TABLE OF CONTENTS

Execution Copy

Exhibit 10.35

 

 

 

 

 

 

 

 

 

 

 

 

LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF
COCA-COLA BOTTLERS’ SALES & SERVICES COMPANY LLC

 

 

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ARTICLE I

 

DEFINED TERMS

1

 

 

 

 

 

 

 

 

Section 1.1

 

Definitions

1

 

 

Section 1.2

 

Headings

6

 

 

 

 

 

 

ARTICLE II

 

FORMATION AND TERM

6

 

 

 

 

 

 

 

 

Section 2.1

 

Formation

6

 

 

Section 2.2

 

Name

8

 

 

Section 2.3

 

Term

8

 

 

Section 2.4

 

Registered Agent and Office

8

 

 

Section 2.5

 

Principal Place of Business

8

 

 

Section 2.6

 

Qualification in Other Jurisdictions

8

 

 

 

 

 

 

ARTICLE III

 

PURPOSE AND ACTIVITIES OF THE COMPANY

9

 

 

 

 

 

 

 

 

Section 3.1

 

Purpose

9

 

 

Section 3.2

 

Support of The Coca-Cola Company

9

 

 

Section 3.3

 

Activities of the Company

9

 

 

Section 3.4

 

Participation by Members

11

 

 

Section 3.5

 

Non-Involvement in Certain Activities

11

 

 

Section 3.6

 

Powers of the Company

12

 

 

Section 3.7

 

Procurement Pricing and Administrative Costs

13

 

 

 

 

 

 

ARTICLE IV

 

CAPITAL CONTRIBUTIONS, CAPITAL ACCOUNTS AND
ADVANCES

14

 

 

 

 

 

 

 

 

Section 4.1

 

Initial Capital Contributions

14

 

 

Section 4.2

 

No Additional Capital Contributions

14

 

 

Section 4.3

 

Personal Property

14

 

 

Section 4.4

 

Capital Accounts

14

 

 

Section 4.5

 

Advances; Consequences of Nonrecourse Loans

15

 

 

 

 

 

 

ARTICLE V

 

MEMBERS

16

 

 

 

 

 

 

 

 

Section 5.1

 

Powers of Members

16

 

 

Section 5.2

 

Reimbursements

16

 

 

Section 5.3

 

Partition

16

 

 

Section 5.4

 

Resignation; Disqualification

16

 

 

Section 5.5

 

Meetings of Members; Voting by Members

17

 

 

 

 

 

 

ARTICLE VI

 

MANAGEMENT

18

 

 

 

 

 

 

 

 

Section 6.1

 

Board of Directors

18

 

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Section 6.2

 

Meetings of the Board

21

 

 

Section 6.3

 

Quorum and Acts of the Board and of Committees

22

 

 

Section 6.4

 

Electronic Communications

22

 

 

Section 6.5

 

Committees

22

 

 

Section 6.6

 

Expenses

23

 

 

Section 6.7

 

Removal, Resignation and Automatic Disqualification of Directors

23

 

 

Section 6.8

 

Directors as Agents

24

 

 

Section 6.9

 

Actions Requiring A Director Regular Vote

24

 

 

Section 6.10

 

Actions Requiring A Director Extraordinary Vote

26

 

 

 

 

 

 

ARTICLE VII

 

OFFICERS

27

 

 

 

 

 

 

 

 

Section 7.1

 

Officers

27

 

 

Section 7.2

 

The Chairman of the Board

27

 

 

Section 7.3

 

The President

27

 

 

Section 7.4

 

The Vice President

27

 

 

Section 7.5

 

The Secretary

28

 

 

Section 7.6

 

The Treasurer

28

 

 

Section 7.7

 

Officers as Agents

28

 

 

Section 7.8

 

Duties of Directors and Officers

28

 

 

 

 

 

 

ARTICLE VIII

 

ALLOCATIONS

28

 

 

 

 

 

 

 

 

Section 8.1

 

Profits and Losses

28

 

 

Section 8.2

 

Allocation Rules

28

 

 

Section 8.3

 

Tax Allocations

29

 

 

Section 8.4

 

Section 754 Election

29

 

 

 

 

 

 

ARTICLE IX

 

DISTRIBUTIONS

30

 

 

 

 

 

 

 

 

Section 9.1

 

Net Cash Flow

30

 

 

Section 9.2

 

Distribution Rules

30

 

 

Section 9.3

 

Limitations on Distribution

30

 

 

Section 9.4

 

Distribution of the Tax Amount

30

 

 

 

 

 

 

ARTICLE X

 

BOOKS AND RECORDS

31

 

 

 

 

 

 

 

 

Section 10.1

 

Books, Records and Financial Statements

31

 

 

Section 10.2

 

Accounting Method

31

 

 

Section 10.3

 

Financial Statements

31

 

 

 

 

 

 

ARTICLE XI

 

TAX MATTERS

32

 

 

 

 

 

 

 

 

Section 11.1

 

Tax Matters Partner

32

 

 

Section 11.2

 

Taxation as Partnership

32

 

 

Section 11.3

 

Potential Conversion to Taxable Corporation Status

32

 

 

 

 

 

 

ARTICLE XII

 

LIABILITY, EXCULPATION, INDEMNIFICATION AND OTHER

 

 

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BUSINESSES AND BUSINESS OPPORTUNITIES

32

 

 

 

 

 

 

 

 

Section 12.1

 

Liability

32

 

 

Section 12.2

 

Exculpation

32

 

 

Section 12.3

 

Fiduciary Duty

33

 

 

Section 12.4

 

Indemnification of a Covered Person

33

 

 

Section 12.5

 

Expenses of a Covered Person

33

 

 

Section 12.6

 

Insurance

33

 

 

Section 12.7

 

Indemnification of Certain State Tax Return Preparation and Audit Expenses

34

 

 

Section 12.8

 

Business Activity That Does Not Compete with the Company and Business
Opportunities

34

 

 

 

 

 

 

ARTICLE XIII

 

ADDITIONAL MEMBERS

35

 

 

 

 

 

 

 

 

Section 13.1

 

Admission

35

 

 

Section 13.2

 

Allocations

35

 

 

 

 

 

 

ARTICLE XIV

 

TRANSFER OF INTERESTS AND SUBSTITUTE MEMBERS

36

 

 

 

 

 

 

 

 

Section 14.1

 

Transfers of Interests

36

 

 

Section 14.2

 

Substitute Members

38

 

 

Section 14.3

 

Recognition of Transfer by Company

38

 

 

Section 14.4

 

Effective Date of Transfer

39

 

 

Section 14.5

 

Pledge

39

 

 

 

 

 

 

ARTICLE XV

 

DISSOLUTION, LIQUIDATION AND TERMINATION

39

 

 

 

 

 

 

 

 

Section 15.1

 

No Dissolution

39

 

 

Section 15.2

 

Events Causing Dissolution

39

 

 

Section 15.3

 

Liquidation

39

 

 

Section 15.4

 

Termination

40

 

 

Section 15.5

 

Claims of the Members

40

 

 

 

 

 

 

ARTICLE XVI

 

MISCELLANEOUS

40

 

 

 

 

 

 

 

 

Section 16.1

 

Notices

40

 

 

Section 16.2

 

Failure to Pursue Remedies

41

 

 

Section 16.3

 

Cumulative Remedies

41

 

 

Section 16.4

 

Binding Effect

41

 

 

Section 16.5

 

Interpretation

41

 

 

Section 16.6

 

Severability

41

 

 

Section 16.7

 

Counterparts

41

 

 

Section 16.8

 

Integration

41

 

 

Section 16.9

 

Governing Law

41

 

 

Section 16.10

 

Amendments

41

 

 

Section 16.11

 

No Implied Rights or Remedies

42

 

 

Section 16.12

 

Confidentiality

42

 

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Section 16.13

 

Arbitration

43

 

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TRANSFER RESTRICTIONS

The Membership Interests in Coca-Cola Bottlers’ Sales & Services Company LLC
created and issued under this Agreement (the “Membership Interests”) are subject
to the restrictions on transfer and other terms and conditions set forth in this
Agreement.

The Membership Interests have been acquired for investment and have not been
registered under (a) the securities laws of the State of Delaware, (b) any other
state securities laws, or (c) the United States Securities Act of 1933, as
amended (the “Securities Act”).

Neither the Membership Interests nor any part thereof may be offered for sale,
pledged, hypothecated, sold, assigned, or transferred except in compliance with
the terms and conditions of this Agreement and

(1)     pursuant to an effective registration statement under the securities
laws of the State of Delaware or in a transaction which either is exempt from
registration under such laws or is otherwise in compliance with such laws,  

(2)     pursuant to an effective registration statement under any other
applicable state securities laws or in a transaction which either is exempt from
registration under any such laws or is otherwise in compliance with such laws,
and 

(3)     pursuant to an effective registration statement under the Securities Act
or in a transaction which either is exempt from registration under the
Securities Act or is otherwise in compliance with the Securities Act.

FOR ALABAMA RESIDENTS ONLY

THESE MEMBERSHIP INTERESTS ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
THE ALABAMA SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO THESE
MEMBERSHIP INTERESTS HAS NOT BEEN FILED WITH THE ALABAMA SECURITIES COMMISSION.
THE COMMISSION DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY MEMBERSHIP
INTERESTS, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF THIS DISCLOSURE
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

FOR ALASKA RESIDENTS ONLY

 

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THESE SECURITIES ARE NOT REGISTERED UNDER THE ALASKA SECURITIES ACT OF 1959, AS
AMENDED, AND CANNOT BE RESOLD WITHOUT REGISTRATION UNDER THE ALASKA SECURITIES
ACT OF 1959, AS AMENDED, OR EXEMPTION FROM IT.

CALIFORNIA

THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS OFFERING HAVE NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102, OR 25105
OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS OFFERING
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE
SALE IS SO EXEMPT. THE UNITS IN THE COMPANY ARE BEING OFFERED ON THE BASIS OF
SUCH EXEMPTION.

CONNECTICUT

THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER SECTION 36B-16 OF THE
CONNECTICUT UNIFORM SECURITIES ACT AND, THEREFORE, CANNOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED
PURSUANT TO THE SECURITIES ACT OR THE CONNECTICUT UNIFORM SECURITIES ACT, IF
SUCH REGISTRATION IS REQUIRED, OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.

GEORGIA

THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON, AMONG OTHER
EXEMPTIONS, PARAGRAPH (13) OF CODE SECTION 10-5-9 OF THE “GEORGIA SECURITIES ACT
OF 1973,” AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS
EXEMPT UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT.

FOR ILLINOIS RESIDENTS ONLY

THESE MEMBERSHIPS INTERESTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECRETARY OF STATE OF ILLINOIS OR THE STATE OF ILLINOIS, NOR HAS THE SECRETARY
OF STATE OF ILLINOIS OR THE STATE OF ILLINOIS PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS DISCLOSURE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

FOR INDIANA RESIDENTS ONLY

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 23-2-1-3 OF THE INDIANA
CODE (1982 ED.), AS AMENDED, AND IS SUBJECT TO THE RESTRICTIONS ON
TRANSFERABILITY AND SALE OF THE SECURITIES SET FORTHE IN THE LIMITED LIABILITY
COMPANY OPERATING AGREEMENT OF COCA COLA BOTTLERS’ SALES AND SERVICES COMPANY
LLC.

 

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FOR NORTH CAROLINA RESIDENTS ONLY

THESE MEMBERSHIP INTERESTS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISK OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.

FOR PENNSYLVANIA RESIDENTS ONLY

IF YOU HAVE ACCEPTED AN OFFER TO PURCHASE THESE MEMBERSHIP INTERESTS AND HAVE
RECEIVED A WRITTEN NOTICE EXPLAINING YOUR RIGHT TO WITHDRAW YOUR ACCEPTANCE
PURSUANT TO SECTION 207(M)(2) OF THE PENNSYLVANIA SECURITIES ACT OF 1972, YOU
MAY ELECT, WITHIN TWO BUSINESS DAYS FROM THE DATE OF RECEIPT BY THE ISSUER OF
YOUR BINDING CONTRACT OF PURCHASE OR, IN THE CASE OF A TRANSACTION IN WHICH
THERE IS NO BINDING CONTRACT OF PURCHASE, WITHIN TWO BUSINESS DAYS AFTER YOU
MAKE THE INITIAL PAYMENT FOR THE MEMBERSHIP INTERESTS BEING OFFERED, TO WITHDRAW
YOUR ACCEPTANCE AND RECEIVE A FULL REFUND OF ALL MONIES PAID BY YOU. YOUR
WITHDRAWAL OF ACCEPTANCE WILL BE WITHOUT ANY FUTHER LIABILITY TO ANY PERSON. TO
ACCOMPLISH THIS WITHDRAWAL, YOU NEED ONLY TO SEND A WRITTEN NOTICE (INCLUDING A
NOTICE BY FACSIMILE OR ELECTRONIC MAIL) TO THE ISSUER INDICATING YOUR INTENTION
TO WITHDRAW.

FOR SOUTH CAROLINA RESIDENTS ONLY

THESE MEMBERSHIP INTERESTS ARE OFFERED PURSUANT TO A CLAIM OF EXEMPTION UNDER
THE SOUTH CAROLINA UNIFORM SECURITIES ACT. A REGISTRATION STATEMENT RELATING TO
THESE MEMBERSHIP INTERESTS HAS NOT BEEN FILED WITH THE SOUTH CAROLINA SECURITIES
COMMISSIONER. THE COMMISSIONER DOES NOT RECOMMEND OR ENDORSE THE PURCHASE OF ANY
SECURITIES, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF THIS
DISCLOSURE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

FOR SOUTH DAKOTA RESIDENTS ONLY

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OF THE DISCLOSURE DOCUMENT OR PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

FOR TENNESSEE RESIDENTS ONLY

IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF
THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED.

 

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TEXAS

THE MEMBERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE TEXAS SECURITIES ACT
OF 1957 OR ANY OTHER SECURITIES ACT AND MAY NOT BE RESOLD OR TRANSFERRED EXCEPT
IN A TRANSACTION THAT IS EXEMPT UNDER THAT ACT OR PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THAT ACT OR IN A TRANSACTION THAT IS OTHERWISE IN
COMPLIANCE WITH THAT ACT.

FOR KANSAS, MAINE, NEW MEXICO, NORTH DAKOTA, OKLAHOMA, VIRGINIA AND WASHINGTON
RESIDENTS ONLY

THESE SECURITIES WILL BE SOLD ONLY TO ACCREDITED INVESTORS. NO MONEY OR OTHER
CONSIDERATION WILL BE SOLICITATED OR ACCEPTED BY MEANS OF A GENERAL
ANNOUNCEMENT. THESE SECURITIES HAVE NOT BEEN REGISTERED OR APPROVED BY THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER STATE AGENCY AND
ARE BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM REGISTRATION.

 

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LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF

COCA-COLA BOTTLERS’ SALES & SERVICES COMPANY LLC

_______________

This Limited Liability Company Operating Agreement of Coca-Cola Bottlers’ Sales
& Services Company LLC (the “Company”) is made as of January 1, 2003, among all
Coca-Cola Bottlers doing business in the United States that execute and deliver
this Agreement (the “Members”) in accordance with its terms.

The Members desire to form a limited liability company pursuant to the Delaware
Limited Liability Company Act, 6 Del. C. § 18-101, et seq., as amended from time
to time (the “Delaware Act”) based upon the statement of principles attached
hereto as Exhibit A. To that end, the Certificate of Formation of the Company
has been filed with the office of the Secretary of State of the State of
Delaware. Nonetheless, for all purposes hereof, the Company will not commence
operations unless and until this Agreement is executed on or before December 31,
2002 by Coca-Cola Bottlers that hold at least ninety percent (90%) of what the
Percentage Interests would be if all Coca-Cola Bottlers executed and delivered
this Agreement and became Members.

NOW, THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and intending to be legally bound,
the Members hereby agree as follows:

ARTICLE I

DEFINED TERMS

Section 1.1     Definitions. Unless the context otherwise requires, the terms
defined in this Article I shall, for the purposes of this Agreement, have the
meanings herein specified.

“Additional Members” has the meaning set forth in Section 13.1.

“Affiliate” means with respect to a specified Person, any Person that directly
or indirectly controls, is controlled by, or is under common control with, the
specified Person. As used in this definition, the term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of all or substantially all of the management and policies of a
Person, or to manage the sale of one or more products trademarked by or licensed
to The Coca-Cola Company in a Territory, whether through ownership of voting
securities, by contract (including a management contract), joint venture, or
otherwise. No Person shall be deemed to be an Affiliate of another Person merely
because of the relationship of a Coca-Cola franchise between such Persons. A
Person becomes a “controlled Affiliate” when control of such Person is directly
or indirectly acquired by another Person through stock purchase, merger,
consolidation or otherwise.

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“Agreement” means this Limited Liability Company Operating Agreement of the
Company, as amended, modified, supplemented or restated from time to time.

“Allocated Interest” has the meaning set forth in Section 2.1(iii).

“Board” means the committee of the Company established pursuant to Section 6.1.

“Capital Account” means, with respect to any Member, the account maintained for
such Member in accordance with the provisions of Section 4.4.

