PEPSI BEVERAGES COMPANY
BEVERAGE SALES AGREEMENT
This sets forth the agreement ("Agreement") between Bottling Group, LLC, a Delaware limited 2oyeт eps) and Cathedral City, wits principal place or Cans at 680 Avenile al 2507 "Pepsi"") and Cathedral Cit owned subsidiaries, and on behalf of its individual franchisees and licensees, if any (the "Customer'). The support described below is in lieu of any other discounts, allowances o1 exit, i Pepsi and isi neit a hind hereife on tridually red to as pirate or hereinafter collectively referred to as the "Parties."
Definitions
As and tie i Agreement, the following capitalizod terms have the respective meanings "Beverage" or "Beverages" means all carbonated and non-carbonated, non-alcoholic drinks, however dispensed during the Term of the Agreement. "Beverage" or "Beverages" excludes bottled water, alcoholic beverages and carabis infused beverages. "Cases" means cases of Packaged Products (as defined herein) purchased by Customer from Pepsi during the Term, initially delivered in quantities of 24 plastic bottles, aluminum cans, glass bottles (or equalized 24 pack cases, e.g., two 12-pack cases), eight 2-liter plastic bottles, or such other size, quantity and type of containers as Pepsi may make available from time to time during the Term.
"Competitive Products" means any and all Beverages other than the Products. "Equipment" means equipment loaned by Pepsi to Customer to dispense, store or cool Products (as defined below), as more fully described in Section 4 herein. "Gallons" means gallons of the Postmix Products purchased by Customer from Pepsi during the Term.
"Outlets" means existing, future and after-acquired (provided not already under a pre-existing beverage agreement with Pepsi) outlets owned, operated, managed, leased or franchised by Customer under the Cathedral City trademark[s] as listed in attached Exhibit A (and any related or similar trademarks, including any successor trademarks) including the parking garages or other Customer-owned/controlled/operated surrounding areas located at or within those facilities and shall include any outlet or other facility in Customer's system that may be opened or acquired by Customer now or in the future, including under different concept and/or trademark during the Term. This excludes beverages within City Hall, and City park properties or facilities, #6575-1
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unless the Parties mutually agree to identify additional Outlets in an updated Exhibit A. "Packaged Products" means Beverages that are sold or distributed by Pepsi in pre-packaged form (e.g., bottles and cans). A current list of Pepsi's Packaged Products is listed in attached Exhibit B which may be amended by Pepsi from time to time. "Postmix Products" means Beverages sold and/or distributed by Pepsi and used to create and prepare fountain beverages, frozen carbonated or non-carbonated beverages. A current list of Pepsi's Postmix Products is listed in attached Exhibit B which may be amended by Pepsi from time to time.
"Products" means Postmix Products, and Packaged Products. "Year(s)" means each 12-month period during the Term commencing on the first day of the Term or an anniversary thereof.
1. Term
The term of this Agreement will commence on December 15, 2019 and the term will expire upon the later of five (5) Years or at such time as Customer's collective purchases of Products meets or exceeds a volume threshold (the "Volume Threshold") of 12,250 Cases (the "Term") or if terminated pursuant to Section 6 (B) of this Agreement. Thus, in the event the Volume Threshold is not met on or before the date indicated above, then the Term will automatically extend for the period of time necessary until the Volume Threshold has been met (the "Automatic Extension").
Except for applicable Rebates, which may be earned during the Automatic Extension, Pepsi will not provide any other funding to Customer.
2. Performance
This Agreement, including all of Pepsi's support to Customer as described below, is contingent upon Customer complying, throughout the Term, with all of the following performance criteria:
Exclusivity. Pepsi is the exclusive Beverage supplier to Customer's Outlets. Customer agrees to take all necessary steps to ensure that the Products are the exclusive Beverazes of their respective types sold, dispensed or otherwise made available, or in any way advertised, displayed, represented or promoted at or in connection with the Outlets by any method or through any medium whatsoever (including without limitation print, broadcast, direct mail, coupons, handbills, displays and signage), whether public or private. The Outlets will not serve, dispense or otherwise make available or permit the availability of, or in any way advertise, display, represent or promote, Beverage products licensed by, or produced by bottlers licensed by, The Coca-Cola Company or any affiliate thereof, or any other supplier of Competitive Products.
