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Signed Contract_Coca Cola Beverage AgreementMasterpiece on the Mississippi TO: Michael C. Van Milligen, City Manager FROM: Marie L. Ware, Leisure Services Manager SUBJECT: Coca -Cola Agreement DATE: June 26, 2012 INTRODUCTION Dubuque All-America City 1 1 1 ' 2007 The purpose of this memorandum is to request your signature on the attached Coca - Cola Agreement for exclusive soft drink product. BACKGROUND The Park and Recreation Commission voted on February 14, 2012 to accept the Coca - Cola five -year proposal to be the provider of soft drink beverages for Bunker Hill Golf ' Course and McAleece Recreation Area. Proposals were also provided by Pepsi -Cola of Dubuque and Dr. Pepper Snapple Group, but over the five years of the agreement the Coca -Cola Refreshments proposal generated the highest revenue for the city. Our previous two exclusive five -year soft drink agreements were also with Coca -Cola Refreshments. Although the agreement start date is April 1, 2012 it has taken Coca -cola Refreshments national office to revise the agreement to meet the recommendations of the City Attorney's office. ACTION REQUESTED Please sigh the two copies of the agreement and return to our office. MLW:et attachments prepared by Patrick Prevenas, Recreation Division Manager BEVERAGE AGREEMENT Date: April 1, 2012 Parties: BOTTLER: Coca -Cola Refreshments USA, Inc. d/b /a Dubuque Sales Center, a Delaware corporation 2435 Kerper Blvd. Dubuque, .IA. 52001 ACCOUNT: Dubuque Leisure Services 2200 Bunker Hill Rd Dubuque, IA 52001 1. Definitions (a) "Agreement Year" means each twelve -month period during the. Terra beginning with the first day of the Term. (b) `Beverage" or "Beverages" shall mean all nonalcoholic beverages of any kind including concentrated energy drinks in small servings and the pre-mix and/or post -mix syrups used to prepare fountain Beverages. "Beverage" or "Beverages" shall not include fresh - brewed unbranded coffee and fresh- brewed unbranded tea products, unflavored dairy products, water drawn from the public water sup- ply or unbranded juice squeezed fresh at the Facility. (c) "Products" shall mean Beverage products purchased directly from Bottler or sold through vending machines owned and stocked exclusively by Bottler. (d) "Competitive Products" shall mean all Beverages which are not Products. (e) "Concessionaire" means any current or future third -party food service provider under agreement with Account at the Facility that directly or indirectly relate to the service of Beverages. (f) "Facility" shall mean the entire premises of Dubuque Leisure Services (limited to Bunker Hill Golf Courses located at 2200 Bunker Hill Road and McAleece Sports Complex located at 11801 Admiral Sheehy Dr. including all currently existing and future buildings, and includes, without limitation, the grounds, all vending and concession areas, sidelines, benches and locker rooms, branded and unbranded food service outlets and dining facilities 2. Term: April 1, 2012 ("Effective Date ") through the later of March 31, 2017 ( "Fee Period "), or (ii) until such time as Account has purchased and paid for 5,500 standard physical cases of Products ( "Volume Commitment "), whichever time period is later. Bottler shall not be required to pay Account any further Sponsorship Fees (as defined in Section 6, Consideration) in the event the Agreement is extended after the Fee Period because the Account has not fulfilled the Volume Commitment. CAR 43010899 3. Advertising. Rights (a) Account hereby grants to Bottler the exclusive right to advertise Beverages and specifically Products (i) at the Facility and (ii) in connection with the Facility, No permanent or temporary advertising, signage or trademark visibility for Competitive Products will be displayed or permitted anywhere at the Facility. (b) Account agrees that Bottler's advertising shall be positioned at all times in such a manner that the advertising message is in no way obscured (electronically or otherwise) and is clearly visible to the general public. The Products shall be prominently listed on any menu boards located at the Facility and all equipment dispensing Products shall be prominently identified with the appropriate trademarks/logos. (c) Account further agrees that all Products will be dispensed in Bottler's equipment and that no other trademarked, equipment, coolers or containers will be permitted, when dispensing Products. 4. Sponsorship Rights (a) Bottler will have the exclusive right to advertise the Products as the "Official" or "Exclusive" soft drink, sports drink, water, lea, energy drink and/or juice or juice drink, etc. of the Facility. (b) Account hereby grants to Bottler a royalty -free license, exclusive for Beverages, to use the trademarks, logos and other intellectual property of the 'Account and Facility ( "Account Marks ") in connection with the promotion of Products. Such promotion may occur in advertising (TV, radio, and print), packaging, vessels, promotional materials, and point of sale materials for Products and may be in connection with the marks and logos of Bottler's customers. (e) Account will not enter into any agreement or relationship whereby any Competitive Products are associated in any manner with Account, the Facility, or any of the Account Marks in any advertising or promotional activity of any kind. 5. Product Rights (a) Account hereby grants to Bottler the exclusive right to sell or distribute .beverages at the Facility. Account and/or its Concessionaires shall purchase all Products, (and cups, lids and carbon dioxide, if applicable) directly from. Bottler. No Competitive Products may be sold,, dispensed, sampled or served anywhere at the Facility (b) During the Term, Bottler will loan to Account, pursuant to the terms of Bottler's equipment placement agreement, at no cost that Beverage dispensing equipment reasonably required and as mutually agreed upon to dispense Beverages at the Facility ( "Equipment "). Account represents and warrants that electrical service at the Facility is proper and adequate for the installation of Equipment, and Account agrees to indemnify and hold Bottler harmless from any damages arising out of defective electrical services. 