“Capital Contribution” means, with respect to any Member, the aggregate amount
of money and the fair market value of any property (other than money)
contributed to the Company with respect to such Member’s Interest pursuant to
Section 4.1 or, with respect to an Additional Member, Section 4.2.

“Certificate” means the Certificate of Formation of the Company and any and all
amendments thereto and restatements thereof filed on behalf of the Company with
the office of the Secretary of State of the State of Delaware pursuant to the
Delaware Act.

“Coca-Cola Bottler” or “Bottler” means CCE and each other business entity that
is not an Affiliate of CCE and that holds a Coca-Cola franchise applicable to
one or more Territories within the United States. For purposes of this
Agreement, all entities that hold Coca-Cola franchises and that are related to
one another by meeting the definition of an Affiliate herein shall be deemed to
constitute a single Coca-Cola Bottler. In no event, however, shall The Coca-Cola
Company, or any Affiliate of The Coca-Cola Company, be deemed a Coca-Cola
Bottler hereunder, and any Member that hereafter becomes Affiliated with The
Coca-Cola Company shall thereupon cease to be qualified as a Member. With
respect to any Territory in which the Coca-Cola franchise is held by a
first-line bottler, but such Territory is operated by a sub-bottler or second
line-bottler, the sub-bottler or second-line bottler and not the first-line
bottler shall be deemed the Coca-Cola Bottler for that Territory hereunder. A
list of all Coca-Cola Bottlers as of October 31, 2002 is attached hereto as
Exhibit B.

“Coca-Cola bottling system” means the system through which beverages bearing
trademarks owned by or licensed to The Coca-Cola Company are manufactured and
distributed.

“Coca-Cola Enterprises Inc.” or “CCE” means Coca-Cola Enterprises Inc., a
Delaware corporation, and any successor to substantially all of its business and
operations.

“Coca-Cola franchise” means the contract and trademark license authorizing a
Person to bottle and sell one or more products bearing the trademark “Coca-Cola”
or one of its derivatives in a Territory.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or
any corresponding federal statutory income tax enacted after the date of this
Agreement. A reference to a specific section (§) of the Code refers not only to
such specific section but also to any

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corresponding provision of any Code, as such specific section or corresponding
provision is in effect on the date of application of the provisions of this
Agreement containing such reference.

“Company” means Coca-Cola Bottlers’ Sales & Services Company LLC, the limited
liability company formed and continued under and pursuant to the Delaware Act
and this Agreement.

“Covered Person” means a Member, a Director, an Officer, a Manager, any
Affiliate of a Member, a Director, an Officer or a Manager, any officers,
directors, shareholders, partners, employees, representatives or agents of a
Member, a Director, an Officer or a Manager, or their respective Affiliates, or
any employee or agent of the Company or its Affiliates.

“Delaware Act” has the meaning set forth in the recitals.

“Director” means a natural person designated as a director of the Company
pursuant to Section 6.1; “Directors” means two or more of such natural persons.
There will be three classes of Directors: National Bottler Directors, Regional
Bottler Directors and Mainstream Bottler Directors.

“Director Extraordinary Vote” means the affirmative vote of not less than eighty
percent (80%) of the total votes that may be cast at the time by the whole
Board, voting in person or by proxy.

“Director Regular Vote” means the affirmative vote of not less than sixty-six
and two-thirds percent (66 2/3%) of the total votes that may be cast at the time
by the whole Board, voting in person or by proxy.

“Direct Store Delivery” or “DSD” means the traditional distribution system used
by carbonated soft drink bottlers in the United States, including Coca-Cola
bottlers, for the delivery of carbonated soft drink products by bottler-owned
vehicles and bottler employees to customer retail stores and bottler
merchandising of the products within the retail stores.

“Fiscal Year” means (i) the period commencing upon the formation of the Company
and ending on December 31, 2002, (ii) any subsequent twelve (12) month period
commencing on January 1 and ending on December 31, or (iii) any portion of the
period described in Clause (ii) of this sentence for which the Company is
required to allocate Profits, Losses and other items of Company income, gain,
loss or deduction pursuant to Article VIII hereof.

“Interest” means a Member’s limited liability company ownership interest in the
Company which represents such Member’s share of the profits and losses of the
Company and a Member’s right to receive distributions of the Company’s assets in
accordance with the provisions of this Agreement and the Delaware Act. A
Member’s Interest shall be reflected as a number of Units.

“Large Regional Bottler” means any Regional Bottler which is hereafter
determined to have at least 12.5% of the Sales Volume in accordance with Section
6.1.

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“Laws” means:

(i)        all constitutions, treaties, laws, statutes, codes, ordinances,
orders, decrees, rules, regulations and municipal by-laws, whether domestic,
foreign or international;

(ii)       all judgments, orders, writs, injunctions, decisions, rulings,
decrees and awards of any governmental body;

(iii)     all policies, practices and guidelines of any governmental body; and

(iv)      any amendment, modification, re-enactment, restatement or extension of
the foregoing,

in each case binding on or affecting the party or Person referred to in the
context in which such word is used; and “Law” shall mean any one of them.

“Mainstream Bottlers” means all Members other than CCE, the Regional Bottlers
and their respective Affiliates.

“Mainstream Bottler Directors” means the Directors to be appointed by Mainstream
Bottlers pursuant to Section 6.1.

“Manager” means each Director.

“Member” means, subject to Sections 2.1(ii), 5.4 and 6.10, Article XIV hereof
and any other event which disqualifies a Person from being a Member hereunder,
each of the Coca-Cola Bottlers that executes this Agreement on or before
December 31, 2002 and also includes any Coca-Cola Bottler admitted as an
Additional Member or a Substitute Member pursuant to the provisions of this
Agreement, in such Coca-Cola Bottler’s capacity as a member of the Company, and
“Members” means two (2) or more of such Coca-Cola Bottlers when acting in their
capacities as members of the Company. Except for purposes of electing Directors
as provided in Section 6.1, the Members shall constitute one (1) class or group
of members.

“National Bottler Directors” means the Directors to be appointed by CCE pursuant
to Section 6.1.

“Net Cash Flow” means, for each Fiscal Year or other period of the Company, the
gross cash receipts of the Company from all sources, but excluding any amounts,
such as gross receipts taxes, that are held by the Company as a collection agent
or in trust for others or that are otherwise not unconditionally available to
the Company, less all amounts paid by or for the account of the Company during
the same Fiscal Year or other period (including, without limitation, payments of
principal and interest on any Company indebtedness and expenses reimbursed to
the Members under Section 5.2), and less any amounts determined by the Board to
be necessary to provide a reasonable reserve for working-capital needs or any
other contingencies of the Company. Net Cash Flow shall not be reduced by
depreciation, amortization, cost

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recovery deductions, depletion, similar allowances or other non-cash items, but
shall be increased by any reduction of reserves to Net Cash Flow previously
established.

“Officer” means a natural person designated as an officer of the Company.

“Percentage Interest” means the Interest of a Member, expressed as a portion of
one hundred percent, determined by the proportion of the Units owned by such
Member to the total number of Units issued and outstanding; “Percentage
Interests” shall mean the Percentage Interest of two or more Members.

“Person” includes any individual, corporation, association, partnership (general
or limited), joint venture, trust, estate, limited liability company, or other
legal entity or organization.

“President” means the Person appointed by the Board as the president of the
Company, who shall perform the duties described in Section 7.3.

“Procurement Policies” means the policies of the Company governing the
procurement of goods and services by the Procurement Division, as established by
the Board. The Procurement Policies shall be established from time to time by a
Director Regular Vote and shall address and take into account or allow for
decisions by the Procurement Division to consider price equalization on a
commodity-by-commodity basis made on a basis similar to current practices of The
Coca-Cola Bottlers’ Association. The Procurement Policies will take into
consideration the quality, service, financial condition and stability of
particular suppliers.

“Profits” and “Losses” means, for each Fiscal Year, an amount equal to the
Company’s taxable income or loss for such Fiscal Year, determined in accordance
with § 703(a) of the Code.

“Regional Bottler” shall mean the largest Members, excluding CCE and its
Affiliates, based on Sales Volume during the three calendar year period ending
immediately prior to the year in which the classification of Members as Regional
Bottlers or Mainstream Bottlers is to be made pursuant to Section 6.1. There
will be six (6) Regional Bottlers unless (a) the number of Regional Bottler
Directors is increased pursuant to Section 6.1(iv), in which event there will be
a like increase in the number of Regional Bottlers; or (b) one or more of the
Regional Bottlers become a Large Regional Bottler, in which event the number of
Regional Bottlers will decrease by one for each Large Regional Bottler. The
initial Regional Bottlers are designated as such on Exhibit D hereto. There are
no Large Regional Bottlers on the date as of which this Agreement is made. If
two or more Regional Bottlers become Affiliated with each other, or if one or
more Regional Bottlers becomes Affiliated with CCE or The Coca-Cola Company, the
Regional Bottler or Bottlers that are controlled Affiliates shall thereupon
cease to be qualified as Regional Bottlers.

“Regional Bottler Directors” shall mean the Directors to be appointed by
Regional Bottlers pursuant to Section 6.1.

 

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“Sales Volume” means, for a given period of time, a Member’s share (expressed as
a percentage) of the total volume of Member sales, measured in equivalent cases,
of bottle/can products bearing trademarks owned by or licensed to The Coca-Cola
Company, including brands other than Coca-Cola, but excluding cross-licensed
brands and fountain sales.

“Secretary” means the Person appointed by the Board as the secretary of the
Company, who shall perform the duties described in Section 7.5.

“Substitute Member” means a Coca-Cola Bottler that is admitted to the Company as
a Member pursuant to Section 14.2.

“Tax Amount” has the meaning set forth in Section 9.4.

“Tax Matters Partner” has the meaning set forth in Section 11.1.

“Territory” means a defined geographic area of the United States in which a
Coca-Cola Bottler is authorized to bottle and sell one or more products bearing
the trademark “Coca-Cola” or one of its derivatives.

“The Coca-Cola Bottlers’ Association” means The Coca-Cola Bottlers’ Association,
a Georgia non profit corporation.

“The Coca-Cola Company” means The Coca-Cola Company, a Delaware corporation, and
any successor to substantially all of its business and operations, and its
Affiliates.

“Treasury Regulations” means the income tax regulations, including temporary
regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

“Unit” means the unit of measure of a Member’s Interest determined in accordance
with Section 2.1(iii). A Unit held by a Member shall also include such Member’s
rights as a “member” under the Delaware Act, as modified by this Agreement, but
a Unit held by a transferee that does not become a Substitute Member pursuant to
Section 14.2 does not include rights as a “member” under the Delaware Act or
this Agreement. The Board may, but it is not obligated to, authorize the
issuance of certificates to represent the ownership of Units.

Section 1.2     Headings. The headings and subheadings in this Agreement are
included for convenience and identification only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.

ARTICLE II

FORMATION AND TERM

Section 2.1     Formation.

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(i)     The Members hereby form the Company as a limited liability company under
and pursuant to the provisions of the Delaware Act and agree that the rights,
duties and liabilities of the Members shall be as provided in the Delaware Act,
except as otherwise provided herein.

(ii)    A Coca-Cola Bottler shall be admitted as a Member of the Company if on
or before December 31, 2002:

(a)         such Bottler executes and delivers this Agreement or a counterpart
of this Agreement; and

(b)        this Agreement is executed and delivered by Coca-Cola Bottlers that
hold at least ninety percent (90%) of the total potential number of Units that
would be issued by the Company if all Coca-Cola Bottlers were Members.

Membership in the Company is voluntary. Whether to participate in either or both
of the Distribution Division and the Procurement Division, which are
contemplated by Section 3.3, is also voluntary. However, if a Coca-Cola Bottler
does become a Member, the obligations set forth in Section 3.4 and the
restrictions set forth in Section 12.8 will nonetheless be applicable to such
Member to the extent and subject to the limitations set forth therein,
regardless of whether it elects to participate in either the Distribution
Division or the Procurement Division.

(iii)    Each Member as of January 1, 2003 shall be entitled to acquire that
portion of the total number of Units to be issued to the initial Members that
corresponds to the arithmetic average of (a) such Member’s share (expressed as a
percentage) of total volume of initial Member sales, measured in equivalent
cases, of bottle/can products bearing trademarks owned by or licensed to The
Coca-Cola Company (including brands other than Coca-Cola, but excluding
cross-licensed brands and fountain sales) and (b) the percentage of U. S.
population in such Member’s Territory compared to the total U.S. population in
the Territories of all initial Members, as reflected in the records of The
Coca-Cola Company, during the most recent available period (“Allocated
Interest”). In the event that the records of The Coca-Cola Company are not
available or a Member contends that those records are insufficient to reliably
determine the Allocated Interest of that Member, the President shall determine
the Allocated Interest of such Member by estimate using the most reliable
methodology available, in his judgment, including information provided to the
President by the Member. If a Member does not object to its proposed Allocated
Interest within 15 days of being advised of it, the Member shall be deemed to
have accepted the Allocated Interest proposed. If the Member does object in a
timely way, and the Member and the President are unable to agree upon the
Member’s Allocated Interest within 30 days after the Member first objects to the
Allocated Interest proposed for it, the parties shall promptly refer the issue
of the appropriate amount of the Member’s Allocated Interest to The Coca-Cola
Bottlers’ Association, whose determination shall be final and binding on the
parties and not subject to further appeal. The Member in question and the
Company shall cooperate in connection therewith and

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shall submit to The Coca-Cola Bottlers’ Association all information requested by
it to permit The Coca-Cola Bottlers’ Association to make a determination in a
timely way.

(iv)   The name, mailing address, telephone number and telecopier number of each
Member, the agreed value of the amount contributed to the capital of the Company
by each Member, the nature of each Member’s capital contribution, and the number
of Units to be issued to each Member shall be recorded on a Schedule to be
compiled by the Secretary. The Secretary shall be required to update such
Schedule from time to time as necessary to reflect accurately the information
therein, including adjustments due to resignations or the admission of
Additional Members or Substitute Members and permitted transfers of Units. The
first such Schedule shall be made as of January 1, 2003 and shall be completed
and distributed to the Members not later than January 31, 2003, with respect to
the Members as of January 1, 2003 to reflect the Coca-Cola Bottlers who have
elected to become Members. Any amendment or revision to the Schedule made in
accordance with this Agreement shall not be deemed an amendment to this
Agreement requiring approval as provided in Section 16.10. Any reference in this
Agreement to the Schedule shall be deemed to be a reference to the Schedule as
amended and in effect from time to time.

(v)    E. Liston Bishop, III, as an authorized person within the meaning of the
Delaware Act, executed, delivered and filed the Certificate.

Section 2.2     Name. The name of the Company formed hereby is Coca-Cola
Bottlers’ Sales & Services Company LLC. The business of the Company may be
conducted upon compliance with all applicable Laws under any other name
designated by the Board.

Section 2.3     Term. The term of the Company shall commence on the date the
Certificate was filed in the office of the Secretary of State of the State of
Delaware and shall continue in perpetuity unless the Company is dissolved in
accordance with the provisions of this Agreement. The existence of the Company
as a separate legal entity shall continue until cancellation of the Certificate
in the manner required by the Delaware Act.

Section 2.4     Registered Agent and Office. The Company’s registered agent and
office in the State of Delaware shall be c/o Corporation Service Company, 2711
Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808. At
any time, the Board may designate another registered agent and/or registered
office.

Section 2.5     Principal Place of Business. The principal place of business of
the Company shall be in Atlanta, Georgia, USA. At any time, the Board may change
the location of the Company’s principal place of business to another location.

Section 2.6     Qualification in Other Jurisdictions. The Board shall cause the
Company to be qualified, formed or registered under assumed or fictitious name
statutes or similar Laws in any jurisdiction in which the Company transacts
business. The Secretary, as an authorized person within the meaning of the
Delaware Act, shall execute, deliver and file any certificates

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(and any amendments and/or restatements thereof) necessary for the Company to
qualify to do business in a jurisdiction in which the Company may wish to
conduct business.

ARTICLE III

PURPOSE AND ACTIVITIES OF THE COMPANY

Section 3.1     Purpose. The Company is formed for the purpose of engaging in,
and is authorized to engage in, any lawful act or activity for which limited
liability companies may be formed under the Delaware Act and it shall have the
organizational power to engage in any and all activities necessary, convenient,
desirable or incidental to the foregoing, including, without limitation, to
enhance the efficiency and competitiveness of the Coca-Cola bottling system in
the United States by establishing a more efficient system through reducing costs
of all Members, providing enhanced services to Members and customers, and in
continuing and enhancing a mutually beneficial relationship with The Coca-Cola
Company. The Company is also formed for the purpose of developing and capturing
opportunities to develop and grow, as authorized hereunder, profitable lines of
business in the distribution and management of distribution of non-alcoholic
non-carbonated beverages best distributed through means other than DSD
distribution and for the purpose of growing the value of the Member’s Interest
while preserving and enhancing the value and growth of each Member’s existing
business.

