EXHIBIT 10.1
SWEETENER SALES AGREEMENT - BOTTLER
This agreement ("Agreement") made and entered into this 14th day of
October, 2002, by and between The Coca-Cola Company, a Delaware corporation
("Company"), through its Coca-Cola North America Division, and Coca-Cola
Enterprises Inc., a Delaware corporation, including its United States bottling
subsidiaries (collectively "Bottler").
WITNESSETH:
WHEREAS, Company has otherwise granted Bottler the right to manufacture
from concentrate and/or beverage base certain carbohydrate sweetened soft drink
beverages and/or syrups ("Products") under the one or more agreements
("Authorization Agreements");
WHEREAS, Bottler plans to purchase carbohydrate sweeteners for use in
its manufacture of Products and not for resale or delivery to a third party;
WHEREAS, Company is engaged in the procurement of carbohydrate
sweeteners for its own purposes and has acquired certain skill and knowledge in
connection therewith;
WHEREAS, Bottler desires to take advantage of the skill, knowledge and
services of Company in the procurement of carbohydrate sweeteners;
WHEREAS, subject to the terms and conditions of this Agreement, Bottler
is willing to purchase carbohydrate sweeteners from Company and Company is
willing to sell carbohydrate sweeteners to Bottler;
NOW, THEREFORE, in consideration of the premises hereof and of the
mutual promises contained herein, the parties hereto agree as follows:
Section 1. Definitions.
As used in this Agreement, the following terms have the specified
meanings:
a. "Originating Supplier" means the carbohydrate
sweetener supplier which sells the sweeteners to or
processes the sweeteners for Company.
b. "Sweeteners" means carbohydrate sweeteners derived
from sugar cane, sugar beet, corn or other source(s)
approved by Company.
c. "Bottler Customer" means any bottler of Company for
whom Bottler manufactures carbohydrate sweetened soft
drink beverages and/or syrups using Sweeteners
delivered hereunder.
Section 2. Authorization.
For purposes of Bottler's compliance with sweetener quality assurance
requirements independently established by Coca-Cola North America, Company will
be deemed an approved supply point for Sweeteners furnished hereunder for
Bottler's manufacture of Products from concentrate and/or beverage base. Nothing
in this Agreement will be construed to authorize Bottler to purchase or use any
concentrate or beverage base in the manufacture of syrups or beverages.
Section 3. Purchase, Sale and Usage of Sweeteners.
Company will sell to Bottler and Bottler will buy from Company all
Bottler's requirements for Sweeteners. Bottler will use the Sweeteners only in
its own manufacturing operations in the manufacture of products of Company and
approved non-Company products for itself and approved Bottler Customers. Bottler
will not resell or arrange for the delivery to any third party of Sweeteners
covered by this Agreement. Approval of each Bottler Customer and each
non-Company product will be within the sole discretion of Company. Company and
Bottler shall in good faith continue joint efforts towards strategy development,
program performance management and program administration.
The Sweeteners will conform to the specifications in effect between
Company and the Originating Supplier(s) as may from time to time be revised by
Company (the "Specifications"). The Specifications (which may also include
quality control requirements for Sweeteners as set forth in Section 6 below)
will be automatically incorporated herein by reference and made a part hereof.
Company will request and Bottler will furnish a good faith forecast of
its requirements for Sweeteners ("Forecast") no later than October 1 of the year
preceding the calendar year of Sweetener delivery. The Forecast will set forth
the types and quantities of Sweeteners for each receiving location, for the
calendar year and by delivery month. The Forecast will list by name all proposed
Bottler Customers and all proposed non-Company products, and state the quantity
for the calendar year of each type of Sweetener for all Bottler Customers,
collectively, and for all non-Company products, collectively. Subject to
Company's written approval, the Forecast (as amended to subtract quantities of
Sweeteners allocable to any non-approved Bottler Customers and/or non-Company
products) will be incorporated herein by reference and made a part hereof
("Approved Forecast"). Bottler will promptly advise Company of any proposed
amendment to the Approved Forecast, including any proposed change to the list of
Bottler customers and non-Company products identified in the Approved Forecast.
If approved in writing by Company, the Approved Forecast will be further amended
as requested by Bottler (or as otherwise agreed by the parties in writing), will
become the Approved Forecast, and will be incorporated herein by reference and
made a part hereof. Bottler will be obligated to purchase the stated aggregate
quantity for each type of Sweetener listed in the Approved Forecast, plus or
minus 5%. If Company does not approve in writing the Forecast within 30 days of
Company's receipt of the Forecast from Bottler, the Forecast will be deemed
approved by Company and become the Approved Forecast. If Company does not
approve in writing any proposed amendment to the Approved Forecast within 30
days of Company's receipt of said amendment from Bottler, said amendment will be
deemed approved by Company and will become the Approved Forecast.
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If, without the express written approval of Company, Bottler fails to
comply with any provision of this Section 3, Company may, without liability or
advance notice, either terminate this Agreement or reduce one or more future
deliveries of Sweeteners hereunder such that the aggregate deliveries to Bottler
during any calendar year do not exceed Bottler's actual requirements for use in
its manufacture of Company and approved non-Company products for itself and
approved Bottler Customers.