(B) Purchase of Products. Customer agrees to purchase, and require its Outlets and purchasing representatives to purchase, Beverage Products exclusively and directly from Pepsi. #6575-1
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Fountain Products. Customer agrees to use the Postmix Products for use in preparing the fountain beverage products (the "Fountain Products): (i) in accordance with the standards established by Pepsi and (ii) only for immediate or imminent consumption; Customer agrees not to resell the Postmix Products either to nonaffiliated outlets or to consumers in any form other than the Fountain Products.
(D) Ancillary Product. Customer agrees to purchase, and require its purchasing representatlves to purchase all their respective requirements for carbon dioxide and branded disposable cups ("Ancillary Products") exclusively from Pepsi.
Advertising Rights. Pepsi may advertise and promote its Products in and with respect to Cut dispay propits brand identic to for ach Product seven on ali cia columne catering and digital, menu boards and postmix dispensing valves at each of the Outlets throughout the Term.
Changes in Outlets). Customer will promptly notify Pepsi, in writing, of any Outlet which is closed, sold or otherwise disposed of during the Term so that the Parties may promptly update Exhibit A.
(G) Product Mix; Minimum SKU/Brand Requirement. Customer must mandate the Prodicts and faced Products at eart of to prided anguin is memo be itiy Pepsi, based on Equipment type at the Outlets.
Restrictions for Products. The Parties recognize and agree that there are certain additional territorial restrictions that pertain to the purchase and resale of the Products. To the extent any prospective Outlet(s) are located outside the territories serviced by Pepsi, then Pepsi may, upon request by the Customer, use commercially reasonable efforts to facilitate an agreement between the Pepsi-Cola bottler servicing the applicable territory and the Customer with terms substantially similar to the terms of this Agreement. Furthermore, Customer agrees not to distribute or resell the Products, directly or indirectly, outside the territories serviced by Pepsi and shall cause its purchasing representative to abide by such territorial restrictions.
Funding
Provided Customer is not in breach of this Agreement, Pepsi agrees to provide Customer with the funding described below.
sponsorship support funds in the amount of Seven Thousand US Dollars ($7,000), payable to Customer within ninety (90) days after the later of (i) the first day of the Term or (i) the signing 2226225
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unearned Annual Sponsorship Support Funds will be repaid to Pepsi pursuant to the terms of Section 6(B)(i) herein. The funds will used to sponsor the following events listed. $1,000 - Cathedral City Hot Air Balloon Festival, $1,000 - North Pole Village at Snow Fest, $1,000 - Movies in the Park, $1,000 - Taste of Jalisco Festival, $1,000 - Cathedral City LGBT Days, $1,000 - Easter Kidapalooza, $1, 000 - East Palm Canyon Banner Program.
Marketing Support. Each Year during the Term, Pepsi will provide Customer with markeung support, valued at up to Iwo Thousand Five Hundred US Dollars ($2,500) ("Marketing Supporf'). The Marketing Support will be used and spent by Pepsi to pay for umbrellas and ice barrels, as mutually agreed to by the Parties. Customer acknowledges and agrees that unused Marketing Support in any Year will not be carried over to a subsequent Year and will not be redeemable for a cash payment.
(C) Rebates. Each Year throughout the Term, Pepsi agrees to calculate the total number of eligible Cases and Gallons purchased by each of the applicable Outlets from Pepsi pursuant to this Agreement, and will provide Customer with rebates calculated based on applicable rates set forth below (the "Rebates"). The Rebates, as applicable, will be paid by Pepsi within sixty (60) days after the end of each Year. The Parties agree that Pepsi will not accrue or pay any Rebates for sales to Outlets that are in breach of the Performance Requirements listed in Section 2 above.
Rebates Rates Eliable Products*
$2.00/Gallon All Postmix Products, Crush, Dr Pepper, El Nino and Lipton Iced Tea
$2.00/Case** All CSDs as noted in Exhibit B
*The following Products are excluded from Rebates: 12 and 24 oz. CSDs, 16.9 Aquafina **24-pk or equivalent (e.g., two (2) 12-pk)
Commissions. Pepsi shall provide Customer with commissions, as a percentage of the actual cash ("cash in bag" or "CIB") collected by Pepsi from the Vending Machines placed at the Outlets, less any applicable government-imposed taxes/fees and deposits, as applicable ("Commissions"). Such Commissions shall be at the rate(s) set forth below (the "Commission Rate") and shall be calculated as follows:
(CIB * Commission Rate) - applicable CRV = Commission due Product Initial Vend Price* Commission Rate**
All 20 oz. Corporate CSDs 3.00 35%
20 oz. Gatorade 3.00 35%
20 oz. Aquafina 3.00 35%
* Pepsi shall have the right to increase vend prices by $0.25 in each of Years 2 through 5. **Commission Rates and Vend Prices for new Product will be mutually agreed upon by Pepsi and Customer
(1) Commissions Payment. Pepsi shall pay Commissions to the Customer within thirty (30) days of the end of each 4-week accounting period established by Pensi. Pensi shall make all pertinent revenue and sales records respecting the Vending Machines #6575-1
PEPSI BEVERAGES COMPANY
Change to Commission Rate/Formula. Customer agrees that Pepsi shall have the (3) Vend Price. The initial vend prices and minimum scheduled increases that are necessary for Customer to qualify for any Commissions are set forth in the Commission chart above. Customer acknowledges that Pepsi has the right to pass through any incremental fees, deposits, taxes or other governmentally imposed charges (whether local, state, federal or judicially imposed on manufacturers, distributors, consumers or otherwise). The pass-through of any such govemmentally imposed fees, deposits, taxes or charges on the Products will be in addition to any scheduled Vend Prices increases set forth herein or notification restrictions that may be specified in this Agreement.