Section 3.2     Support of The Coca-Cola Company. With the approval of its Board
of Directors, The Coca-Cola Company has indicated its support of the Company by
a Letter of Understanding which advises the Company that The Coca-Cola Company
will integrate its North America procurement function and certain of its
procurement experienced employees into the Company’s operation, will collaborate
with the Company’s management in selecting the best route to market for new
products not best suited for the DSD system, and will offer those new products,
which would be best distributed outside the DSD system, on a basis that the
Company or the Bottlers will participate economically in their distribution. The
Coca-Cola Company has also indicated its understanding that the marketing
arrangements must be mutually advantageous from an economic perspective,
reflecting contribution of value and a fair balance of economic interests. The
Coca-Cola Company has also advised that its involvement with the Company will
have no effect on its current agreements with the Coca-Cola Bottlers, and
confirmed that products of The Coca-Cola Company that traditionally have been
manufactured by bottlers and distributed by their DSD systems, carbonated soft
drinks and cold fill non-carbonated beverages, will continue to go from The
Coca-Cola Company to the Coca-Cola Bottlers directly.

Section 3.3     Activities of the Company. On the commencement of doing business
the Company will initiate the following actions.

(i)     The Company will establish and operate a procurement division (the
“Procurement Division”) which shall procure or arrange for the procurement of
direct materials and certain indirect materials and services designated by the
Board, on behalf of or in the interest of those Members that participate with,
and The Coca-Cola Company to the extent it participates with, the Company in
accordance with the Procurement Policies.

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(ii)     The Company will establish and operate a distribution division (the
“Distribution Division”) to distribute or manage the distribution of
non-alcoholic beverage products which (1) are owned by or licensed to The
Coca-Cola Company or as to which The Coca-Cola Company otherwise has the right
to authorize distribution; (2) are offered to the Company; and (3) are products
that the Company concludes are best distributed by routes to market other than
(or in addition to) the DSD system.

(a)         The Company will use as its criteria for the selection of such
routes the maximization of the potential of the new product to the extent
consistent with the overall best interests of the Coca-Cola bottling system. It
may be that from time to time such new products should be distributed through
both the DSD and non-traditional route(s) to market.

(b)        The Company will not be obligated to accept all such new products
from The Coca-Cola Company and will promptly inform The Coca-Cola Company if the
Company has no interest in an offered product or believes the offered product
needs more analysis, or if the Company concludes that any product offered to the
Company should instead be distributed through the Bottlers’ DSD system.
Acceptance will be conditioned on (1) the Company’s belief that such product can
succeed and (2) coming to acceptable terms with The Coca-Cola Company. The
Company will negotiate all contracts with The Coca-Cola Company related to such
products as are to be managed by the Company.

(c)         In the event that the Company is offered the rights to distribute a
product by The Coca-Cola Company and, after deciding not to accept the offer for
any reason or after exercising reasonable efforts to develop a commercially
viable method to distribute such product, the Company determines not to
distribute the product or to continue to distribute the product, a Member may
undertake to distribute the product by an arrangement directly with The
Coca-Cola Company so long as (1) such distribution is by DSD and confined to
that Member’s Territory, or (2) if the distribution method is other than DSD,
absent a Director Extraordinary Vote authorizing the arrangement, (x) the
product is not in the same product category as any product then distributed in
the Coca-Cola bottling system or by the Company, and (y) if the Member is CCE or
a Regional Bottler, each vote that may be cast by the Director or Directors
appointed by such Member was voted in favor of distribution of the product in
question by the Company.

The Company will not undertake any business activity other than ones described
in this Section 3.3 absent a Director Extraordinary Vote. For the avoidance of
doubt, the foregoing restriction applies to additional business initiatives and
does not apply to the Company’s procurement and distribution activities and does
not prohibit the Company from undertaking action determined to be necessary or
appropriate to carry out the two main business activities described in this
Section 3.3 or other actions which do not represent a new type of business
endeavor.

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Section 3.4     Participation by Members. Each Member shall cooperate in good
faith with the Company in accomplishing the Company’s activities set forth in
Section 3.3; provided that the foregoing obligation does not apply to a Member’s
distribution of a product in the same product category as a “Company distributed
product” (as defined in Section 12.8) to the extent the Member is permitted to
distribute the product pursuant to the terms of Section 12.8. Each Member shall
participate with the Company in good faith on any decision or proposal the Board
makes with respect to the Procurement Policies or the production, marketing,
sales or distribution of a product owned by or licensed to the Company;
provided, however, that nothing contained in this Agreement shall require a
Member to undertake any activity with respect to a product of the Distribution
Division of the Company that such Member concludes, in its sole discretion, is
not reasonably likely to be economically beneficial to the Member. If the Member
chooses not to participate, the Company will have the right to produce, market,
sell and distribute the product in the Member’s Territory and the provisions of
Section 12.8 shall nonetheless be applicable. In addition, each Member agrees
that the Company may obtain from The Coca-Cola Company or Members directly from
time to time information about the Member’s product sales volume by percentage
and Territory population, maintain that information in the Company’s records and
provide that information to the Board to enable the Company to establish initial
Percentage Interests, adjust voting privileges and appropriately allocate
Profits and Losses. All such information will be held subject to the
confidentiality provisions of Section 16.12, with the confidentiality obligation
of the Company regarding information provided by The Coca-Cola Company about a
Member running in favor of the Member involved.

Section 3.5     Non-Involvement in Certain Activities. The Company shall not
undertake any action which interferes with or is otherwise in conflict with any
contractual relationship between a Member (or an Affiliate thereof) and The
Coca-Cola Company (or an Affiliate thereof) or between a Member and any other
Person. The Company shall not produce, market, sell or distribute within the
United States any Core Products, except to the extent such action is both
consistent with the Company’s obligation under the preceding sentence and is
authorized by a Director Extraordinary Vote. For purposes of this Section 3.5,
“Core Products” consist of

(i)     any carbonated soft drink products of the Coca-Cola Company currently
distributed by Members as reflected on Exhibit C attached hereto and hereby made
a part hereof and the line extensions of those products, and any carbonated soft
drink products hereafter distributed by Members under authority from The
Coca-Cola Company and the line extensions of those products;

(ii)    any cold fill non-carbonated beverage products of the Coca-Cola Company
currently distributed by Members as reflected on Exhibit C and the line
extensions of those products, and any cold fill non-carbonated beverage products
hereafter distributed by Members under authority of The Coca-Cola Company and
the line extensions of those products;

(iii)   any other non-carbonated beverage products of the Coca-Cola Company
currently distributed by Members, as reflected on Exhibit C, and the line
extensions of those products; and

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(iv)   any other specific non-alcoholic beverage products of the Coca-Cola
Company which The Coca-Cola Company determines are best distributed solely
through the DSD system.

Section 3.6     Powers of the Company.

(i)     Subject to the voting requirements imposed by this Agreement (including
but not limited to those imposed by Sections 6.9 and 6.10), the Company shall
have the power and authority granted by the Delaware Act to take any and all
actions necessary, appropriate, proper, advisable, incidental or convenient to
or for the furtherance of the activities set forth in Section 3.3, including,
but not limited to, the power:

(a)         to conduct its business, carry on its operations and have and
exercise the powers granted to a limited liability company by the Delaware Act
in any state, territory, district or possession of the United States, or in any
foreign country, that may be necessary, convenient or incidental to the
accomplishment of the purposes of the Company;

(b)        to enter into, perform and carry out contracts of any kind,
including, without limitation, contracts with The Coca-Cola Company and with its
subsidiaries, divisions, Affiliates and joint ventures, with customers and
suppliers and other third persons and with the Directors, the Officers, any
Manager, any Member, any Affiliate thereof, or any agent or Affiliate of the
Company necessary to, in connection with, convenient to, or incidental to the
accomplishment of the purpose of the Company;

(c)         to lend money to, act as surety, guarantor or endorser for, provide
collateral for, and transact other business with third parties including Members
and Affiliates of the Company;

(d)        to purchase, take, receive, subscribe for or otherwise acquire, own,
hold, vote, use, employ, sell, mortgage, lend, pledge, or otherwise dispose of,
and otherwise use and deal in and with, any kind of property, real or personal,
tangible or intangible, including without limitation shares or other interests
in or obligations of domestic or foreign corporations, associations, general or
limited partnerships (including, without limitation, the power to be admitted as
a partner thereof and to exercise the rights and perform the duties created
thereby), trusts, limited liability companies (including, without limitation,
the power to be admitted as a member or appointed as a manager thereof and to
exercise the rights and perform the duties created thereof), or individuals or
direct or indirect obligations of the United States or of any government, state,
territory, governmental district or municipality or of any instrumentality of
any of them;

(e)         to invest and reinvest its funds, to take and hold real and personal
property for the payment of funds so loaned or invested;

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(f)         to sue and be sued, complain and defend, and participate in
administrative or other proceedings, in its name;

(g)        to appoint employees and agents of the Company, and define their
duties and fix their compensation;

(h)        to indemnify any Person in accordance with the Delaware Act and to
obtain any and all types of insurance;

(i)         to cease its activities and cancel its Certificate;

(j)         to negotiate, enter into, renegotiate, extend, renew, terminate,
modify, amend, waive, execute, acknowledge or take any other action with respect
to any lease, contract or security agreement in respect of any assets of the
Company;

(k)        to borrow money and issue evidences of indebtedness, and to secure
the same by a mortgage, pledge or other lien on the assets of the Company;

(1)        to pay, collect, compromise, litigate, arbitrate or otherwise adjust
or settle any and all other claims or demands of or against the Company or to
hold such proceeds against the payment of contingent liabilities; and

(m)       to make, execute, acknowledge and file any and all documents or
instruments necessary, convenient or incidental to the accomplishment of the
purpose of the Company.

Section 3.7     Procurement Pricing and Administrative Costs.  In discharging
its service function of procuring goods and services on behalf of Members that
choose to participate in the Procurement Division of the Company, the Company
shall use reasonable efforts to ensure that (a) such procurement is carried out
in accordance with the Procurement Policies and (b) each participating Member
shares fairly and equitably in such program’s benefits in that, without regard
to the Member’s size or purchasing volume, each such Member shall be entitled to
pricing for the goods and services on a comparable basis. Except under
circumstances when the Board determines on the advice of the Procurement
Committee that such an approach would not be in the best interests of the
overall procurement system, pricing and freight will be equalized. Each
participating Member shall be apportioned a share of the administrative costs of
this service of the Company determined on a basis that, in the Company’s
judgment, gives appropriate weight to all relevant factors and results in a fair
and equitable cost apportionment that is consistent with the pricing of such
goods and services by the Company to its Members. CCE has agreed to participate
in the procurement program. The Board shall establish such further rules and
shall make decisions under the Procurement Policies as it deems necessary to
maximize the effectiveness of the program relative to the specific items which a
Member must agree to purchase through the Company’s procurement programs if the
Member is to participate in the Procurement Division. In all events, strict
confidentiality is to be maintained by the Company, its Members, its Directors,
its Officers, agents, and employees, and only persons with a need to

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know as a requirement of discharging their duties to the Company are to have
access to pricing details with respect to supply arrangements between the
Company and its suppliers. Notwithstanding the limitation of Members to
Coca-Cola Bottlers with Territories in the United States, (i) the operations of
CCE in Canada and Bottler-owned production cooperatives shall be entitled to
avail themselves of the procurement services of the Company on the same terms
and conditions as are available to the Members; and (ii) the operations of The
Coca-Cola Company participating in the purchase of products and services
purchased by the Company for Members and non-US Coca-Cola bottlers shall also be
entitled to participate in the Company’s procurement programs under such rules
and policies as shall be established by the Board. For the purpose of providing
assurances to Members about the fairness of the operations of the Procurement
Division, (x) notwithstanding the confidentiality provisions of this Agreement
to the contrary, upon the request from time to time of any three or more
Directors, the Company shall provide The Coca-Cola Bottlers’ Association
complete access to the pricing and allocation information of the procurement
program to permit The Coca-Cola Bottler’s Association to make and publish to the
Members and the Company a determination of whether the program has been
established and operates on a fair and equitable basis; and (y) the Company will
provide the Members, on an annual basis, a report by independent auditors
confirming that the procurement program is being administered by the staff of
the Company in accordance with the Procurement Policies.

ARTICLE IV

CAPITAL CONTRIBUTIONS,

CAPITAL ACCOUNTS AND ADVANCES

Section 4.1     Initial Capital Contributions.  Each Member as of January 1,
2003 will contribute that amount in United States dollars to the capital of the
Company that represents the Member’s Allocated Interest in the Company,
multiplied by the amount of Initial Capital of the Company, which shall be
determined by the Board as any amount up to $100,000. The actual contribution
shall be made on or before the date selected by the Board, and the failure of a
Member to make its required initial capital contribution in a timely way will
result in the automatic termination of its entire interest in the Company for no
compensation.

Section 4.2     No Additional Capital Contributions.  No Member shall be
required to make any additional capital contribution to the Company under any
circumstances except as may be required by the Board of an Additional Member
when it is admitted pursuant to Section 13.1. No Member shall be obligated to
restore a negative capital account balance.

Section 4.3     Personal Property.  A Member’s Interest shall for all purposes
be personal property. A Member has no interest in specific Company property.

Section 4.4     Capital Accounts.

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(i)     An individual Capital Account shall be established and maintained for
each Member. Capital accounts are intended to be maintained in accordance with
Treas. Reg. Section 1.704-1(b)(2)(iv).

(ii)    The Capital Account of each Member shall be maintained in accordance
with the following provisions:

(a)         to such Member’s Capital Account there shall be credited such
Member’s Capital Contributions (consisting of cash or the fair market value of
any property net of any liabilities secured by such contributed property that
the Company is considered to assume or take subject to under Section 752 of the
Code, all as set forth on the Schedule described in Section 2.1(iv)); such
Member’s distributive share of Profits; and such Member’s distributive share of
other items of income, gain or credits; and

(b)        to such Member’s Capital Account there shall be debited the amount of
cash and the fair market value of property distributed by the Company to such
Member (net of liabilities secured by such distributed property which the Member
is considered to assume or take subject to under Section 752 of the Code); such
Member’s distributive share of Losses; and such Member’s distributive share of
other items of loss or deduction.

Section 4.5     Advances; Consequences of Nonrecourse Loans.

(i)     If any Member shall advance any funds to the Company in excess of its
Capital Contributions, the amount of such advance shall neither increase its
Capital Account nor entitle it to any increase in its share of the distributions
of the Company. The amount of any such advance shall be a debt obligation of the
Company to such Member and shall be subject to such terms and conditions
acceptable to the Company and such Member; provided, however, that if the Member
determines in good faith that the Company faces a financial emergency that
immediately threatens its continuing operation, the Member may make an advance
without the Company’s prior approval and the terms and conditions of such
advance must, under any circumstances be no more or less favorable to the Member
than is commercially reasonable. Any such advance shall be payable and
collectible only out of Company assets, and the other Members shall not be
personally obligated to repay any part thereof.

(ii)    No Person who makes any loan to the Company shall have or acquire, as a
result of making such loan, any direct or indirect interest in the profits,
capital or property of the Company, other than as a creditor.

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ARTICLE V

MEMBERS

Section 5.1     Powers of Members.  The Members shall have the power to exercise
any and all rights or powers granted to the Members pursuant to the express
terms of this Agreement. The Members shall have the right (i) to approve or
disapprove the sale of all or substantially all of the Company’s assets in one
transaction or in a series of related transactions; (ii) to approve or
disapprove the Company’s merger with, or consolidation into, another Delaware
limited liability company or other business entity (as defined in Section
18-209(a) of the Delaware Act); (iii) except as otherwise contemplated by
Section 15.2, to approve or disapprove the dissolution of the Company; (iv) to
select Directors as provided herein; and (v) to exercise the other rights and
powers as are provided in this Operating Agreement. In addition, the Mainstream
Bottlers, on the basis of a majority of the number of Mainstream Bottlers (with
each Member that is a Mainstream Bottler having one vote without regard to the
number of Units held by such Member), shall authorize any removal of a
Mainstream Bottler from the Company pursuant to Section 6.10. Except as
expressly provided herein, the Members shall have no power to bind the Company.

Section 5.2     Reimbursements.  The Company may reimburse the Members for all
reasonable out-of-pocket expenses incurred by the Members on behalf of the
Company in accordance with policies established by the Board from time to time.
Such reimbursement shall be treated as an expense of the Company that shall be
deducted in computing the Net Cash Flow and shall not be deemed to constitute a
distributive share of Profits or a distribution or return of capital to any
Member.

Section 5.3     Partition.  Each Member waives any and all rights that it may
have to maintain an action for partition of the Company’s property.

Section 5.4     Resignation; Disqualification.  A Member may resign (i) upon (x)
December 31, 2005 (or, in the case of an Additional Member, the third
anniversary of its having been admitted as a Member) and (y) thereafter on
December 31 of the succeeding years immediately preceding the years in which a
general adjustment in membership categories is to be implemented pursuant to
Section 6.1(vi), but only if in any such event the Member has given the Company
at least one year’s advance written notice of its intention to resign; and (ii)
upon the dissolution and winding up of the Company. Upon any resignation under
clause (i) of the preceding sentence, the Member shall sell and Company shall
purchase all the Units of the Member on the terms and conditions set forth in
Section 14.1 applicable to a resigning Member. If a Member transfers all of its
Units in accordance with the provisions of Article XIV it shall be disqualified
as a Member and as provided therein shall no longer be treated as a Member of
the Company. In addition, if a Member becomes an Affiliate of The Coca-Cola
Company, it shall be disqualified as a Member and the Member shall sell and
Company shall purchase all the Units of the Member on the terms and conditions
set forth in Section 14.1 applicable to such Member. A resignation or
disqualification will not affect the Member’s responsibilities and obligations
under distribution or procurement contracts with the Company in effect as of the
date of the resignation or disqualification. In addition, a resignation will not
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distribution or procurement programs to the extent, in the President’s
reasonable judgment, such Member’s participation therein was a material
condition of a distribution or procurement supply agreement in effect as of date
notice of the resignation was given.