2 6. Consideration (a) In consideration of the rights and benefits granted to Bottler here under, Bottler agrees to pay Account an aggregate of Thirty Three Thousand dollars ($33,000) for the entire Term (the "Sponsorship Fees "). The Sponsorship Fees shall be paid at Nine Thousand Dollars ($9,000) for Agreement Year. one. The first installment shall be payable within sixty (60) days after the date this Agreement is fully executed and subsequent installments of $6,000.00 per Agreement Year during the Fee Period. Installments shall be due on or about the anniversary date after each Agreement Year in the Fee Period. (b) Account shall be entitled to purchase bottle /can Products from Bottler in accordance with the price schedule set forth in Exhibit A. Such prices shall remain in effect until March 31, 2013. Thereafter, such prices will be subject to an annual increase of no more than four_percent (4 %) over the previous Agreement Year's price, except in the event of an increase in a component of Bottler's cost of goods, manufacture or delivery, or increases in taxes, deposits and other government related fees in which case Battler may increase prices to cover such increased costs. Annual price increases shall occur automatically on April 1st. (c) In the event Account employs a Concessionaire, Account will cause Concessionaire to purchase from Bottler all requirements for Beverages (and cups, lids and carbon dioxide, if applicable). Such purchases will be made at prices and on terms set forth in Bottler's existing agreement with Concessionaire, if any. If no agreement exists between Concessionaire and :Bottler, such purchases will be made at prices and on terms set forth in this Agreement. Account acknowledges that there will be no duplication of allowances, funding or. benefits (including pricing) to Account or Concessionaire if Concessionaire has an existing agreement with Bottler. 7. Termination (a) If Account breaches any of its obligations set forth in this Agreement, then at its option and not as its sole remedy, Bottler may terminate this Agreement, and Account shall (i) return. any Equipment, (ii) pay to Bottler a pro rata portion of the costs of refurbishing and installing the Equipment, and (iii) pay to Bottler the unearned portion of pre -paid Sponsorship Fees or other upfront funding, if any. (b) Notwithstanding the other provisions of this Agreement, if any federal, state or local law, rule, regulation or order prohibits, restricts or in any manner interferes with the sale or advertising of Beverages at any time during the Term of this Agreement or if for any reason the use of the Facility declines, then at its option and not as its sole remedy, Bottler may terminate this Agreement and Account shall (1) return any Equipment, (ii) pay to Bottler a pro rata portion of the costs of refurbishing and installing the Equipment, and (iii) pay to Bottler the unearned portion of pre-paid Sponsorship Fees or other upfront funding, if any. (c) Account represents and warrants that it has full right and authority to enter into this Agreement and to grant and convey to Bottler the rights set forth herein. Upon expiration or revocation of such authority, then at its option and not as its sole remedy, Bottler may terminate this Agreement, and Account shall (i) return any Equipment, (ii) pay to Bottler a pro rata portion of the costs of refurbishing and installing the Equipment, and (iii) pay to Bottler the unearned portion of pre -paid Sponsorship Fees or other upfront funding, if any. 3 (d) Bottler shall have the right to withhold and not pay further any amounts which may become payable to Account pursuant to this Agreement if (i) Account has failed to perform its obligations hereunder, (ii) Bottler's rights hereunder have been lost, limited or restricted, or (iii) there exists a bona fide dispute between the parties. (e) Nothing in this section shall operate to restrict any of. Bottler's other remedies in the event of a material breach by Account. 8. Governing Law This Agreement and any dispute arising out of or relating to this Agreement shall be governed by and construed in accordance with the laws of the State of Georgia, without reference to its conflict of law rules. 9. Compliance with Law Each of the parties hereto agrees that it will, in its performance of its obligations hereunder, fully comply with all applicable laws, regulations and ordinances of all relevant authorities and shall obtain all licenses, registrations or other approvals required in order to .fully perform its obligations hereunder. 10. Retention of Rights Account shall not obtain, by this Agreement, any right, title or interest in the trademarks of The Coca -Cola Company or Bottler, nor shall this Agreement give Account the right to use, refer to, or incorporate in marketing or other materials the name, logos, trademarks or copyrights of Bottler or The Coca -Cola Company. 11. Dispute Resolution Bottler and Account agree that prior to the commencement of any judicial proceeding for any controversy arising out ()for relating to the construction or interpretation of this Agreement, the parties will engage in mediation in accordance with the American Arbitration Association ( "AAA "). The parties shall divide equally all costs of mediation which shall be paid immediately upon billing by the mediation service. 12. Entire Agreement This Agreement and its exhibits contains the entire agreement between the parties with respect to the subject matter hereof. This Agreement may not be assigned without the prior written consent of all parties; provided, however, that Bottler may assign this Agreement in connection with its reorganization or the sale of all or substantially all of its assets. All amendments to or waivers of this Agreement must be in writing signed by all the parties. 4 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. BOTTLER ACCOUNT is By. U ::: . , - i ,., _. I :', -.t . = .:i.._,, : `;..;: By: Printed Name: ..)ti.: 31 , t.., :..,,_ .%.:,'.1.1.. °: 1 .h , Printed Name: 1 /; t c,\t' c 001 \ �� � �ckG,1 Title: r•::. `$',t::o • :. .k Title: 1 a /Na r--. Date: ':::' • t .: Date: 6 r 1�` 7) 5 EXHIBIT A INITIAL PRICE SCHEDULE* Package Cost 20oz PET SSD $1.9.00 20oz PET M.M. Refreshments $19.00 20oz PET PowerAde $19.85 20oz PET Dasani $10.98 15.2oz MM Juices $24.71 1Ooz Tum-E- Yummies $6.23 Sgal BIB 2.Sgal BIB 2.5 gal BIB Bloody Mary CO2 (201b cylinder) $64.80 $32,40 $80.00 $23.00 *All prices are per standard physical case and exclusive of taxes, deposits, handling fees, and recycling fees.