Section 4. Pricing.
Company will furnish price quotations based upon Bottler's instructions
as to date of pricing, quantity to be delivered and delivery period based on the
Approved Forecast. The quantity specified by Bottler will be substantially in
accordance with the monthly quantities set forth in the Approved Forecast.
Bottler's acceptance of Company's quotations will establish the price and the
quantity for delivery hereunder for the affected delivery period. For pricing
purposes, the delivery period will be one or more whole calendar months. If
Bottler has not furnished said instructions by 30 days prior to a calendar
month, then the price for that month will be as established by Company based on
market conditions existing at that time for the quantities to be delivered and
the delivery period. However, if market conditions indicate a delay in pricing,
the Company may waive the 30-day requirement. In the event Bottler has not
otherwise specified the quantity to be delivered prior to the date that pricing
is established, the quantity will be that set forth in the Approved Forecast.
Company reserves the right upon written notice (the "Charge Notice")
given on or before August 1 of any year during the term of this Agreement to
elect to charge Bottler an amount for Company's services under this Agreement
(the "Services Charge"), which may take effect no earlier than January 1 of the
year immediately following the year in which a Charge Notice is delivered. The
Services Charge will take effect on and be due and payable beginning January 1
of the year immediately following the year in which a Charge Notice is delivered
(or such later date as may be specified in the Charge Notice), provided that
Bottler may in its sole and absolute discretion give notice within thirty days
of the Services Charge being determined that Bottler does not accept the
Services Charge, in which event this Agreement shall terminate upon the later of
January 1 of the year immediately following the year in which the Charge Notice
at issue was delivered (or such later date as may have been specified in the
Charge Notice at issue) or the date of Bottler's notice to decline acceptance of
the Services Charge. Any termination under this Section 4 by Bottler upon
receipt of a Charge Notice will be without penalty or charge to Bottler.
Section 5. Invoicing and Payment.
Company will invoice Bottler based on the payment terms in effect
between the Originating Supplier(s) and Company. Invoices shall be for the net
amount charged to Company with any and all customary discounts available to
Company having been applied when determining the price to Bottler, subject to a
reasonable reserve for beginning-of-the-year accruals determined in accordance
with GAAP (which ultimately shall be reversed) and any other reserves mutually
agreed to between Company and Bottler. Except as permitted by Section 4, Company
will not charge Bottler any amount for procuring Sweeteners under this
Agreement. The price charged to Bottler will be the same effective price paid by
Company, and Bottler shall have the benefit of all enhancements, promotions,
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discounts, rebates, price reductions, or other price adjustments of any form or
nature (whether in the form of monetary adjustments or non-monetary benefits).
Company will maintain records generated in Company's normal course of business
in accordance with applicable laws to substantiate that Company has complied
with this Section 5, and will make said records available to Bottler upon
reasonable request and reasonable advance notice.
Section 6. Delivery.
Delivery hereunder will commence with the first calendar month set
forth in the Approved Forecast and continue until this Agreement terminates as
provided in Section 8 below. No later than the date of Company's quotation, the
parties hereto will establish the terms of delivery which depend upon the type
of Sweeteners and the Originating Supplier. If not otherwise established at the
time, price quotations and established pricing will be predicated upon Company's
delivery terms in effect with the Originating Supplier, adjustments to be made
by Company in accordance with terms for delivery to Bottler. Final scheduling of
deliveries will be arranged by Bottler either directly or indirectly (as
specified by Company), with the Originating Supplier.
Section 7. Quality.
Bottler agrees to comply strictly with the terms of the Specifications,
and any requirements independently issued by Coca-Cola North America to bottlers
of Company, relating to quality control with respect to Sweeteners, which terms
and requirements, if any, or any reissue thereof by Company, are made an
integral part of this Agreement. Bottler also agrees to submit samples of
Sweeteners in accordance with instructions as may be given by Company. Bottler
agrees to defend, indemnify and hold Company harmless against loss, liability
and damages caused by Bottler's failure to adhere to the aforementioned terms,
requirements and instructions of Company.
Section 8. Term and Termination.
This Agreement will become effective on the date first written above
and continue until December 31, 2007 ("Initial Period"), subject to automatic
renewal for successive 1 year periods unless terminated effective at the end of
the Initial Period or any renewal by either party giving the other notice by the
September 1 immediately prior to the end of the Initial Period or any renewal.
Additionally, Company and Bottler acknowledge and agree that this Agreement may
be terminated or modified at any time upon the written agreement of both Company
and Bottler. In the event Company ceases to procure a minimum of 70% of the
Sweeteners used by Company's bottlers for the United States, Company may
terminate this Agreement upon 60 days' written notice to Bottler.
Section 9. Confidentiality.