Section 5.5     Meetings of Members; Voting by Members.

(i)     Meetings of Members may be held at such time and place, within or
outside the State of Delaware, as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof.

(ii)    Meetings of the Members or of a class of Members, for any purpose or
purposes, may be called by the President and shall be called by the President or
Secretary at the request in writing of the holders of twenty-five percent (25%)
of the Units owned by the Members or the class of Members and also as provided
in Section 6.1. Any such written request by the Members or a class of Members
shall state the purpose or purposes of the proposed meeting.

(iii)   Written notice of a meeting stating the place, date and hour of the
meeting and the purpose or purposes for which the meeting is called, shall be
given not less than 10 nor more than 60 days before the date of the meeting, to
each Member entitled to vote at such meeting.

(iv)   Business transacted at any meeting of Members shall be limited to the
purposes stated in the notice, unless otherwise agreed by all of the Members.

(v)    Subject to the provisions of Section 6.1, all voting by Members shall be
on the basis of Units, each Unit shall be entitled to one vote, and no Member
may split the voting of its Units on any vote.

(a)         Quorum for meetings of all Members.  The holders of that number of
Units representing not less than the sum of the Units of CCE and its Affiliates
and a majority of all other Units issued and outstanding and entitled to vote,
present in person or represented by proxy, shall constitute a quorum for the
transaction of business at all meetings open to all the Members.

(b)        Quorum for meeting of Mainstream Bottler Members.  The majority of
the Members who are Mainstream Bottlers, present in person or by proxy (and not
the owners of a majority of the Units held by Mainstream Bottlers) shall
constitute a quorum for the transaction of business by that class of Members.

If, however, a quorum shall not be present or represented at any meeting of the
Members or class of Members, the Members entitled to vote thereat, present in
person or represented by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented any business may be transacted which
might have been transacted at the

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meeting as originally notified. If the adjournment is for more than 30 days, or
if after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each Member of record entitled
to vote at the meeting.

(vi)   When a quorum is present at any meeting of all the Members, the vote of
Members holding that number of Units not less than the sum of the Units of CCE
and its Affiliates and a majority of all other Units, present in person or
represented by proxy, shall decide any question brought before such meeting,
unless the question is one upon which, by the Delaware Act or an express
provision of this Agreement, a different vote is required, in which case such
express provision shall govern. When a quorum is present at any meeting of a
class of Members, the vote shall be as required by the express provision of this
Agreement that is applicable to the vote at such meeting.

(vii)  Unless otherwise provided in this Agreement, at every meeting of the
Members or a class of Members at which a Member is entitled to vote, such Member
shall be entitled to vote in person or by proxy, but no proxy shall be
recognized after three years from its date, unless the proxy provides for a
longer period.

(viii) Members may participate in a meeting of the Members or a class of Members
by means of conference telephone or similar communications equipment, provided
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
If all the participants are participating by conference telephone or similar
communications equipment, the meeting shall be deemed to be held at the
principal place of business of the Company.

(ix)   Unless otherwise provided in this Agreement, any action required to be
taken at any meeting of the Members (or class of Members) or any action which
may be taken at any meeting of such Members (or class), may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by Members holding the number
of Units not less than the minimum number of Units that would be necessary to
authorize or take such action at a meeting at which all Members entitled to vote
thereon were present and voted. Prompt notice of the taking of the action
without a meeting by less than unanimous consent shall be given to those Members
who have not consented in writing.

ARTICLE VI

MANAGEMENT

Section 6.1     Board of Directors.

(i)     The business and affairs of the Company shall be managed by or under the
direction of its managers, namely a committee of the Company (the “Board”)
consisting of natural persons who are selected as directors of the Company as
provided below (each

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a “Director” and any two or more “Directors”). If the President of the Company
is not also a Director, the President shall be an ex officio, non-voting member
of the Board. All Directors shall, when elected, be owners or members of senior
management of Members. Each Director may appoint one or more alternates to act
in his or her absence in accordance with procedures to be adopted by the Board.

(ii)    Subject to adjustment as provided below, there shall be up to sixteen
(16) Directors, consisting of (a) from one (1) to eight (8) National Bottler
Directors, who among them shall have the authority, in the aggregate, to cast
eight votes; (b) six (6) Regional Bottler Directors, each of whom shall have the
authority to cast one vote; and (c) two (2) Mainstream Bottler Directors, each
of whom shall have the authority to cast one vote. Directors shall be elected
for three (3) year terms.

(iii)   All National Bottler Directors shall initially be elected by CCE, in its
capacity as a Member, and CCE and its Affiliates shall in no event elect any
Directors other than the National Bottler Directors. For so long as CCE and its
Affiliates have 50% or more of the Sales Volume, the National Bottler Directors
shall have the authority to cast eight votes. In the event that CCE and its
Affiliates have: (I) less than 50% but at least 43.75% of the Sales Volume, the
National Bottler Directors shall have the authority to cast seven votes; (II)
less than 43.75% but at least 37.5% of the Sales Volume, the National Bottler
Directors shall have the authority to cast six votes; and (III) there shall be
one additional vote reduction for each additional 6.25% reduction in relative
Sales Volume of CCE and its Affiliates. The number of National Bottler Directors
in office shall never exceed, but may be less than, the number of votes the
National Bottler Directors then have the authority to cast.

(iv)   Each Regional Bottler Director shall be separately selected by a Regional
Bottler; provided that each Large Regional Bottler, if any, shall be entitled to
elect two (2) Regional Bottler Directors. For so long as CCE and its Affiliates
have 50% or more of the Sales Volume, there shall be six (6) Regional Bottler
Directors. For each one-vote reduction in the voting power of the National
Bottler Directors in accordance with Section 6.1(iii), the number of Regional
Bottler Directors (and of Regional Bottlers) shall be increased by one.

(v)    There shall be two (2) Mainstream Bottler Directors and the Mainstream
Bottlers shall elect the Mainstream Bottler Directors on the basis of a majority
of the number of Mainstream Bottlers (with each Member that is a Mainstream
Bottler having one vote without regard to the number of Units held by such
Member).

(vi)   The classification of a Member as a Regional Bottler, a Large Regional
Bottler or a Mainstream Bottler, and the determination of whether the number of
Regional Bottler Directors and National Bottler Directors shall be adjusted as
provided in Sections 6.1(iii) and (iv) above, shall be made and determined by
the President, subject to the approval of the Board, every third year as of
April 1 of the adjustment year based on the Members’ Sales Volume for the
preceding three calendar year period. The first adjustment year will be 2006.
Notwithstanding the foregoing, if during the interim

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between the regular adjustments any Regional Bottler ceases to qualify as a
Regional Bottler because it becomes Affiliated with CCE or The Coca-Cola
Company, becomes a controlled Affiliate of another Regional Bottler or
otherwise, the President, subject to the approval of the Board, promptly shall
designate the largest Mainstream Bottler, based on the Members’ Sales Volume for
the immediately preceding three calendar year period, as the replacement
Regional Bottler.

(vii)  The natural Persons who shall serve as the initial Directors of the
Company are listed on Exhibit D attached hereto and hereby made a part hereof
and the initial Members entitled to select Directors are deemed to have so
selected them. Those Members entitled to select one or more members of a class
of Directors as set forth above shall elect the Director or Directors of such
class to serve until replaced hereunder. Any Member that becomes a Regional
Bottler under Section 6.1(iv) which has not previously appointed a Regional
Bottler Director shall promptly do so; any Regional Bottler Director who was
appointed by a Member which is no longer a Regional Bottler shall be immediately
disqualified and shall be replaced as provided in Section 6.1(ix)(b); and the
other Regional Bottlers and the Mainstream Bottlers may, if they choose, replace
their Directors as provided herein. Each Director elected shall hold office
until a successor is elected and qualified or until such Director’s earlier
death, resignation, removal or automatic disqualification.

(viii) The authorized number of Directors and the number of each class of
Directors may be increased or decreased by the affirmative vote of Members
holding Units equal to the sum of the Units held by CCE and its Affiliates and
seventy-five percent (75%) of all other Units if, and only if, at least eighty
percent (80%) of the Units held by Members who may vote for the affected class
of Director vote in favor of the change (or, if the affected class is the
Mainstream Bottler Directors, by eighty percent (80%) of the number of
Mainstream Bottlers, regardless of their Unit ownership).

(ix)   Vacancies in Director positions, including those caused by automatic
disqualification of a Director under Section 6.7(iii), shall be filled promptly
following the occurrence of the vacancy and in any event within 60 days thereof,
as follows:

(a)         A National Bottler Director vacancy shall be filled by selection of
a new Director by CCE.

(b)        Subject to the remaining provisions of this Section 6.1(ix)(b), a
Regional Bottler Director vacancy caused by the removal, resignation,
disqualification or death of a Regional Bottler Director shall be filled by
selection of a new Director by the Regional Bottler that selected the Director
who vacated the office. If that Regional Bottler has become an Affiliate of CCE,
a controlled Affiliate of another Regional Bottler or of The Coca-Cola Company,
or has ceased to exist, the vacant directorship shall instead be selected by the
Member that will become a Regional Bottler under Section 6.1 (vi) (i.e., the
largest Member, in terms of Sales Volume, that was previously a Mainstream
Bottler).

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(c)         A Mainstream Bottler Director vacancy shall be filled by election at
a special meeting of the Mainstream Bottlers, or through such other process as
is determined by such Mainstream Bottlers, and they shall elect such Director’s
successor by majority vote of the Mainstream Bottlers (and not by majority vote
of their Units); provided, however, that a Mainstream Bottler that has (I)
become a controlled Affiliate of another Member or (II) ceased to exist, shall
not be eligible to vote in such election and only the remaining Mainstream
Bottlers shall select the successor Director by majority vote of such Members
(and not by majority vote of their Units).

(x)    Each Member that becomes an Affiliate of another Member shall give notice
thereof to the Company not later than ten (10) days after the closing of the
transaction in which the Member became an Affiliate. Each Member that enters
into a transaction or adopts a plan under which it will cease to have a legal
existence shall give notice thereof to the Company upon entering into such
transaction or adopting such plan. The Company shall give notice of each such
event as to which it is provided notice to each other Member whose voting rights
may be affected hereunder within thirty (30) days after the Company’s receipt of
notice of such event. No Director who has become disqualified to serve as a
Director for any reason shall be entitled to vote on any matter submitted to a
vote of Directors and, in each case where such disqualification has occurred,
the Member or class or classes of Members affected by such disqualification
shall be entitled to replace the disqualified Director in the manner described
herein before any such vote is effected.

Section 6.2     Meetings of the Board. There shall be a minimum of four Board
meetings each year. The Board may hold meetings, both regular and special,
within or outside the State of Delaware. The first meeting of each newly elected
Board shall be held immediately after the annual meeting of Members, if any, and
at the same place, and no notice of such meeting shall be necessary to the newly
elected Directors in order legally to constitute the meeting, provided a quorum
shall be present. In the event there is no annual meeting of the Members or such
Board meeting is not held at that time and place, the first meeting of the newly
elected Board may be held at such time and place as shall be specified in a
notice given as hereinafter provided for special meetings of the Board, or as
shall be specified in a written waiver signed by all of the Directors. At such
meeting the newly elected Directors shall elect a Chair who shall preside over
that meeting of the Board and all subsequent meetings of the Board and of the
Members until the next Chair is elected. The Chair shall be elected by a
Director Regular Vote; provided, however, that the holder of the Chair shall be
a National Bottler Director at all times that CCE’s Percentage Interest is fifty
percent (50%) or greater, and, provided further, the first Chair shall be Norman
P. Findley, III. Mr. Findley shall hold a three year term and may continue as
Chair if he retires as an employee of CCE during such term. Regular meetings of
the Board may be held without notice at such time and at such place as shall
from time to time be determined by the Board. Special meetings of the Board may
be called by the President on three (3) days’ notice to each Director, either
personally, by telephone, by mail, by telecopy or by any other means of
communication; special meetings shall be called by the President or Secretary in
like manner and on like notice on the written request of two or more of the
Directors.

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Section 6.3     Quorum and Acts of the Board and of Committees. At all meetings
of the Board sixty-six and two-thirds percent (66 2/3%) of the voting power of
the Directors, present in person or by proxy, shall constitute a quorum for the
transaction of business and, except as otherwise expressly provided in Section
6.10 or any other provision of this Agreement, a Director Regular Vote shall be
the act of the Board. If a quorum shall not be present at any meeting of the
Board, the Directors present may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Voting requirements for committees established by the Board, including the
Procurement Committee and the Distribution Committee, shall be as established by
the Board. Any action required or permitted to be taken at any meeting of the
Board or of any committee thereof may be taken without a meeting, if the members
of the Board or committee, as the case may be, unanimously consent thereto in
writing and the writing or writings are filed with the minutes of proceedings of
the Board or committee. Unless otherwise provided in this Agreement, at every
meeting of the Directors at which a Director is entitled to vote, such Director
shall be entitled to vote in person or by proxy, but no proxy shall be
recognized after three years from its date, unless the proxy provides for a
longer period; provided, however, that National Bottler Directors may cast their
eight votes (or such lesser number of votes as they then have the authority to
cast) at a Board meeting if and only if at least two National Bottler Directors
are actually present at the meeting and agree on how the votes shall be cast.

Section 6.4     Electronic Communications. Members of the Board, or any
committee designated by the Board, may participate in a meeting of the Board, or
any committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in
person at the meeting. If all the participants are participating by conference
telephone or similar communications equipment, the meeting shall be deemed to be
held at the principal place of business of the Company.

Section 6.5     Committees. The Board shall designate at least two operating
committees, the Procurement Committee and the Distribution Committee, the
members of which shall be selected by the Board. The Board may, by resolution
passed by a Director Regular Vote, designate one or more additional committees.
Any such committee may consist of one or more Directors or one or more natural
persons who are not Directors; provided, however, that the membership of the
Procurement Committee shall always include a broad representation from Members
for whom procurement is undertaken by the Company and from employees of The
Coca-Cola Company, to the extent that the Company is engaged in substantial
procurement activities on behalf of The Coca-Cola Company; and, provided,
further, that the membership of the Distribution Committee may, if the Board
deems appropriate, also include representation from The Coca-Cola Company.

In selecting the membership of any given committee, the Board shall consider the
committee’s function and the extent to which the class membership of any
Directors on the committee should reflect the class membership of the Board as a
whole. The Board may designate one or more persons as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. In no event shall more than one-half of a committee’s votes be
held by Directors who are National Bottler Directors.

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Any such committee, to the extent expressly provided in a resolution of the
Board, shall have and may exercise all the powers and authority of the Board in
the management of the business and affairs of the Company, but no such committee
shall have the power or authority to take any of the actions described in
Section 6.9 or Section 6.10 of this Agreement unless authorized by unanimous
vote or written consent of the Board. The powers and authorities of the
Procurement and the Distribution Committees, respectively, shall be as
determined by the Board from time to time, but shall include providing the
Company and the Board with the benefit of the knowledge and insights of
Committee members in developing effective plans, strategies and tactics in the
functional areas addressed by each Committee. Such committee or committees
designated in addition to the Procurement and the Distribution Committees shall
have such name or names as may be determined from time to time by resolution
adopted by the Board. Each committee shall keep regular minutes of its meetings
and report the same to the Board when required.

Section 6.6     Expenses. The Directors may be paid their reasonable expenses,
if any, of attendance at any meeting of the Board. No such payment shall
preclude any Director from serving the Company in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like reimbursement of reasonable expenses for attending committee
meetings.

Section 6.7     Removal, Resignation and Automatic Disqualification of
Directors.

(i)     Unless otherwise restricted by Law, Directors may be removed, with or
without cause, (a) in the case of a National Bottler Director, by CCE; (b) in
the case of a Regional Bottler Director, by the Regional Bottler which appointed
the Director; and (c) in the case of a Mainstream Bottler Director, by a vote of
sixty-six and two-thirds percent (66 2/3%) of the Mainstream Bottlers (with each
Member that is a Mainstream Bottler having one vote without regard to the number
of Units held by such Member).

(ii)    A Director may resign by written notice signed by the Director resigning
and delivered to the Member that selected the Director or the Members that were
in the group that elected that Director, the other Directors, and the President.
Unless otherwise specified in the notice, the resignation will become effective
sixty (60) days after the date the notice was given.

(iii)   A Regional Bottler Director shall be automatically disqualified from
office and shall immediately cease to serve as a Director if the Regional
Bottler that elected such Director thereafter becomes an Affiliate of CCE, a
controlled Affiliate of another Regional Bottler or of The Coca-Cola Company or
otherwise ceases to be a Regional Bottler or ceases to exist. A Mainstream
Bottler Director shall be automatically disqualified from office and shall
immediately cease to serve as a Director if such Director is an employee of a
Mainstream Bottler or an Affiliate thereof and after such Director is elected
such Mainstream Bottler either ceases to exist or becomes an Affiliate of The
Coca-Cola Company, CCE or a Regional Bottler.