Equipment and Service
Equipment. Pepsi will loan to the Customer, at no charge, appropriate Equipment for dispensing the Products at the Outlets. Customer agrees that the Equipment will be exclusively used to display and merchandise the Products as reasonably determined by Pepsi, and subject to applicable local law, rule or regulation. Customer will not use the Equipment to display, stock, advertise, sell or maintain any other products (including on the exterior of the Equipment). Title to such Equipment will remain vested in Pepsi or its affiliate and Customer will return all Equipment to Pepsi upon expiration or earlier termination of this Agreement. At Pepsi's request, Customer will provide Pepsi with a written Equipment verification list indicating the asset number, Equipment type and location of the Equipment loaned to Customer pursuant to this negotate the economic terms for implementation of the new technology equipment. (B) Vending Machines. With respect to the vending machine Equipment placed at the Outlets (the "Vending Machines"), Pepsi will have the additional responsibility for (i) stocking the Vending Machines with the Products and (i) collecting, for its own account, all cash monies from the Vending Machines and for all related accounting for collected monies. Customer agrees to provide reasonable assistance to Pepsi in apprehending and prosecuting vandals. Pepsi shall not be obligated to pay Commissions on documented revenue losses resulting from vandalism or theft of Product with respect to any Vending Machines. Pepsi shall not be assessed common area maintenance fees, taxes or other charges based on its occupation of the space #6575-1
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allocated to its Equipment at the Outlets.
Pepsi will promptly respond to each Customer request, and will use reasonable efforts to remedy the related Equipment problem as soon as possible, however because delays in service may be caused by factors well outside of Pepsi's control, Pepsi's service record will be measured in the
5. Pricing
Customer will purchase, and will require that any third parties or purchasing representative for the Outlets to purchase, Products and Ancillary Products directly and exclusively from Pepsi pursuant to the pricing and terms and conditions set forth herein. The initial pricing schedule for Products is set forth on attached Exhibit B, which may be changed by Pepsi from time to time during the Term. Pepsi will be entitled to pass-through any incremental fees, deposits, taxes or other governmentally imposed charges (whether local, state, federal or judicially imposed on manufacturers, distributors, consumers or otherwise). The pass-through of any such governmentally imposed fees, deposits, taxes or charges on the Products will not be subject to any pricing cap or notification restrictions that may be specified in this Agreement.
6. General Terms
(A) Termination for Default. Either Party may terminate this Agreement if the other commits a material breach of this Agreement; provided, however, that the terminating Party has given the other Party written notice of the breach and the other Party has failed to remedy or cure the breach within thirty (30) days of such notice. If for any reason Customer closes one or more Outlets or if one or more Outlets breaches the Agreement, then Pepsi shall have the option, in lieu of termination of the entire Agreement, to (i) adjust Funding in Section 3 commensurate with the projected decline in volume; (ii) terminate the Agreement only as it pertains to the sold, closed or breaching Outlets); and (ili) obtain an equitable reimbursement for the portions of Funding and other costs attributable to such sold, closed or breaching Outlets). Notwithstanding the foregoing, this paragraph will not apply to seasonal Outlet closures with Pepsi prior written approval, such approval not to be unreasonably withheld.