In conjunction with performance under this Agreement, Company has
disclosed and anticipates disclosing or making available to Bottler, orally
and/or in writing, confidential information, including, but not limited to,
information relating to pricing, forward coverage and other terms of purchase of
Sweeteners. In consideration thereof and of Company entering into this
Agreement, Bottler will (1) hold all such confidential information in strict
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confidence, (2) not disclose such information to any other party, including, but
not limited to, a party considering acquiring an equity interest in Bottler or a
party acquiring soft drinks from Bottler and (3) not disclose such information
to any of its employees involved in the purchasing of sweeteners other than
Sweeteners hereunder or, except on a need-to-know basis, to any of its other
employees. Any officer or employee of Bottler receiving such confidential
information will be bound by the provisions of this Section 9 as though a party
hereto. In the event of a breach of this Section 9 by Bottler or its officers or
employees, Company may, within its sole discretion and without liability or
advance notice, terminate this Agreement.
Section 10. Recordkeeping and Auditing.
Bottler will maintain records for 2 years following the year of
Sweetener delivery adequate to substantiate compliance with all provisions of
this Agreement. Such records will be available for inspection and auditing by
Company or its designee(s) upon notice during normal business hours. If Bottler
fails to fully comply with any provision of this Section, Company may, within
its sole discretion and without liability or advance notice, terminate this
Agreement. Company's obligation to Bottler regarding recordkeeping is set forth
in Section 5.
Section 11. Force Majeure.
Neither party will be liable to the other for loss, damage, or delay in
delivery or receipt of sugar caused by act of God, war conditions, compliance
with governmental laws, regulations orders or actions, embargo, fire, flood,
accident, strike or labor trouble, transportation difficulty, or other similar
event where the occurrence of such event is beyond the control of and occurs
through no fault of either party. Further, neither party will be liable to the
other for termination or suspension of delivery by the Originating Supplier
pursuant to force majeure provisions in Company's agreement(s) with such
Originating Supplier.
Section 12. Other Agreements.
All other agreements between the parties hereto will continue in full
force and effect. Under no circumstances will this Agreement be construed to
modify, amend, supersede or waive any provision of any other agreement between
the parties unless the same is expressly so stated in writing signed by the
parties with a specific reference to the other agreement.
Section 13. Notices.
Any notice, request, approval or other document required or permitted
to be given to either party under this Agreement will be deemed to be duly given
when transmitted by telegraph, facsimile or deposited in the United States mail,
postage prepaid for mailing by first class addressed to the other party as
follows:
If to Bottler:
the last known address
If to Company:
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Attn: Vice President
With a copy to: Chief Counsel, Technical and Support Services
Section 14. Miscellaneous.
The parties acknowledge and agree that any information, including
forward-looking information, provided by the Company regarding the price of any
commodities or other materials, in the future or otherwise, or any referral to
an advisory firm, is made for informational purposes only and that the Company
is not furnishing advice or making any recommendations with respect to any
pricing or hedging decisions related to purchases made in accordance with this
Agreement. Bottler acknowledges and agrees that: (1) the Company is not acting
as a fiduciary or an advisor with respect to purchases made in accordance with
this Agreement; (2) Bottler is capable of evaluating and understanding (on its
own behalf or through independent professional advice) the terms, conditions and
risks associated with purchases made in accordance with this Agreement; and (3)
Bottler has not received from the Company any assurance or guarantee as to the
price of commodities or other materials in the future or as to the expected
results of any hedging transactions related to purchases made in accordance with
this Agreement. Any forward-looking information provided to Bottler by Company
is for informational purposes only and the Company is not furnishing advice or
making any recommendations with respect to pricing or hedging decisions related
to this Agreement.
Section 15. Entire Agreement.
This Agreement constitutes the entire understanding and agreement
between the parties with respect to subject matter hereof and cancels and
supersedes any prior negotiations, understandings and agreements, whether verbal
or written, with respect thereto.
Section 16. Waivers, Modifications, Amendments.
No waiver, modification or amendment of any provision of this Agreement
will be valid or effective unless made in writing and signed by a duly
authorized representative of each party.
Section 17. Applicable Law.
The validity, interpretation and performance of this Agreement will be
governed and construed in accordance with the laws of the State of Georgia as
though this Agreement were fully made and performed within the State of Georgia.
Section 18. Assignment.
This Agreement is deemed to be of a personal nature, and Bottler may
not assign or transfer this Agreement or any interest therein or undertake any
transaction or series of transactions which would result in an effective
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transfer of this Agreement or any interest therein, or sublicense or assign any
rights or obligations hereunder, or delegate or subcontract performance hereof,
in whole or in part, to any third party or parties, without the prior, express,
written consent of Company. For purposes of this Section 18, a change in
ownership of 50% or more of the voting equity in Bottler will be deemed to be an
assignment. Because this clause is considered a material part of the bargain
between the parties, any attempt to do so will be void and will, at Company's
option, have the effect of terminating this Agreement.
IN WITNESS WHEREOF, the parties to this Agreement have executed this
Agreement by their duly authorized representatives as of the date first written
above.
THE COCA-COLA COMPANY
acting by and through its
COCA-COLA NORTH AMERICA DIVISION
By: S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Vice President, Strategic Procurement
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BOTTLER
By: S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President and Chief Procurement Officer
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