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Section 6.8     Directors as Agents. The Directors, to the extent of their
powers set forth in this Agreement, are agents of the Company for the purpose of
the Company’s business, and the actions of the Directors taken in accordance
with and subject to the terms and limitations of this Agreement shall bind the
Company. No Director shall have the authority to bind the Company, to execute
contracts or to expend funds unless such action has been authorized by the
requisite Director vote.

Section 6.9     Actions Requiring A Director Regular Vote. Notwithstanding any
other provision of this Agreement to the contrary, the Company shall not take
any of the following actions unless authorized to do so by a Director Regular
Vote:

(i)     subject to the provisions of Section 5.1, the sale, exchange or other
disposition of any of the assets of the Company in a single transaction or in a
series of related transactions, with a fair market value in excess of ten
percent (10%) of net asset value, except for sales in the ordinary course of
business;

(ii)    the commencement of a voluntary proceeding seeking reorganization or
other relief with respect to the Company or any of controlled Affiliate of the
Company under any bankruptcy or other similar law or seeking the appointment of
a trustee, receiver, custodian or other similar official of the Company or any
Affiliate or any substantial part of its property, or the making by the Company
or any Affiliate of a general assignment for the benefit of creditors;

(iii)   the declaration or making of any distributions to Members, except
distributions of the Tax Amount as set out in Section 9.4 of this Agreement;

(iv)   the entering into of any material contract of any nature with (a) The
Coca-Cola Company or (b) any Member or its Affiliates, and, in each case, any
material amendment, early termination or renewal thereof;

(v)    the distribution of products outside of the DSD system or the entering
into by the Company of any joint venture, partnership, subcontracting, license,
sub-license, manufacturing, marketing, distribution or other similar arrangement
with any Person and the disposition of the Company’s interest therein, except as
contemplated by a business plan or other plan previously approved by the Board
with respect to the management of the Company beverage distribution business;

(vi)   the entering into by the Company of any agreement, facility, commitment,
guaranty, instrument or other undertaking providing for, or relating to, the
incurrence of any indebtedness for borrowed money by the Company, except to the
extent specifically authorized in a business plan approved by the Board;

(vii)  the formation, organization or liquidation of any subsidiary of the
Company and the appointment of directors of (or persons with comparable
authority with respect to) any such subsidiary;

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(viii) the issuance, sale, or, except as otherwise specifically contemplated by
Section 14.1(ii), repurchase by the Company of any Interest or other equity
interest (or option, warrant, conversion or similar right with respect to any
equity interest) in or of the Company;

(ix)   the commitment to any material capital expenditure by the Company in any
Fiscal Year of the Company, except to the extent specifically authorized in a
business plan approved by the Board;

(x)    the adoption or any significant amendment of the Company’s annual and
long term business plan and annual operating budget for the Company (or any
updates to any of them);

(xi)   the selection and dismissal of Officers and other senior management, the
determination of the duties of Officers, and the entering into, amendment or
termination of employment contracts with Officers or any other contracts with
Directors, Officers, members of senior management, or their respective
Affiliates;

(xii)  the appointment or change of the independent auditors of the Company;

(xii)  the acquisition or lease by the Company of any real property, or any
sale, lease or sublease of, or similar arrangement affecting, any real property
owned or leased by the Company, except to the extent specifically authorized in
a business plan approved by the Board;

(xiv) the incurrence or assumption of any material liability or obligation,
whether contractually or otherwise, by the Company, except to the extent
specifically authorized in a business plan approved by the Board;

(xv)  the making of any political contributions, except to the extent
specifically authorized in a business plan approved by the Board;

(xvi) the making of any charitable contributions, except to the extent
specifically authorized in a business plan approved by the Board;

(xvii)  (a) any change in accounting principles, methods or practices of the
Company other than those necessary to conform with generally accepted accounting
principles; (b) any voluntary change in the fiscal year of the Company or any
subsidiary; (c) any voluntary change in the taxable year or method of tax
accounting for income tax purposes of the Company or any subsidiary; or (d) the
conversion by the Company to a different method of taxation as contemplated by
Section 11.3;

(xiii) approval of the annual financial statements of the Company and its
subsidiaries;

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(xix) initiation or settlement of any judicial, administrative or arbitration
proceedings involving the Company or any subsidiary, or the payment or
settlement of any claim involving the Company or any subsidiary which exceeds
two hundred thousand U.S. dollars (US $200,000); and

(xx)  entering into of any contract or other agreement having a term greater
than two (2) years or involving a sum greater than ten million U.S. dollars (US
$10,000,000) per annum or the equivalent in any other currency, or the
modification of any material term of any such contract or agreement, including,
without limitation, modifications of payment terms, extensions and
cancellations, except to the extent specifically authorized in a business plan
approved by the Board.

Section 6.10     Actions Requiring A Director Extraordinary
Vote. Notwithstanding any other provision of this Agreement to the contrary, the
Company shall not take any of the following actions unless authorized to do so
by a Director Extraordinary Vote:

(i)     Undertake any new business activities beyond those specified in Section
3.3, or terminate the functions of either the Distribution Division or the
Procurement Division.

(ii)    Any action requiring a Director Extraordinary Vote as provided in
Sections 3.3(ii)(c), 3.5 or 12.8(i).

(iii)   Restrict payment of a Tax Distribution under Section 9.4.

(iv)   Determine the “Fair V!alue” of a Member’s Units under the valuation
procedures applicable under Section 14.1(ii) when a Member becomes Affiliated
with The Coca-Cola Company, unless that determination is effected by mutual
agreement with the Member in question.

(v)    Subject to Section 5.1, dissolve the Company pursuant to Section 15.2(i).

(vi)   Impose a sanction reasonably determined to be appropriate by the Board on
a Member for violating its commercial obligations hereunder regarding the
Procurement Division or the Distribution Division. Sanctions could include,
without limitation, loss of right to participate, in whole or in part, in future
profits of one or more products or services, loss of right to participate, in
whole or in part, in one or more of the divisions, businesses or services of the
Company or, subject to Section 5.1, removal from membership in the Company.
Sanctions will not be implemented under this Section 6.10(vi) unless the Company
gives the Member notice of the violations and a reasonable period of time as
determined by the Board in which to cure the violations, which period of time
shall be not less than 30 days after the date the notice is given.

(vii)  Subject to Section 5.1, remove any Member from membership in the Company.
In voting to remove a Member under this clause (vii), the Directors shall be
guided by whether, in their judgment, the Member has engaged in activity that
has had, or

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is expected to have, a negative impact on the Company, the development of its
goals, or its operations. All the Units of any Member who is so removed shall be
sold by the Member and purchased by the Company in accordance with Section
14.1(ii). The removal of a Member will not affect the Member’s procurement
contracts with the Company in effect as of the date of the removal. A Member
will not be removed under this Section 6.10(vii) unless the Company gives the
Member notice of the activity and a reasonable period of time as determined by
the Board in which to modify its conduct, which period of time shall be not less
than 30 days after the date the notice is given.

ARTICLE VII

OFFICERS

Section 7.1     Officers. The Board may select, as provided in Section 6.9,
natural persons who are agents or employees of the Company to be designated as
officers of the Company (“Officers”), with such titles as the Board shall
determine. Any number of offices may be held by the same person, except that the
offices of President, Secretary and Treasurer shall be held by different
persons. The Board at its first meeting after each meeting of Members at which
Directors are selected shall choose a President, a Secretary and a Treasurer.
The Board may appoint such other Officers and agents as it shall deem necessary
who shall hold their offices for such terms and shall exercise such powers and
perform such duties as shall be determined, as provided in Section 6.9, from
time to time by the Board. The salaries of all Officers and agents of the
Company shall be fixed by or in the manner recommended by the President and
prescribed by the Board. The Officers shall hold office until their successors
are chosen and qualify. Any Officer may be removed at any time by a Director
Regular Vote with or without cause and any vacancy occurring in any office of
the Company may be filled by a like vote.

Section 7.2     The Chairman of the Board. The Chairman of the Board shall serve
as the chair of all meetings of the Board and of any committees of the Company
upon which he or she may serve and shall have such other duties and
responsibilities as the Board may from time to time determine. The Chairman of
the Board shall be a Director but need not otherwise be an agent or employee of
the Company.

Section 7.3     The President. The President shall be the chief executive
officer of the Company, shall have general and active management of the business
of the Company and shall see that all orders and resolutions of the Board are
carried into effect. The President shall execute bonds, mortgages and other
contracts, except where required or permitted by Law to be otherwise signed and
executed and except where signing and execution thereof shall be otherwise
authorized or delegated or except as otherwise permitted in Section 7.4.

Section 7.4     The Vice President. In the absence of the President or in the
event of the President’s inability to act, the Vice President, if any (or in the
event there be more than one Vice President, the Vice Presidents in the order
designated by the Directors, or in the absence of any designation, then in the
order of their election) shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the

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President. The Vice Presidents, if any, shall perform such other duties and have
such other powers as the Board may from time to time prescribe.

Section 7.5     The Secretary. The Secretary shall be responsible for filing
legal documents and maintaining records for the Company. The Secretary shall
attend all meetings of the Board and all meetings of the Members and record all
the proceedings of the meetings of the Company and of the Board in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. The Secretary shall give, or cause to be given, notice of all
meetings of the Members and special meetings of the Board, and shall perform
such other duties as may be prescribed by the Board or President, under whose
supervision the Secretary shall be.

Section 7.6     The Treasurer. The Treasurer shall have the custody of the
Company funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Company and shall deposit
all moneys and other valuable effects in the name and to the credit of the
Company in such depositories as may be designated by the Board. The Treasurer
shall disburse the funds of the Company as may be ordered by the Board, taking
proper vouchers for such disbursements, and shall render to the President and
the Board, at its regular meetings, or when the Board so requires, an account of
all of the Treasurer’s transactions and of the financial condition of the
Company.

Section 7.7     Officers as Agents. The Officers, to the extent of their powers
set forth in this Agreement or otherwise vested in them by action of the Board,
are agents of the Company for the purpose of the Company’s business, and the
actions of the Officers taken in accordance with such powers shall bind the
Company.

Section 7.8     Duties of Directors and Officers. Each Director and Officer
shall have the fiduciary duties of loyalty and care similar to those of
directors and officers of business corporations organized under the General
Corporation Law of the State of Delaware and shall owe such duties to the
Company and to all of its Members.

ARTICLE VIII

ALLOCATIONS

Section 8.1     Profits and Losses.

(i)     Subject to the allocation rules of Section 8.2, Profits for any Fiscal
Year shall be allocated among the Members in proportion to their Percentage
Interests.

(ii)    Subject to the allocation rules of Section 8.2, Losses for any Fiscal
Year shall be allocated among the Members in proportion to their Percentage
Interests.

Section 8.2     Allocation Rules.

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(i)     For purposes of determining the Profits, Losses or any other items
allocable to any period, Profits, Losses and any such other items shall be
determined on a daily, monthly or other basis, as determined by a Director
Regular Vote using any method that is permissible under § 706 of the Code and
the Treasury Regulations thereunder.

(ii)    Except as otherwise provided in this Agreement, all items of Company
income, gain, loss, deduction and any other allocations not otherwise provided
for shall be divided among the Members in the same proportions as they share
Profits and Losses for the Fiscal Year in question.

(iii)   To the extent that the taxing authorities recharacterize as a
distribution an amount initially treated by the Company as a payment made to a
Member other than in its capacity as a Member, a guaranteed payment under
section 707(c) of the Code or some other form of payment deductible to the
Company, then the allocation of Profits and Losses shall be adjusted such that
an amount equal to the amount so recharacterized is allocated to the recipient
Member as an item of income or gain.

(iv)   The Members are aware of the income tax consequences of the allocations
made by this Article VIII and hereby agree to be bound by the provisions of this
Article VIII in reporting their shares of Company income and loss for income tax
purposes.

(v)    The Members intend that the allocation provisions set forth in this
Agreement shall comply with Section 704(b) of the Code and the Treasury
Regulations issued thereunder and the provisions are to be interpreted in a
manner consistent with those Treasury Regulations.

Section 8.3     Tax Allocations.

(i)     Section 704(c). In accordance with Section 704(c) of the Code and the
Treasury Regulations thereunder, income, gain, loss and deduction with respect
to any property contributed to the capital of the Company shall, solely for
income tax purposes, be allocated among the Members so as to take account of any
variation between the adjusted basis of such property to the Company for federal
income tax purposes and its initial fair market value.

(ii)    Section 754 Adjustments. To the extent an adjustment to the adjusted tax
basis of any Company asset pursuant to Section 734(b) or Section 743(b) of the
Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m),
to be taken into account in determining capital accounts, the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis) and such
gain or loss shall be allocated to the Members in accordance with Treasury
Regulation Section 1.704-1(b)(2)(iv)(m).

Section 8.4     Section 754 Election. Upon written request of any Member, the
Tax Matters Partner shall make an election pursuant to section 754 of the Code
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the Company’s property in the manner permitted by sections 734(b) and 743(b) of
the Code. Subject to a Director Regular Vote, the Tax Matters Partner may revoke
such an election.

ARTICLE IX

DISTRIBUTIONS

Section 9.1     Net Cash Flow. Except as otherwise provided in Article XV hereof
(relating to the dissolution of the Company), any distribution of the Net Cash
Flow during any Fiscal Year shall be made to the Members in proportion to their
Percentage Interests.

Section 9.2     Distribution Rules. Except as provided in Section 9.4, all
distributions pursuant to Section 9.1 shall be discretionary and shall be
authorized, if at all, by the Board at such times and in such amounts as shall
be determined by the Board pursuant to Section 6.9.

Section 9.3     Limitations on Distribution. Notwithstanding any provision to
the contrary contained in this Agreement, the Company, and the Board on behalf
of the Company, shall not make a distribution to any Member on account of its
interest in the Company if such distribution would violate Section 18-607 of the
Delaware Act or other applicable Law.

Section 9.4     Distribution of the Tax Amount. At any time the Company is
treated for federal income tax purposes as a partnership, then, subject to any
limitation imposed by the Delaware Act or other applicable law, absent a
Director Extraordinary Vote to the effect that it is in the best interests of
the Company not to make such a distribution, the Company shall distribute with
respect to each of its taxable years the “Tax Amount” to the Members in
accordance with their respective Percentage Interests. The Tax Amount for a
taxable year shall be determined by multiplying an amount equal to the Company’s
taxable income (as defined below) for such year by a percentage that is equal to
the sum of: (i) the highest state tax rate applicable to any Member for the
year, and (ii) the highest federal individual or corporate income tax rate for
that year reduced by the product of such highest federal rate and the state tax
rate determined under clause (i). As used herein, taxable income shall mean the
Company’s taxable income as determined for federal income tax purposes under
Section 703 of the Code, disregarding the provisions of Section 703(a)(1). To
the extent feasible, the Company shall make partial distributions of the Tax
Amount for a taxable year, based on its best estimates from the information
available to it at the time of the distribution, sufficiently prior to estimated
tax payment dates for that year to permit the Members conveniently to pay their
estimated taxes on their share of the Company’s income. On or before March 10 of
the year following the year as to which the Tax Amount relates the Company shall
make such additional distributions, if any, which, when added to prior partial
distributions of the Tax Amount for that year, equals the Company’s good faith
estimate of the Tax Amount based on the information available to it at that time
from its regularly employed accountant or accounting firm. Not later than the
time the Company’s federal income tax return for the year to which the Tax
Amount relates is filed, the Company shall distribute an amount, if any, equal
to the difference between the Tax Amount as calculated on the basis of the
information on such return and the partial distributions of that Tax Amount
previously made. If at the time of the filing of such return the Company
determines it has distributed more than the Tax Amount for the year to which the
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excess shall be treated as a partial distribution of the Tax Amount for the next
following taxable year.

ARTICLE X

BOOKS AND RECORDS

Section 10.1     Books, Records and Financial Statements.

(i)     At all times during the continuance of the Company, the Company shall
maintain, at its principal place of business, separate books of account for the
Company that shall show a true and accurate record of all costs and expenses
incurred, all charges made, all credits made and received and all income derived
in connection with the operation of the Company business in accordance with
generally accepted accounting principles consistently applied, and, to the
extent inconsistent therewith, in accordance with this Agreement. Such books of
account, together with a copy of this Agreement and of the Certificate, shall at
all times be maintained at the principal place of business of the Company and,
subject to the confidentiality provisions of this Agreement, shall be open to
inspection and examination at reasonable times by each Member and its duly
authorized representative for any purpose reasonably related to such Member’s
interest in the Company.

(ii)    The Company, and the Board on behalf of the Company, shall prepare and
maintain, or cause to be prepared and maintained, the books of account of the
Company. The Company, and the Board on behalf of the Company, shall prepare and
file, or cause to be prepared and filed, all applicable federal and state tax
returns.

Section 10.2     Accounting Method. For both financial and tax reporting
purposes and for purposes of determining Profits and Losses, the books and
records of the Company shall be kept on the accrual method of accounting applied
in a consistent manner in accordance with generally accepted accounting
principles and shall reflect all Company transactions and be appropriate and
adequate for the Company’s business.