Remedies. If the Term of this Agreement is terminated early for any reason other than an will have the right to immediately seck reimbursement from Customer and the Outiets for the following:
An amount reflecting reimbursement for all Funding previously advanced by epsi but not earned by Customer pursuant to the terms of this Agreement. With regat Anne nor pr Fund i a te amount of such reimbursement o
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be the result of multiplying, the Annual Sponsorship Support Funds by a fraction, the numerator of which is the number of months remaining in the Year in which the Agreement is terminated at the time such termination occurs and the denominator of (2) An amount reflecting reimbursement for the cost of installation, service and refurbishing of Equipment provided during the Term and the cost of removal of all Equipment that has been installed in the Outlets, as applicable; and (3) An amount as liquidated damages, for lost sales suffered by Pepsi as a result of such termination, equai to the sum of: (a) the product of $7 multiplied by the projected number of Gallons of Postmix Products that Customer would have been expected to purchase during the remainder of the Term based on the Volume Threshold and Customer's average annualized purchase rate and (b) the product of $10 multiplied by the projected number of 24 pk case equivalents of Packaged Products that Customer would have been expected to purchase during the remainder of the Term based on the Volume Threshold and Customer's average annualized purchase rate. (C) Expiration, Upon expiration of this Agreement, if Customer has not entered into a further agreement with Pepsi for the purchase of the Products, Customer will surrender to Pepsi all Equipment installed in the Outlets.
(D) Right of Offset. Pepsi reserves the right to withhold payments due hereunder as an offset against amounts not paid by Customer or its Outlets for Products ordered from and delivered by Pepsi and any and all balances due and payable to Pepsi pursuant to this Agreement. (E) Non-Disclosure. Except as may otherwise be required by law or legal process or as reasonably necessary for either Party to enforce its rights hereunder, neither Party will disclose to unrelated third parties the terms and conditions of this Agreement without the consent of the other.
(F) Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned or otherwise transferred by either Party (whether by operation of law or otherwise) without the prior written consent of the other Party, provided, however, that Pepsi consent of Customer hereto if such affiliate is (a) capable of fully performing all obligations of the assignor hereunder and (b) agrees, in writing to perform all of the obligations and assume all liabilities of the assignor hereunder. In the event that a third party acquires Customer or substantially all Outlets or if Customer is acquired or merges with a third party, Customer will, in connection with such transaction, cause the acquiring party/merged entity, in writing, to ratify this Agreement and assume all of the obligations of Customer hereunder. In the event that Customer does not deliver written evidence of such ratification and assumption of this Agreement by the acquiring party or merged entity within ten (10) days following the closing of the transaction, Customer will be in breach of this Agreement and Pepsi may, at its option, terminate this Agreement effective immediately and Customer will pay to Pepsi all sums specified in Section 6(B) herein,
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(G) Governing Law. The laws of the state of California govern all matters arising out of this Agreement.
Price Discrepancy. Any price discrepancy claim must be submitted to Pepsi within 365 do a the dat of the atic i guestion lori makes put specting de priciar Product, amount in dispute and reason for the dispute. This request should be addressed to:
Accounts Receivable
Pepsi-Cola Customer Service Center
P.O. Box 10
Winston-Salem, North Carolina 27102
If Customer makes a price discrepancy claim from 91 to 365 days after the date of invoice, in addition to the written request as specified above, Customer must submit to Pepsi a copy of the invoice in question, copies of any check remittances pursuant to the invoice in question and any additional supporting documentation.
(D) Tax. Neither Pepsi nor its affiliates will be responsible for any taxes payable, fees or other tax liability incurred by Customer in connection with the consideration or any other fees payable by Pepsi under this Agreement. If Pepsi is charged common area maintenance fees, taxes or other charges related to Pepsi's occupation of the space allocated to its Equipment at the Outlets, Pepsi may make an adjustment to the consideration provided in Section 4 above to offset for such costs.
Force Majeure. Pepsi will not be responsible for any delay or lack of delivery resulting directly or indirectly from any foreign or domestic embargo, product detention, seizure, act of God, insurrection, war and/or continuance of war, the passage or enactment of any law ordinance, regulation, ruling, or order interfering directly or indirectly with or rendering more burdensome the purchase, production, delivery or payment hereunder, including the lack of the usual means of transportation due to fire, flood, explosion, riot, strike or other acts of nature or man that are beyond the control of Pepsi or that of the suppliers to Pepsi unless such contingency is specifically excluded in another part of this Agreement. Subject to the provisions below, this Agreement will be suspended as to both Product and delivery during any of the above force majeure contingencies. Any and all suspended deliveries will resume after such contingencies cease to exist, if possible, and this Agreement will resume in accordance with its terms, unless otherwise provided for herein.
