shall be allocated for federal and state tax purposes in the manner specified in Exhibit 2.02 with such adjustments as may be mutually agreeable to Enterprises and Sellers. Each of the parties to this Agreement (a) acknowledges that such allocation complies with the requirements of Section 1060 of the IRC and the regulations promulgated thereunder and (b) shall file Form 8594 with its United States Federal Income Tax Return and any related or analogous filings required under any state laws, or otherwise, consistent with such allocation, for the tax year in which the Closing occurs. 1.4 1.5 1.6 1.7 1.8 1.9 1.10


2 ARTICLE


REPRESENTATIONS AND WARRANTIES CONCERNINGSELLERS
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As an inducement to the execution of this Agreement by Enterprises and the consummation of the transactions contemplated hereunder, Sellers, jointly and severally, hereby represent and warrant to Enterprises as follows as of the date of this Agreement and as of the Closing Date:


1.1 Organization and Authorization.


1.2 (a) Sellers are corporations duly organized, validly existing and in good standing under the laws of the State of Delaware. Each Seller is an indirect wholly owned subsidiary of Coca-Cola Bottling Co. Consolidated, a Delaware corporation ("Consolidated"). Each Seller was incorporated under Delaware law on November 23, 1993 and since that date neither Seller has engaged in any merger, consolidation, share exchange or other combination with any entity. The sole purpose of each Seller is now and has always been to hold the Bottling Authorizations and to license and grant interests therein to corporate affiliates of Consolidated pursuant to the License Agreements. Neither Seller has conducted any other business. (b)


(c) Each Seller has the full corporate power and authority to enter into this Agreement and all other agreements, documents and certificates contemplated or required of it hereby (collectively, the "Seller Documents") and to consummate the transactions contemplated


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under this Agreement and the Seller Documents. The execution and delivery of this Agreement and each Seller Document by Sellers and the consummation by each Seller of the transactions contemplated hereby and thereby have been duly approved by Sellers, and no corporate or other action on the part of any Seller or their shareholders is necessary to approve and authorize the execution and delivery of this Agreement and each Seller Document or the consummation of the transactions contemplated hereby or thereby. This Agreement and each Seller Document have been duly and validly executed and delivered by each Seller and constitute the valid and binding agreements of Sellers, enforceable against them in accordance with their respective terms. (d) (e) The execution and delivery of this Agreement and each Seller Document by Sellers and the consummation by Sellers of the transactions contemplated by this Agreement and the Seller Documents will not: (f)


(i) violate or conflict with any provision of the certificates of
incorporation or bylaws of any Seller;


(i) breach, violate or constitute an event of default (or an event that
with the lapse of time, or the giving of notice, or both, would
constitute an event of default) under or give rise to any right of
termination, cancellation, modification or acceleration under, any
note, bond, indenture mortgage, security agreement, lease, license,
franchise (excluding the Bottling Authorizations) collective bargaining
agreement or any other material agreement, instrument or obligation to
which any Seller is a party, or by which any Seller or any of their
properties or assets are bound;


(i) result in the creation of any lien, claim or encumbrance or other
right of any third party of any kind whatsoever upon the Franchise
Assets pursuant to the terms of any such instrument or obligation;


(i) violate or conflict with any Order or Law, where:


(A) "Order" means any award,
decision, injunction, judgment, order, ruling, subpoena or
verdict entered, issued or made or rendered by any
Governmental Authority or arbitrator;


(B) "Law" means any law, ordinance,
principle of common law, regulation, statute or treaty,
whether federal, state, local, municipal, foreign,
international or multinational; and


(C) "Governmental Authority" means
any court, tribunal or panel, and any government, government
agency, authority or regulatory body, whether federal, state,
local, municipal, foreign, international or multinational;


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(v) require, on the part of any
Seller, any filing or registration with, or permit, license,
exemption, consent, authorization or approval of, or the
giving of any notice to, any Governmental Authority, except
for the premerger notification requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act") and such filings, registrations,
permits, licenses, consents, authorizations or approvals
which, if not made or obtained, as the case may be, would not,
in the aggregate, have a material adverse effect on the
business, operations, properties, assets, financial condition,
results of operations or prospects of any Seller taken as a
whole.


1.1 Bottling Authorizations. 1.2 (a) To Sellers' knowledge, Sellers have in effect all authorizations from concentrate franchise companies to bottle, distribute and sell soft drink and other nonalcoholic beverage products of The Coca-Cola Company that are necessary for Sellers to conduct their respective businesses within the portions of the states of Ohio and Kentucky in which such distributions are made pursuant to the Master Bottle Contract between The Coca-Cola Company, a Delaware corporation ("The Coca-Cola Company") and Coca-Cola Bottling Works of Charleston, Inc., dated December 31, 1986; the Master Bottle Contract between The Coca-Cola Company and Coca-Cola Bottling Works of Charleston, Inc. (Huntington, WV Territory), dated December 31, 1986; and the Master Bottle Contract between The Coca-Cola Company and Lonesome Pine Coca-Cola Bottling Company dated January 27, 1989 (collectively, the "Territory"). As further clarification, the Territory's boundary will follow the Ohio and Kentucky state lines as they border the states of Virginia and West Virginia. All such authorizations within the Territory (the "Bottling Authorizations") are listed in Disclosure Schedule 3.02(a).


(a) All Bottling Authorizations giving Sellers the temporary right to sell soft drinks and other nonalcoholic beverage products in any portion of the Territory that is within the territory of another bottler that is not an affiliate of Consolidated are specifically identified in Disclosure Schedule 3.02(b). (b) (c) Sellers have made no assignment of any right or interest in the Bottling Authorizations other than to CCBCWV and CCBCR pursuant to the license agreements (the "License Agreements") which are listed on Disclosure Schedule 3.02(c).


1.1 Taxes. 1.2 (a) All Taxes, deposits or other payments or withholdings for which any Seller has any liability under any Law through the date of this Agreement and at the Closing Date (whether or not shown on any Return) have either been paid in full, or will be paid on or before the date that such Taxes are due to be paid (including any extensions thereof).


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(a) All Returns of any Seller that are due to have been filed in accordance with any Law have been filed, and all such Returns are correct and complete in all material respects. (b) (c) For purposes of this Agreement: (d)


(i) "Taxes" means all taxes, assessments, charges, duties, fees,
levies or other governmental charges, including federal, state, city,
county, parish, foreign or other income, franchise, capital stock, real
property, personal property, tangible, withholding, social security (or
similar), unemployment compensation, disability, environmental
(including taxes under section 59A of the IRC), transfer, sales, soft
drink, use, excise, gross receipts, alternative or add-on-minimum,
estimated and all other taxes of any kind for which any Seller may have
any liability imposed by any Governmental Authority (including
interest, penalties or additions associated therewith), and including
any transferee or secondary liability in respect of any tax (whether
imposed by law, contractual agreement or otherwise) and any liability
in respect of any tax as a result of being a member of any affiliated,
consolidated, combined, unitary or similar group and shall include all
liabilities of any Seller under any unclaimed property Law applicable
to such Seller; and


(i) "Returns" means all returns, declarations, reports, statements,
claims for refunds, estimated returns or reports, and other documents
required to be filed in respect of Taxes, including any amendments or
supplements to any of the foregoing.


1.1 Judgments, etc.. There are no judgments, orders, injunctions, decrees, stipulations or awards (whether rendered by a court, administrative agency, or by arbitration, pursuant to a grievance or other procedure) affecting the Franchise Assets or Sellers' operations that are, or will become upon consummation of the transactions contemplated by th ...