Section 10.3     Financial Statements. The Officers shall cause to be prepared
and promptly delivered to the Members (a) unaudited quarterly financial
statements of the Company (reviewed by the independent certified public
accountant for the Company) within twenty-five (25) days immediately following
the end of each fiscal quarter of the Company and (b) audited annual financial
statements of the Company within fifty (50) days immediately following the end
of each fiscal year of the Company. Upon the request of one or more Members to
enable the Members to comply with regulatory reporting requirements, the Board
shall adjust the foregoing time periods if practical, with the incremental costs
associated therewith to be allocated as the Board determines.

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ARTICLE XI

TAX MATTERS

Section 11.1     Tax Matters Partner.

(i)     CCE is hereby designated as “Tax Matters Partner” of the Company for
purposes of § 6231(a)(7) of the Code. The Board may from time to time by a
Director Regular Vote require that the Tax Matters Partner submit to the Board
for prior approval such actions as may be designated by the Board.

(ii)    The Tax Matters Partner shall provide to each Member copies of all
notices or other information specified in and in accordance with Treasury
Regulation §301.6223(g)-1.

Section 11.2     Taxation as Partnership. The Company shall be treated as a
partnership for U.S. federal income tax purposes.

Section 11.3     Potential Conversion to Taxable Corporation Status. The Company
shall review and consider from time to time whether it should elect to be taxed
as a corporation under Subchapter C of the Code, given the types of assets it
holds, the income it produces, the impact of its income on the Members, the
indemnity costs incurred under Section 12.7, and the tax consequences of such an
election.

ARTICLE XII

LIABILITY, EXCULPATION, INDEMNIFICATION

AND OTHER BUSINESSES AND BUSINESS OPPORTUNITIES

Section 12.1     Liability. Except as otherwise expressly required by the
Delaware Act, the debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the Company, and no Member, Officer or Director shall be
obligated personally for any such debt, obligation or liability of the Company
solely by reason of being a Member, Officer or Director.

Section 12.2     Exculpation.

(i)     No Covered Person shall be liable to the Company or any other Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Covered Person in good faith on behalf of the
Company and in a manner reasonably believed to be within the scope of authority
conferred on such Covered Person by or pursuant to this Agreement, except that a
Covered Person shall be liable for any such loss, damage or claim incurred by
reason of such Covered Person’s gross negligence or willful misconduct.

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(ii)    A Covered Person shall be fully protected in relying in good faith upon
the records of the Company and upon such information, opinions, reports or
statements presented to the Company by any Person as to matters the Covered
Person reasonably believes are within such other Person’s professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Company, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, Profits, Losses or Net Cash Flow or any
other facts pertinent to the existence and amount of assets from which
distributions to Members might properly be paid.

Section 12.3     Fiduciary Duty.  To the extent that, at law or in equity, a
Covered Person has duties (including fiduciary duties) and liabilities relating
thereto to the Company or to any Member, Officer or Director, a Covered Person
acting under this Agreement shall not be liable to the Company or to any Member
or Manager for its good faith reliance on the provisions of this Agreement.

Section 12.4     Indemnification of a Covered Person. To the fullest extent
permitted by applicable Law, a Covered Person shall be entitled to
indemnification from the Company for any loss, damage or claim incurred by such
Covered Person by reason of any act or omission performed or omitted by such
Covered Person in good faith on behalf of the Company and in a manner reasonably
believed to be within the scope of authority conferred on such Covered Person by
this Agreement, except that no Covered Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Covered
Person by reason of gross negligence or willful misconduct with respect to such
acts or omissions; provided, however, that any indemnity under this Section 12.4
shall be provided out of and to the extent of Company assets only, and no
Covered Person shall have any personal liability with respect to such indemnity.

Section 12.5     Expenses of a Covered Person. To the fullest extent permitted
by applicable law, reasonable expenses (including reasonable legal fees)
incurred by a Covered Person in defending any claim, demand, action, suit or
proceeding shall, from time to time upon approval of the Board, be advanced by
the Company prior to the final disposition of such claim, demand, action, suit
or proceeding upon receipt by the Company of an undertaking, satisfactory to the
Board, by or on behalf of the Covered Person to repay such amount if it shall be
determined that the Covered Person is not entitled to be indemnified as
authorized in Section 12.4.

Section 12.6     Insurance. The Company may purchase and maintain insurance, to
the extent and in such amounts as the Board shall, in its sole discretion, deem
reasonable, on behalf of Covered Persons and such other Persons as the Board
shall determine, against any liability that may be asserted against or expenses
that may be incurred by any such Person in connection with the activities of the
Company or such indemnities, regardless of whether the Company would have the
power to indemnify such Person against such liability under the provisions of
this Agreement. The Company may enter into indemnity contracts with Covered
Persons and such other Persons as the Board shall determine and adopt written
procedures pursuant to which arrangements are made for the advancement of
expenses and the funding of obligations under Section 12.5 and containing such
other procedures regarding indemnification as are appropriate.

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Section 12.7     Indemnification of Certain State Tax Return Preparation and
Audit Expenses. The Company shall indemnify each Member against: (a) the
reasonable costs and expenses incurred, including but not limited to
professional fees incurred, by the Member for state tax return preparation and
the filing of such return or returns in one or more states of the United States
in which the Member would not be required to file such return or returns if the
Member were not a Member of the Company; and (b) the reasonable costs and
expenses incurred, including but not limited to professional fees incurred,
associated with any audit of any such return (or any audit asserting the Member
is required to file such a return), conducted by any such state’s revenue
authorities; provided, however, that in no event shall the Company be obligated
under this provision to reimburse a Member for any tax, interest or penalty
incurred by the Member in such state or states. The Member seeking
indemnification of any such costs or expenses shall submit to the Company a
written statement signed by the Member’s chief financial officer and its outside
accountants certifying that to the best of their knowledge and belief the Member
would not be required to file the return at issue in the state or states
involved if it were not a Member of the Company and itemizing the expenses
incurred. The Company shall, within 30 days after receipt of the foregoing
statement, pay or reimburse the Member for all such expenses to which the
Company does not object and shall list in a written notice to the Member its
objections to any of the expenses that it does not pay or reimburse. If the
Member and the Company can not resolve any dispute as to whether a cost or
expense is to be reimbursed or the amount to be reimbursed within 60 days after
the Company delivers its notice containing its objections, the matter shall be
eligible for arbitration under Section 16.3 at the request of the Member or the
Company. Any payment made by the Company under this Section 12.7 shall be
considered an expense of the Company (and not a distribution) and shall be
accounted for as such. Any indemnity under this Section 12.7 shall be provided
out of and to the extent of the Company assets only, and no Member or Affiliate
of a Member shall have any personal liability with respect to such indemnity.

Section 12.8     Business Activity That Does Not Compete with the Company and
Business Opportunities.

(i)     In the event the Company distributes or arranges for the distribution of
one or more products (each, a “Company distributed product”) as contemplated by
Section 3.3, then, subject to any contractual arrangements a Member entered into
prior to the date the Company commenced distributing or arranging for the
distribution of the Company distributed product (including test marketing of the
Company distributed product), for so long as such test marketing continues or
distribution continues, the Member shall not distribute within the United States
a product that is in the same product category as the Company distributed
product. A Member may extend a prior contractual arrangement and will not be in
violation of the limitations imposed by this Section 12.8(i). The determination
of whether a product is in the same product category as a Company distributed
product shall be made by a Director Regular Vote and such determination shall be
final and binding on the Company and the Members. The limitation imposed by this
Section 12.8(i) (a) may be waived as to a specific product and as to a specific
Member by a Director Extraordinary Vote; and (b) will be deemed to have been so
waived but only if the Member (1) gives the Company not less than 60 days’ prior
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of the Member’s intent to distribute a particular product before commencing
distribution, (2) agrees that its distribution will be through its DSD system
only, (3) agrees that its distribution will be limited to its Territory only,
and (4) provides to the Board during such 60 day period of time such information
as the Board or any Officer reasonably requests in order to review the request,
unless the Board, by a Director Extraordinary Vote, determines in good faith
within such 60 day period that the waiver of the restriction for that product
distribution should not be granted. No waiver granted under clause (a) or clause
(b) of the preceding sentence will restrict in any way the right of the Company
to distribute the Company distributed product which may compete with the
Member’s product in the Member’s Territory through a non-DSD method of
distribution.

(ii)    No Member or Affiliate thereof shall be obligated to present any
particular investment opportunity to the Company or to any other Member or
Affiliate thereof even if such opportunity is of a character that, if presented
to the Company, could be taken by the Company, and any Member or Affiliate
thereof shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
opportunity.

ARTICLE XIII

ADDITIONAL MEMBERS

Section 13.1     Admission. The Company is authorized to admit any Coca-Cola
Bottler which does not become an initial Member pursuant to Section 2.1(ii) as
an additional member of the Company (each, an “Additional Member” and
collectively, the “Additional Members”) upon a Director Regular Vote on such
terms and conditions as the Board shall specify in such vote. Each such
Coca-Cola Bottler shall be admitted as an Additional Member at the time such
Coca-Cola Bottler (i) satisfies any terms or conditions imposed by the aforesaid
vote of the Board; and (ii) executes this Agreement or a counterpart of this
Agreement; provided, that absent extraordinary circumstances as determined by
the Board, Additional Members will be admitted only as of the first day of a
fiscal year or quarter of the Company during 2003 and only as of the first day
of each fiscal year thereafter. The legal fees and expenses of the Company
associated with such admission shall be borne by the Company.

Section 13.2     Allocations. Additional Members shall not be entitled to any
retroactive allocation of the Company’s income, gains, losses, deductions,
credits or other items; provided that, subject to the restrictions of § 706(d)
of the Code, Additional Members shall be entitled to their respective share of
the Company’s income, gains, losses, deductions, credits and other items arising
under contracts entered into before the effective date of the admission of any
Additional Members to the extent that such income, gains, losses, deductions,
credits and other items arise after such effective date. To the extent
consistent with § 706(d) of the Code and Treasury Regulations promulgated
thereunder, the Company’s books may be closed at the time Additional Members are
admitted (as though the Company’s tax year had ended) or the Company may credit
to the Additional Members pro rata allocations of the Company’s income, gains,
losses, deductions, credits and items for that portion of the Company’s Fiscal
Year after the effective date of the admission of the Additional Members.

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ARTICLE XIV

TRANSFER OF INTERESTS AND SUBSTITUTE MEMBERS

Section 14.1     Transfers of Interests.

(i)     Transfer with Franchise and Within Controlled Group. A Member shall
transfer to any Person who acquires from such Member by purchase, exchange,
contract, or otherwise control (as described in the definition of Affiliate) of,
all or any portion of such Member’s Territory a proportionate share of such
Member’s Units. The determination by the President of the Company as to the
number of Units to be so transferred shall be consistent with the method used to
initially determine such Member’s Allocated Interest, but shall otherwise be
final and binding on the parties. Upon an affirmative Director Regular Vote, a
Member may: (a) transfer all or any portion of such Member’s Units to an entity
that both (i) holds a Coca-Cola franchise and (ii) is a member of the same
affiliated group within the meaning of section 1504 of the Code as the Member or
is owned wholly by one or more members of such affiliated group, and (b) cause
any such entity described in (a) to transfer all or any portion of such Units
back to the transferring Member or to any other entity described in (a).

(ii)    Transfer Under Section 5.4 or 6.10. All of a Member’s Units shall be
purchased by the Company and cancelled if the Member’s Units are to be purchased
by the Company under either Section 5.4 or 6.10. Upon such purchase, the Company
shall pay the Member the applicable purchase price of the Member’s Units
determined as provided herein and shall close the purchase as hereinafter
provided.

(a)         Return of Capital—Resignations. If a Member resigns under clause (i)
of the first sentence of Section 5.4, the purchase price for the Member’s Units
shall be the lesser of the amount paid by the Member as its Capital
Contribution, without interest, or the positive amount of its Capital Account as
of the effective date of the resignation. The Treasurer shall certify the amount
of the purchase price based upon the foregoing and the books and records of the
Company, which certification shall be, absent manifest error, final and binding
on the parties hereto, not subject to any appeal.

(b)        Appraisal Value—Removals. If a Member is removed from membership
pursuant to Section 6.10, the purchase price for the Member’s Units shall be the
Appraisal Value of the Member’s Units. For these purposes, the “Appraisal Value”
of a Member’s Units shall mean the product of (I) the amount in U.S. dollars
that the Members would receive upon a sale of all of the Units of the Company in
an arms’ length transaction between a willing buyer and a willing seller,
determined within sixty (60) days following the event giving rise to the
purchase obligation; and (II) the Percentage Interest in the Company represented
by the Units as to which the Appraisal Value is to be determined. The Appraisal

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Value shall be mutually agreed upon by the Member and the Company or, if the
Member and the Company are unable to agree within sixty (60) days following the
event giving rise to the purchase obligation, the Appraisal Value shall instead
be determined by an investment banking firm or other designated valuation expert
of recognized national standing jointly selected by the Member and the Company.
If the Member and the Company are unable to agree on an investment banking firm
or other valuation expert within the sixty (60) day period, they shall each
promptly designate an investment banking firm or valuation expert and those two
shall, in good faith, select a third investment banking firm or valuation expert
within 15 days of their designation. In the event that the Member should fail to
designate an investment banking firm or valuation expert for this purpose within
ten (10) days after the expiration of the sixty (60) day period, the Company
shall be entitled, in its sole discretion, to designate a single national or
international investment banking firm for purposes of determining the Appraisal
Value hereunder. In either case, the investment banking firm or valuation expert
so selected shall prepare an appraisal setting forth its determination of the
Appraisal Value, which determination shall be final and binding on the Member
and the Company. The cost of any such investment banking firms or valuation
experts shall be borne equally by the Member and the Company. The Member and the
Company shall cooperate fully in selecting investment bankers or other experts
and shall cooperate fully in the determination of the Appraisal Value by such
persons. The investment banking firm or valuation expert so retained to deliver
its written opinion as to the Appraisal Value shall be instructed to deliver
such opinion to the Member and Company within thirty (30) days following the
selection of such investment banking firm or valuation expert. In determining
Appraisal Value, no premiums for control nor discounts for lack of control or
lack of marketability shall be applied, and there shall be no requirement that
the assets and the Company be separately valued by third party appraisers or
that a special audit of the books and records of the Company be performed.. The
Appraisal Value as mutually agreed upon by the Member and the Company, or as set
forth in the written opinion of the investment banker or valuation expert, shall
be referred to herein as the “Value Opinion,” and shall be final and binding on
the parties hereto, not subject to appeal.

(c)         Fair Value—Certain Affiliations. If a Member is disqualified from
membership because it becomes affiliated with The Coca-Cola Company, the
purchase price for the Member’s Units shall be the Fair Value of the Units. For
these purposes, the “Fair Value” shall mean the fair market value of the
Member’s Units. The Company and the Member shall mutually agree upon the Fair
Value of the Units or if they are unable to agree within sixty (60) days
following the event giving rise to the purchase obligation, the Fair Value shall
instead be determined by a Director Extraordinary Vote. The Fair Value as so
determined shall be final and binding on the parties hereto, not subject to
appeal.

(d)        Closing of Purchase. The closing of any purchase and sale of a
Member’s Units pursuant to this Section 14.1(ii) shall be held at such time and

 

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place as may be designated by the Company, but in any event within thirty (30)
days after the amount of the purchase price is determined. At any such closing,
the Member required to sell its Units (the “Selling Member”) shall transfer to
the Company any certificates or documents evidencing the Units being purchased,
duly endorsed for transfer, together with such assignments or instruments
reasonably required by counsel for the Company to consummate such a purchase and
(ii) the Company shall pay the purchase price in cash. In addition, at the
closing of such purchase and sale, the Selling Member shall deliver to the
Company an executed, written representation, in form and substance reasonably
satisfactory to legal counsel for the Company, that the Selling Member owns the
Units being transferred free and clear of all liens and encumbrances and that
upon delivery of such Units to the Company, the Company shall be vested with all
of the Selling Member’s right, title and interest in such Units, and the Company
shall deliver to the Selling Member such investment representations as may be
reasonably necessary and requested for securities law purposes.

(iii)   No Other Transfer. A Member shall not transfer or assign any or all of
its Units other than as required or permitted under part (i) or (ii) of this
Section 14.1.

Section 14.2     Substitute Members. When a Member transfers any part of its
Units in the Company to the Person who acquires from such Member control of any
portion of the Member’s Territory, such transfer shall entitle the transferee to
become a Substitute Member. Upon the transferee’s execution of an instrument
reasonably satisfactory to the President of the Company accepting and agreeing
to the terms and conditions of this Agreement, including a counterpart of this
Agreement, and upon paying to the Company a fee sufficient to cover all
reasonable expenses of the Company in connection with such transferee’s
admission as a Substitute Member, such transferee shall become a Substitute
Member. In the event of a dispute as to whether a transaction, event or other
circumstance entitles a Person to qualify as a Substitute Member, such dispute
shall be resolved by a Director Regular Vote, subject to disqualification of any
Board member(s) representing a Bottler that has a material interest in the
dispute. Such transferee shall be admitted to the Company effective immediately
prior to the effective date of the transfer and, immediately following such
admission, if the transferring Member has transferred all of its Interest and
Units it shall cease to be a member of the Company. Until approved as a
Substitute Member, such transferee shall not be entitled to exercise or receive
any of the rights, powers or benefits of a Member other than the right to
receive the distributions to which the transferring Member would be entitled, if
any, the right to participate in the Company’s procurement function as provided
herein and the right to participate in any Company distributed product program
to the extent the transferring Member was so entitled.