Waiver. No failure or delay of either Party to exercise any rights or remedies under this Agreement will operate as a waiver thereof, nor will any single or partial exercise of any rights or remedies preclude any further or other exercise of the same or any other rights or remedies.
Any waiver must be in writing and signed by the Party waiving the rights. (L) Relationship of the Parties. The Parties are independent contractors with respect to each other. Nothing contained in this Agreement creates a joint venture partnership between the #6575-1
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Parties.
(M) Construction. Customer and Pepsi acknowledge that both Parties participated equally in the dali be placed upon mich pary heracor a counsel frate the provision being Notices. Any notice which either Party is required or permitted to give hereunder will be in writing, signed by the notifying Party and will be either delivery by hand or nationally- recognized overnight courier service or deposited in the United States mail, certified or registered mail, return receipt requested, postage paid, addressed as follows: If to Customer, to the name and address set forth in the preamble herein. If to Pepsi, to the name and address set forth in the preamble herein, with a copy thereof to: Pepsi Beverages Company, 1111 Westchester Avenue, White Plains, NY 10604, Attention: Law Department or to such addresses as the Parties may subsequently provide in writing. Notice will be deemed to have been given when delivered by hand or nationally recognized overnight courier service, or when received as evidenced by the return receipt, or the date such notice is first refused, if that be the case. (0) Right of First Negotiation/Refusal. As of the commencement of this Agreement until ninety (90) days prior to the expiration of the Term, Customer hereby agrees to grant Pepsi exclusive negotiation rights with respect to extending the current Agreement or entering into a new agreement for Beverage pouring rights at the Outlets upon expiration of the current Term.
If the Parties have not entered into a new agreement by the ninetieth day prior to expiration of the Term, Customer will be free to enter into discussions/negotiations with third parties except that Customer hereby grants Pepsi the absolute right of first refusal to match any bona fide offers made by a third party with respect to Beverage pouring rights/sales at the Outlets. Customer will provide Pepsi with details of any such bona fide offers, and Pepsi will have a fifteen (15) day window to decide whether it will match such offer and exercise its right of first refusal. The Parties agree that beverage type/category and not brand names will be considered for the purposes of determining a match. In the event that Pepsi declines to match such offer, or fails to respond within the fifteen (15) day period, then Customer will be free to enter into an agreement with any third party based on terms and conditions equal or favorable to those presented to Pepsi in connection with the notice specified herein.
(P) Distribution Limitations. Pepsi reserves the right to limit quantities, withhold or deduct Funding as an offset to amounts not paid by Customer or terminate this Agreement if Customer (i) sells Products directly or indirectly for resale outside of the Pepsi's exclusive ice the out et operates and resis such products in repo seide spe seclusive territory (Q) Entire Agreement. This Agreement contains the entire agreement between the Parties hereto regarding the subject matter hereof and supersedes all other agreements between the Parties. This Agreement may be amended or modified only by a writing signed by each of the Parties.
(R) Representations. The Parties, represents and warrants to the other Party that (1) the #6575-1
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execution, delivery and performance of this Agreement will not violate any agreements with, or rights of, third parties or any statute, rule or regulation applicable to the party or any of its properties, assets or operations (including without limitation any financial reporting an lisclosure requirements promulgated by the Securities and Exchange Commission) and (2) i duly authorized and empowered to bind itself to the terms and conditions of this Agreement for the duration of the Term and (3) it possesses legal authority to enter into and perform the terms and conditions of this Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed as of the date set forth below.
Bottling Group, LLC Cathedral City
Car lucked.
By: By:
Print Name Dylam Bik Print Name: Charles P. McClendon
Title: ESR (Riverside) Title: City Manager
Date: 12/2/2019 Date: 11-27-19
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EXHIBIT A
Customer Outlets
Downtown Festivals
• Snow Fest
Taste of Jalisco
• Food Truck Mash Up
Cathedral City LGBT Days
• Easter Kidapalooza |
• Coachella Valley Battle in the Desert
• Tejano Music Fest
• Halloween Spooktacular
Cathedral City Hot Air Balloon Fest
• Movies in the Park
Exclusivity for all events at the Cathedral City Community Amphitheater One vending machine inside the Cathedral City Community Amphitheater #6575-1
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EXHIBIT B
Products and Prices
200:241
hoster nota 375 4D
Corp. CSD_TOTAL
Fracolton Tea 33200 12L
700md 12E:
ML berKicktait, Total cer (20i2i
Catarace_ Total 20cr 24L
Licon Bris Toli
Rockser Jotal Can 1501 24L:
Shibbotn Soda. 1202 121
Toa 1650z.128
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