Section 14.3     Recognition of Transfer by Company. No transfer, or any part
thereof, that is in violation of this Article XIV shall be valid or effective,
and neither the Company nor the Board shall recognize the same for the purpose
of making distributions of Net Cash Flow pursuant to Section 9.1 with respect to
such Interest or part thereof. Neither the Company nor the Board shall incur any
liability as a result of refusing to make any such distributions to the
transferee of any such invalid transfer.

 

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Section 14.4     Effective Date of Transfer. Any valid transfer of a Member’s
Interest pursuant to the provisions of Section 14.1 shall be effective as of the
close of business on the last day of the calendar month in which such transfer
occurs. The Company shall, from the effective date of such transfer, thereafter
pay all further distributions on account of the Interest so transferred to the
transferee of such Interest. As between any Member and its transferee, Profits
and Losses for the Fiscal Year of the Company in which such transfer occurs
shall be apportioned for federal income tax purposes in accordance with any
convention permitted under §706(d) of the Code and selected by the Treasurer.

Section 14.5     Pledge. No Member may pledge or otherwise encumber the whole or
any part of its Units without the prior written consent of the Board, which
consent may be given or withheld in the sole and absolute discretion of the
Board.

ARTICLE XV

DISSOLUTION, LIQUIDATION AND TERMINATION

Section 15.1     No Dissolution. The Company shall not be dissolved by the
admission of Additional Members or Substitute Members in accordance with the
terms of this Agreement.

Section 15.2     Events Causing Dissolution. The Company shall be dissolved and
its affairs shall be wound up only upon the occurrence of any of the following
events:

(i)     the affirmative vote of (a) a Director Extraordinary Vote and (b) the
Members pursuant to Section 5.1;

(ii)    at any time that there are no Members of the Company, including as a
result of the failure of the conditions set forth in Section 2.1, unless the
Company is continued in accordance with the Delaware Act;

(iii)   at any time, should The Coca-Cola Company acquire control of CCE
(control being defined as owning more than fifty percent (50%) of CCE’s voting
shares), upon the affirmative vote of a majority of the Regional Bottler
Directors and the Mainstream Bottler Directors; or

(iv)   the entry of a decree of judicial dissolution of the Company under
Section 18-802 of the Delaware Act.

Section 15.3     Liquidation. Upon dissolution of the Company, the Board shall
carry out the winding up of the Company and shall immediately commence to wind
up the Company’s affairs; provided, however, that a reasonable time shall be
allowed for the orderly liquidation of the assets of the Company and the
satisfaction of liabilities to creditors so as to enable the Members to minimize
the normal losses attendant upon a liquidation. The Members shall continue to
share Profits and Losses during liquidation in the same proportions, as
specified in Article VIII hereof, as before liquidation. The proceeds of
liquidation shall be distributed in the following order and priority:

 

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(i)     to creditors of the Company, including Members who are creditors, to the
extent otherwise permitted by law, in satisfaction of the liabilities of the
Company (whether by payment or the making of reasonable provision for payment
thereof); and

(ii)    to the Members in accordance with their relative positive Capital
Account balances, after giving effect to all contributions, distributions and
allocations for all periods.

Section 15.4     Termination. The Company shall terminate when all of the assets
of the Company, after payment of or due provision for all debts, liabilities and
obligations of the Company, shall have been distributed to the Members in the
manner provided for in this Article XV and the Certificate shall have been
canceled in the manner required by the Delaware Act.

Section 15.5     Claims of the Members. The Members and former Members shall
look solely to the Company’s assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and former
Members shall have no recourse against the Company or any other Member.

ARTICLE XVI

MISCELLANEOUS

Section 16.1     Notices. All notices provided for in this Agreement shall be in
writing, duly signed by the party giving such notice, and shall be delivered by
hand delivery, mailed via an overnight courier service, telecopied or mailed by
registered or certified mail, as follows:

(i)     if given to the Company at its address and telecopy number as shall be
notified to the Directors and Members;

(ii)    if given to a Director, at such Director’s mailing address or telecopy
number as provided to the Company; or

(iii)   if given to any Member at the address or telecopy number set forth in
the Schedule described in Section 2.1(iv) or on its signature page hereto, or at
such other address or telecopy number as such Member may hereafter designate by
written notice to the Company.

A notice shall be deemed given on the date delivered if delivered in person, on
the date of telephonic confirmation of receipt if sent by telecopier, or on the
date mailed or delivered to the courier service if mailed first class mail (with
postage prepaid) or delivered to an overnight courier service (with the fee
prepaid), and shall be deemed received on the date of personal delivery if
delivered in person, on the date of telephonic confirmation of receipt if
telecopied, on the tenth business day after having been mailed by certified or
registered mail if so mailed, and on the second business day after having been
sent by overnight courier if so couriered.

 

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Such notice shall be given at such other address as a party to this Agreement
may furnish to another party to this Agreement pursuant to the foregoing.

Section 16.2     Failure to Pursue Remedies. The failure of any party to seek
redress for violation of, or to insist upon the strict performance of, any
provision of this Agreement shall not prevent a subsequent act, which would have
originally constituted a violation, from having the effect of an original
violation.

Section 16.3     Cumulative Remedies. The rights and remedies provided by this
Agreement are cumulative and the use of any one right or remedy by any party
shall not preclude or waive its right to use any or all other remedies. Said
rights and remedies are given in addition to any other rights the parties may
have by Law or otherwise.

Section 16.4     Binding Effect. This Agreement shall be binding upon and inure
to the benefit of all of the parties and, to the extent permitted by this
Agreement, their successors, legal representatives and assigns.

Section 16.5     Interpretation. Throughout this Agreement, nouns, pronouns and
verbs shall be construed as masculine, feminine, neuter, singular or plural,
whichever shall be applicable. All references herein to “Articles,” “Sections”
and “Paragraphs” shall refer to corresponding provisions of this Agreement.
While this Agreement is to be interpreted to the extent feasible in a manner
consistent with the statement of principles attached as Exhibit A, to the extent
the terms of this Agreement and the terms of the statement of principles are
inconsistent, the terms of this Agreement shall control.

Section 16.6     Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted.

Section 16.7     Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all parties hereto had signed the same
document. All counterparts shall be construed together and shall constitute one
instrument.

Section 16.8     Integration. This Agreement constitutes the entire agreement
among the parties hereto pertaining to the subject matter hereof and supersedes
all prior agreements and understandings pertaining thereto.

Section 16.9     Governing Law. This Agreement and the rights of the parties
hereunder shall be interpreted in accordance with the laws of the State of
Delaware, and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.

Section 16.10   Amendments.

(i)     Except as otherwise provided in this Section 16.10, an amendment to this
Agreement shall be adopted and effective only if in writing and executed by the
holders

 

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of not less than ninety five percent (95%) of the outstanding Units of all the
Members; provided that the Members so adopting the amendment shall include not
less than a majority of the number of Mainstream Bottlers (without regard to the
number of Units held by such Members); and provided further that no amendment
shall adversely affect the interests of a Member who does not join in its
adoption unless such amendment will have the same effect on the interests of
similarly situated Members who do join in its adoption.

(ii)    An amendment to this Agreement may be adopted by a Director
Extraordinary Vote if such amendment would cause only the restructuring or
reorganization of the Company in a manner that the Board specifically determines
in such vote, is: (a) consistent with the economic and operational consequences
of this Agreement and the governance structure under this Agreement, (b) will
substantially enhance the efficient achievement of the Company’s goals with
respect to either of the businesses described in Section 3.3 or any new business
activity approved as provided in Section 6.10 (i) while not materially reducing
the Company’s ability to achieve, or making it materially more costly for the
Company to achieve, its objectives as to any of its other then existing lines of
business, (c) does not cause a greater than de minimis disadvantage to the
Company as compared to the consequences to the Company under the structure
created by this Agreement; and (d) does not cause a greater than de minimis
disadvantage to any Member as compared to the consequences to the Member under
this Agreement, except to the extent such Member knowingly waives such
disadvantages. The Board vote on the proposed restructuring or reorganization
shall be taken only after the Board has received a detailed analysis of the
proposal in light of these factors prepared by one or more Officers or
Committees as the Board shall commission to examine the proposal.

Section 16.11     No Implied Rights or Remedies. Nothing expressed or implied
shall be construed to confer upon any Person, except the Company and its
Members, Officers and Directors, any rights or remedies under or by reason of
this Agreement.

Section 16.12     Confidentiality.

(i)     The Members acknowledge that each of them may be required to disclose
Confidential Information (as defined in Section 16.12 (v)) to governmental
agencies or authorities by Law, upon the advice of counsel, and each shall
endeavor to limit disclosure to that purpose. Each Member will give the Company
prior written notice of any disclosure pursuant to this paragraph, which notice
shall specify the substance of any such disclosure.

(ii)    The Company and each Member will take appropriate steps to enable the
Company and other Members to identify information which should be protected as
Confidential Information.

(iii)   Each party receiving Confidential Information (the “Receiving Party”)
recognizes and acknowledges that the restrictions imposed upon the parties under
this

 

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Agreement are necessary to protect the secrecy of Confidential Information and
to prevent the occurrence of injury and harm.

(iv)   Each Receiving Party, whether the Company or a Member, agrees that it
will not, without the prior written consent of the party from whom such
Confidential Information was obtained (the “Disclosing Party”), disclose,
divulge or permit any unauthorized person to obtain any Confidential Information
disclosed by the Disclosing Party. The Receiving Party hereby agrees to
indemnify and hold harmless the Disclosing Party from and against any and all
damage, loss, liability and expense (including, without limitation, reasonable
expenses of investigation and reasonable attorneys’ fees and expenses) arising
from any such unauthorized disclosure by the Receiving Party or its personnel.
The Receiving Party agrees that it will use any Confidential Information
disclosed by the Disclosing Party hereunder (whether or not such Confidential
Information is in written or tangible form) only for purposes of the business of
the Company and its subsidiaries as contemplated by this Agreement.

(v)    As used in this Agreement, the term “Confidential Information” shall mean
information, including trade secrets, technical or non-technical data, a
formula, pattern, strategy, compilation, program, device, method, technique,
drawing, process, financial data, or list of actual or potential customers or
partners, which (a) derives economic value, actual or potential, from not being
generally known to other persons who can obtain economic value from its
disclosure or use, (b) is the subject of efforts which are reasonable under the
circumstances to maintain its secrecy, or (c) is specifically known to be or
identified as confidential information. “Confidential Information” shall not
include any information (w) which is or becomes generally known to the public
through no fault of the Receiving Party, (x) which is received without
restriction from a third party not bound by any duty of confidentiality with
respect to such Confidential Information, (y) which the Receiving Party
subsequently developed through its own efforts which can be documented as having
been developed without the use of any Confidential Information, or (z) which is
required to be disclosed by applicable Law, except to the extent eligible for
special treatment under an appropriate protective order or otherwise.

Section 16.13   Arbitration. In the event of a dispute between a Member and the
Company or between Members regarding the construction of this Agreement or the
rights and obligations of the Company and the Members hereunder or the
performance of those obligations, either party may initiate arbitration by
giving written notice to the other party of its demand to arbitrate the issue
and designating one arbitrator. The other party shall select an arbitrator
within ten (10) days of delivery of the notice. Those two arbitrators shall then
select within ten (10) days a third arbitrator. The governing law for the
arbitration shall be the substantive law of the State of Delaware. The
arbitration shall be held in Atlanta, Georgia, or such other place in the United
States as may be specified by the arbitration panel (or in any other place as
may be agreed upon by the parties to the arbitration proceeding) and shall be
conducted in accordance with the then effective Commercial Arbitration Rules of
the American Arbitration Association to the extent not inconsistent with this
Agreement. The decision of the Arbitration Panel shall be rendered no later than
forty-five (45) days after the date on which the parties agree to arbitration.

 

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The decision of the Arbitration Panel shall be final and binding as to any
matters submitted to arbitration; provided, however, that if necessary such
decision may be enforced by any party to the arbitration in any court of record
having jurisdiction over the subject matter or over any of the parties. The
determination of which party or combination of parties bears the costs and
expenses incurred in connection with any such arbitration proceeding shall be
determined by the Arbitration Panel. For the avoidance of doubt, business
disagreements, such as whether the Company should adopt a certain course of
action or the appropriate sanction to be imposed by the Company under Section
6.10(vi), are not eligible for arbitration, it being the intention of the
parties that the all such disagreements be resolved and such sanctions be
finally determined by the applicable action taken by the Board.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above stated.

 

Exhibit A

—

Statement of Principles

Exhibit B

—

List of Coca-Cola Bottlers

Exhibit C

—

Coca-Cola Products Currently Distributed

Exhibit D

—

Initial National Bottler Directors, Regional Bottler Directors and Mainstream
Bottler Directors; Identification of initial Regional Bottlers

 

 

COCA-COLA BOTTLERS’ SALES & SERVICES
COMPANY LLC

 

By: 

 

 

 

--------------------------------------------------------------------------------

 

 

 

Name: 

 

 

 

Title:

 

 

 

 

 

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[Signature pages of Members follow]

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Member Signature Page to Limited Liability Company Operating Agreement of
Coca-Cola Bottlers’ Sales & Services Company LLC dated as of January 1, 2003

By executing this Agreement, Member represents and warrants to, and agrees with,
the Company as follows:

1. This Agreement has been duly and validly authorized, executed and delivered
on behalf of Member and is a valid and binding agreement of Member enforceable
in accordance with its terms. Member or its affiliates is a Coca-Cola Bottler,
as defined herein.

2. Units will be acquired solely for Member’s own account for investment
purposes only, and not with a view to or for resale or distribution. Member
understands that Units have not been registered under the Securities Act of
1933, as amended (the “Securities Act”) or any State’s securities laws (the
“Blue Sky Laws”) in reliance in part on the representations of Member contained
herein. Member will not sell, transfer or otherwise dispose of Units unless such
sale, transfer or disposition is subsequently registered under the Securities
Act and the Blue Sky Laws, or unless the Company, with the advice of its legal
counsel, determines that exemption(s) from such registration are available under
the Securities Act and the Blue Sky Laws. No federal or state agency or
securities exchange has recommended or endorsed the purchase of Units. Member
acknowledges that Units must be transferred under this Agreement to the acquirer
of all or a portion of Member’s or its Affiliates’ Territory and to the Company
under certain circumstances, and may not otherwise be sold, transferred, pledged
or otherwise assigned.

3. Member is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D under the Securities Act because Member qualifies under clause(s) v
below: (i) A natural person whose individual net worth, or joint net worth with
that person’s spouse, exceeds $1,000,000 at the time of purchase; (ii) A natural
person whose individual income (not including that of his or her spouse) was in
excess of $200,000 in 2000 and 2001, or joint income with his or her spouse was
in excess of $300,000 in each of those years, and who reasonably expects the
same income level in 2002; or (iii) An organization described in section
501(c)(3) of the Internal Revenue Code, a corporation, a Massachusetts or
similar business trust, or partnership or limited liability company, not formed
for the specific purpose of acquiring Units, with total assets in excess of
$5,000,000; (iv) A trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring Units, whose purchase is directed by a
person who, either alone or together with his or her purchaser
representative(s), has such knowledge and experience in financial and business
matters that such person is capable of evaluating the merits and risks of the
prospective investment; or (v) An entity (other than an irrevocable trust) in
which all of the equity owners are accredited investors. (If Clause (v) is
selected, all equity holders of Member must execute the attached Equity Holders
Certification.)

4. Until written notice of a new address is given by Member, the following is
the address and telecopy number for all notices to be given to Member under this
Agreement: 4100 Coca-Cola Plaza, Charlotte, N.C. 28211-3481. Telecopy No.:
704-557-4455.

 

 

 

 

 

 

Date:

 December 11

, 2002

 

 

 

 

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CONSOLIDATED BEVERAGE CO., a Delaware
corporation and wholly-owned subsidiary and Affiliate of
Coca-Cola Bottling Co. Consolidate

 

 

 

 

 

 

BY:

 

 

 

--------------------------------------------------------------------------------

 

 

PRINT NAME:

WILLIAM B. ELMORE, PRESIDENT

 

 

--------------------------------------------------------------------------------

 

 

TITLE:

 

 

 

--------------------------------------------------------------------------------

NOTE: FILL IN BLANK IN PARAGRAPH 3 WITH APPLICABLE REFERENCE; COMPLETE ALL
REQUESTED INFORMATION IN PARAGRAPH 4; AND COMPLETE REQUESTED INFORMATION IN
SIGNATURE BLOCK.

 

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Equity Holders Certification of Accredited Investor Status

If Clause (v) of Section 3 is initialed above for a Member, all equity holders
of that Member should please complete the following: The undersigned, being all
of the equity owners of Consolidated Beverage Co. represent and warrant to the
Company that each undersigned is an “accredited investor” because the
undersigned satisfies clause(s) V of Section 3 above.

 

 

 

 

 Coca-Cola Bottling Co. Consolidated

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

Signature

 

 

 

 

 William B. Elmore, President and Chief Operating

 

 

 

 Officer of Coca-Cola Bottling Co. Consolidated

 

 

 

--------------------------------------------------------------------------------

 

 

 

Print Name

 

 

 

 

 

 

Date:

 December 11,

, 2002

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

Signature

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

Print Name

 

 

 

 

 

 

Date:

 

, 2002

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

Signature

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

Print Name

 

 

 

 

 

 

Date:

 

, 2002

 

 

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[ATTACH ADDITIONAL PAGES AS NECESSARY]

 

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EXHIBIT A

STATEMENT OF PRINCIPLES

NEWCO:

I.         PREAMBLE

•         NEWCO’s constitution would be to form an improved Coca-Cola Bottler
System in the USA. NEWCO would strive to establish a more efficient franchise
system, reduce costs, be innovative and provide speed to market, plan for
reduced capital investment, provide enhanced services to Bottlers and customers
and grow a close mutually beneficial relationship with TCCC. NEWCO would strive
to develop and manage a profitable alternative routes to market business, while
simultaneously enhancing, rather than detracting from the value of each
Bottler’s existing business.

II.        GENERAL:

•         NEWCO is to be organized as a new, separate legal entity. If feasible
it would be organized as a Delaware limited liability company and a passthrough
entity for tax purposes.

•         Existence to be perpetual but subject to an exit/termination strategy
on a vote of its members.

•         All USA Bottlers to be invited and encouraged to join NEWCO. Only a de
minimus membership fee will be required to participate in the procurement
services and alternative route to market function of NEWCO. However, costs of
administration will be allocated to members. Members will be asked to sign a
membership agreement, but that agreement will cover only NEWCO governance
matters and will not contain any conditions that will require members to give up
any existing rights or modify their existing business in any way, except that
member will be asked to agree to restrictions on their ability to compete with
NEWCO in the product categories pursued by NEWCO.

•         Bottler members will be asked to participate in and support all of
NEWCO’s initial functions, i.e., procurement, management of new products and
alternative routes of distribution, and customer management of NEWCO’s products.
Such participation would be voluntary and would not be a contractual condition
of membership.

•         A Bottler member would not be able to transfer its membership or
ownership interest unless it were selling its USA Coca-Cola bottling business.
The bottler’s Coca-Cola franchise and the bottler’s NEWCO membership interest
are intended to be tied together.

•         NEWCO would maintain a close working relationship with The Coca-Cola
Company with the objectives of maximizing System efficiencies and brand growth.

•         NEWCO will not own trademarks. TCCC will be the trademark owner of
NEWCO’s products.

•         Equity in NEWCO would be divided among USA Bottler members on the
basis of an arithmetic average of total volume of Coca-Cola products and
population in Coca-Cola exclusive territories during the most recent available
year (2001, if 2002 data is not available at the inception).

•         NEWCO’s Board could have 16 members:

 

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CCE – 50% of members and total vote. A CCE director could have a proxy for all
eight of CCE’s votes.

Second through seventh largest bottlers – 1 seat and vote each.

Mainstream bottlers to have two seats and two votes.

1.         Actions of the Board generally will require approval by two-thirds
(11 votes) of the Board, except that selected matters, such as expansion into
new businesses or liquidation, will require an 80% vote.

•         Committees elected by the Board to be established and responsible for
NEWCO’s major functions, e.g., procurement, management of alternative
distribution systems, etc.; under appropriate circumstances, Board committees
may include non-Board members (e.g., CCF representative for procurement of HFCS,
TCCC representative on routes to market, etc.)

•         After an initial transition period in which NEWCO would be staffed
with employees loaned from TCCC, CCE and CCBA, NEWCO will design, develop and
fund its own employee benefit programs. Because a substantial portion of NEWCO’S
initial staff will come from CCE, NEWCO will seek to duplicate CCE’s benefit
programs to the maximum extent possible. NEWCO’s employees will be expected
always to act in the best interests of NEWCO and all its members.

•         NEWCO would have separate facilities and its own operating budget.

•         NEWCO Board will determine how much of its profits, if any, to
distribute. The expectation is that it will split its profits among all Bottler
members based upon each Bottler’s equity ownership in NEWCO. It will be decided
if an independent audit function will be necessary, given the variety of
services offered by NEWCO.

III.      NEW PRODUCTS FUNCTION

•         Prior to its formation, NEWCO will seek a written understanding with
The Coca-Cola Company that it will collaborate with NEWCO’s management in
selecting the best route to market for new products not best suited for the DSD
system, and will offer those new products, which would be best distributed
outside the DSD system, on a basis that NEWCO or the bottlers will participate
economically in their distribution. The letter of understanding would express
TCCC’s understanding that the marketing arrangements must be mutually
advantageous from an economic perspective, reflecting contribution of value and
a fair balance of economic interests. The letter of understanding between NEWCO
and TCCC would recite that all existing contractual commitments to bottlers,
including commitments relative to line extensions, would remain in full force
and effect , confirming that TCCC will continue to bring CSD’s and cold fill NCB
products directly to Coca-Cola Bottlers. NEWCO’s objective will be to assure
that all future TCCC products would either be distributed by the bottlers or
distribution would be managed by NEWCO.

•         NEWCO would negotiate all contracts with The Coca-Cola Company,
including pricing, funding, and other terms and conditions, relating to products
distributed under NEWCO’s management. Pricing by TCCC would reflect a fair share
of economic profit within the value chain.

•         NEWCO’s Board would then evaluate and determine the distribution
system that would maximize the potential of the new TCCC brand or product, to
the extent consistent with the overall best interests of the bottling system.
NEWCO’s options would include everything from distribution exclusively by
bottlers, to distribution entirely through warehouses or third parties, to
hybrid systems. Distribution of NEWCO’s products would not necessarily be
restrained by an exclusive territory system, although exclusive territory
arrangement

 

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with bottlers in certain channels might be a potential feature of some
arrangements. NEWCO could ask bottlers to provide non-distribution services for
these products (e.g., production, sales and merchandising), but the decision to
provide those services or not would rest with individual bottlers and would not
be a condition of continuing membership in NEWCO. If a bottler refused or could
not come to terms in providing such services, NEWCO could retain a third party
to perform such services.

•         Bottler members who do not do the actual production/distribution of
NEWCO products in their Coca-Cola exclusive territories could receive fair
compensation, e.g., by the growth in the value of their equity in NEWCO or by a
fee (if NEWCO’s product is damaging the local bottler’s core business) . . . to
be decided in the best judgment of NEWCO’s Board of Directors. If a fee is
offered, bottlers would be fairly and equitably compensated and NEWCO would be
obligated to treat all bottlers alike in such arrangements.

•         If NEWCO determines that a non-CSD product would be best produced
and/or distributed by Bottler members under perpetual contracts with exclusive
territories, it would so advise TCCC. TCCC would be asked to abide by such
determinations by NEWCO’s board.

•         If bottler distribution in a DSD system is determined to be
sub-optimum, NEWCO’s Board would choose the best alternative distribution method
and strategy for each new TCCC licensed non-CSD product, judged in relationship
to the overall interests of the bottling system, based upon the product, the
product category, package, channel and geography, with a view toward maximizing
the growth of the product. Some products could be distributed entirely outside
the Bottler system, e.g., by the use of warehouse delivery, third-party brokers,
beer and liquor distributors or dairy distributors.

•         NEWCO’s Board would make production decisions for each NEWCO product
on a case by case basis, with a view toward maximum efficiencies, low cost, and
avoidance of unnecessary capital expenditure. Production could be by Bottler
members, by Bottler non-members, by contract packers, or a combination.

IV.      PROCUREMENT FUNCTIONS

•         NEWCO would form a procurement department, using transferred resources
from CCE, Consolidated, CCBA and TCCC to provide procurement services available
to all U. S. bottlers and production coops

•         NEWCO would initially focus on major product components and cost of
goods elements (cans, sweetener, closures, secondary packaging, labels, etc.),
but could expand over time to cover other items. Functions and products provided
by Western Sales could be folded in over time with full integration.

•         All Bottler members in the procurement program would share equally in
program benefits and would get pricing determined on a comparable basis,
regardless of size, i.e., a most favored nations concept.

•         Policies relative to freight equalization, back haul allowances, price
equalization, length of required contractual commitments, etc., would be made on
a commodity-by-commodity basis by Board/Subcommittee based on industry practice,
competitive impact and impact on program and on individual bottlers, similar to
current CCBA practices.

•         CCBA and CCE potentially would make separate decisions relative to
billing practices and equalization/adjustment to CCBA members or to CCE
divisions.

 

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•         Strict confidentiality is to be maintained regarding supplier pricing
– NEWCO to rigidly ensure that only persons with “a need to know” would have
access to pricing details.

•         In addition to direct materials, it is anticipated that NEWCO would
also develop and administer a cold drink equipment program.

•         NEWCO might not initially handle payables and receivables in its
procurement program. Suppliers will be told to bill CCE and CCBA and they will
handle the transactional accounting.

•         Coca-Cola Fountain and TCCC’s Global P&T group will be eligible to
participate in NEWCO’s HFCS procurement program.

•         NEWCO could be accountable for managing incoming transportation
logistics and handling for all major procurement items and for assisting with
supply chain management needs of bottlers. Over time, NEWCO would be expected to
build transportation logistics and procurement capabilities that could be
expanded to cover downstream transportation logistics.

V.        OTHER

•         NEWCO’s initial role relative to customers shall be confined to
exploration of possible arrangements with customers relative to the sale of
NEWCO-managed beverages, in close collaboration with the sales activities of
CCNA, CCE and the Bottling system relating to non-NEWCO beverages sold by the
Coca-Cola system. Over time, NEWCO, its Board and its members will continue to
explore opportunities for NEWCO to serve a positive role in providing better and
more efficient customer service, while preserving the value and the independence
of the bottling system and its exclusive territories.

•         NEWCO, to the extent directed by its Board, will evaluate options for
developing and operating shared service platforms which may be useful to both
NEWCO and the bottling system in their operations, including shared services
functions in the IS (including customer information), transactional accounting
and HR record-keeping and administration areas.

VI.      WHAT NEWCO IS NOT

•         NEWCO will not involve itself in the relationship between TCCC and the
bottling system as it relates to core (including cold-fill NCBs) CSDs and other
products currently under contract; the CSD/DSD business system will remain
intact and will not be affected. Over time, if NEWCO is successful and as it
generates further learnings, certain non-core brands currently distributed by
bottlers may become candidates for consideration for NEWCO distribution
management, subject to all existing bottler contracts.

•         NEWCO will not initially engage in the production or distribution of
beverages, except as deemed appropriate by the Board relating to NEWCO managed
beverages. NEWCO will develop a knowledge base and capabilities in understanding
non-traditional (i.e., non-bottler) production and distribution operations and
options, through its fulfillment of its role in securing production and
distribution services for NEWCO beverages, and will serve as a resource to TCCC
and the Bottling system in understanding such operations.

 

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EXHIBIT B

U.S. COCA-COLA BOTTLERS

ABARTA Beverages

Aberdeen Coca-Cola Bottling Company, Incorporated

Ada Coca-Cola Bottling Company & Shawnee Bottling Company

Atlantic Bottling Company

Big Springs, Inc.

Bink’s Coca-Cola Bottling Company

Cedar City Coca-Cola Bottling Co.

Cen-Tex Coca-Cola Bottling Company & Sooner Coca-Cola Bottling Company

Central Coca-Cola Bottling Company, Inc.

Chesterman Co.

Coca-Cola Bottling Co. (Williston, ND)

Coca-Cola Bottling Co. Consolidated

Coca-Cola Bottling Co. of Butte, Montana

Coca-Cola Bottling Co. of Dickinson

Coca-Cola Bottling Co., Columbus-Indiana-Inc.

Coca-Cola Bottling Co.-Yakima & Tri Cities, Inc.

Coca-Cola Bottling Company High Country

Coca-Cola Bottling Company of Bemidji, Incorporated

Coca-Cola Bottling Company of Crockett

Coca-Cola Bottling Company of Glasgow

Coca-Cola Bottling Company of Hot Springs, Inc.

Coca-Cola Bottling Company of International Falls

Coca-Cola Bottling Company of Minden, Incorporated

Coca-Cola Bottling Company of Pottsville

Coca-Cola Bottling Company of Red Wing, Incorporated

Coca-Cola Bottling Company of Santa Fe, Inc.

Coca-Cola Bottling Company of Southeastern New England, Inc.

Coca-Cola Bottling Company of Vernal, Utah

Coca-Cola Bottling Company of Virginia

Coca-Cola Bottling Company of Washington, N.C., Inc.

Coca-Cola Bottling Company of Winona

Coca-Cola Bottling Company United, Inc.

Coca-Cola Bottling Company, Kokomo, Ind., Inc.

Coca-Cola Bottling of Emporia, Inc.

Coca-Cola Bottling Works of Pulaski, Tennessee, Incorporated

Coca-Cola Bottling Works of Tullahoma, Inc.

Coca-Cola Enterprises Inc.

Corinth Coca-Cola Bottling Works, Inc.

 

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Decatur Coca-Cola Bottling Company

Deming Coca-Cola Bottling Company

Douglas County Bottling Company

Durango Coca-Cola Bottling Co.

Durham Coca-Cola Bottling Company

Farmington Coca-Cola Bottling and Distributing Co.

Gardner Enterprises, Inc

Glendive Coca-Cola Bottling Co., Inc.

Great Plains Coca-Cola Bottling Company

Hancock Bottling Co., Inc.

Idabel Coca-Cola Bottling Company, Inc.

Jefferson City Coca-Cola Bottling Co.

Ketchikan Soda Works Inc.

Lehrkind’s Incorporated

Louisa Coca-Cola Bottling Company

Love Bottling Co.

Lufkin Coca-Cola Bottling Company

Macon Coca-Cola Bottling Company

Magnolia Coca-Cola Bottling Company, Inc.

Maui Soda & Ice Works, Ltd.

Meridian Coca-Cola Bottling Company

Middlesboro Coca-Cola Bottling Works

North East Mississippi Coca-Cola Bottling Company, Inc. &

   Western Kentucky Coca-Cola Bottling Company, Inc.

Northern Neck Coca-Cola Bottling, Inc.

Orangeburg Coca-Cola Bottling Company

Ozarks Coca-Cola/Dr Pepper Bottling Company

Rock Hill Coca-Cola Bottling Co.

Sacramento Coca-Cola Bottling Co., Inc.

Sanford Coca-Cola Bottling Company

Sitka Bottling Company

Swire Pacific Holdings Inc.

The Coca-Cola Bottling Company of Fort Smith, Arkansas

The Coca-Cola Bottling Company of Northern New England, Inc.

The Coca-Cola Bottling Company of Winfield, Kansas

The Odom Corporation

The Philadelphia Coca-Cola Bottling Company

Trenton Coca-Cola Bottling Company, L.L.C.

Union City Coca-Cola Bottling Company, LLC

Viking Coca-Cola Bottling Company

Wilson Corporation

 

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EXHIBIT C

SELECTED U.S. BRANDS

 

Coca-Cola

Coca-Cola classic

caffeine free Coca-Cola

caffeine free Coca-Cola classic

diet Coke

caffeine free diet Coke

diet Coke with Lemon

Cherry Coke

diet Cherry Coke

Vanilla Coke

diet Vanilla Coke

 

Allied brands (bottle/can products), including diet/light versions and flavors:

AquaPure

Barq’s (root beer and crème soda)

Carver’s Original Ginger Ale

Chippewa Natural Spring Water

Citra

Cumberland Gap Mountain Spring Water

Dasani

Delaware Punch

Evian

Fanta

Five Alive

Fresca

Fruitopia

H2OK

Hi-C

KMX

Mad River

Manzana Mia

Mello Yello

Minute Maid (soft drinks/Adult Refreshment, juices/juice drinks/Juices To Go)

Nestlé Choglit

Nestea (iced teas)

Nestea Cool and Cool from Nestea

 

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Northern Neck Ginger Ale

Mr. PiBB and PiBB Xtra

Planet Java

POWERADE

Red Flash

Seagram’s (mixers)

Sprite

Surge

TAB

 

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EXHIBIT D

INITIAL NATIONAL BOTTLER DIRECTORS, INITIAL REGIONAL BOTTLER DIRECTORS AND
INITIAL MAINSTREAM BOTTLER DIRECTORS; IDENTIFICATION OF INITIAL REGIONAL
BOTTLERS

 

I.              NATIONAL BOTTLER DIRECTORS

 

                Coca-Cola Enterprises Inc.:

                Norman P. Findley, Chairman

                John R. Alm

                William A. Holl

                Robert F. Gray

 

II.            REGIONAL BOTTLERS AND REGIONAL BOTTLER DIRECTORS

 

                Coca-Cola Bottling Company Consolidated:

                William B. Elmore, Jr.

 

                The Philadelphia Coca-Cola Bottling Company:

                Ron D. Wilson

 

                Coca-Cola Bottling Company United, Inc.:

                Claude B. Nielsen

 

                Swire Coca-Cola USA:

                Jack Pelo

 

                The Coca-Cola Bottling Company of Northern New England:

                Wesley C. Elmer

 

                Great Plains Coca-Cola Bottling Company:

                Robert F. Browne

 

III.           MAINSTREAM BOTTLER DIRECTORS:

 

                Chesterman & Co.:

                Cy Chesterman

 

                Coca-Cola Bottling Company of Santa Fe, Inc.:

                Ron Hart