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HomeMy WebLinkAboutCocaCola Bottling Co Vending Agreement 03.01.10EXCLUSIVE MARKETING AND SPONSORSHIP AGREEMENT EFFECTIVE DATE: PARTIES: Sponsor "} COCA-COLA BOTTLING CO. OF YAKIMA & TRI-CITIES, a Washington corporation, City") CITY OF PASCO ACCOMODATION PARTY: Facilities") PASCO SPORTING COMPLEX; HIGHLANDS PARK GRID KIDS FOOTBALL FIELDS; PASCO CITY HALL; CYBER STOP; MEMORIAL PARK SWIMMING POOL; KURTZMAN PARK SWIMMING POOL; and RICHARDSON PARK SWIMMING POOL BACKGROUND AND PURPOSE. The parties are entering this Agreement (the Agreement") in order to define their relationship. Specifically, City has expressed a need for certain scoreboards, equipment and fundraiser opportunities from Sponsor, in consideration for the exclusive right to sponsor City, and to exclusively sell and market Sponsor's product throughout the following Facilities: Pasco Sporting Complex, Highlands Park Grid Kids Football Fields, Pasco City Hall, Cyber Stop, Memorial Park Swimming Pool, Kurtzman Park Swimming Pool, and Richardson Park Swimming Pool. Therefore, City desires to grant Sponsor, and Sponsor desires to obtain, the exclusive rights to (i) offer vending machine food items and all beverages for sale at the Facilities, ii) to market and associate Vending Machine food items and all beverages with Facilities; and (iii) to promote Facilities by providing Facilities with promotional materials described in Section 3.1 (Promotional Materials), pursuant to the terms of this Agreement. AGREEMENT. In consideration of the mutual promises contained herein, the parties agree to the following terms and conditions regarding this Agreement: 1. TERM AND TERMINATION. 1.1 Term. The term of this Agreement is for 180 months (15 years). The term of this Agreement will commence on March 1st, 2010 and terminate on February 28th, 2025, Facilities agree that all equipment containing exclusive vending machine food items and all beverages approved by the United States Department of Agriculture, shall be made available throughout the Facilities as set forth above during times in which the Facilities are being used and shall not be restricted by timers or key switches, unless otherwise agreed to herein or in writing. 1.2 Termination. 1.2.1 By City. This Agreement may be terminated upon the election of City by providing to Sponsor a written notice of intent to terminate the Agreement on the grounds that (a) Sponsor has failed to perform its service obligations under Section 8 hereof, after being notified, in writing, by City to perform such obligations within a thirty (30) day time frame, or (b) Sponsor supplied product which was determined to be defective and subsequently recalled, and for which the continued association by City with Sponsor was determined to cause future injury to City. 1.2.2 By Sponsor. This Agreement may be terminated upon the election of Sponsor by providing City a written notice of intent to terminate the Agreement before the expiration date on the grounds that volume of sales of food items and beverages at Facilities (a) is five percent (5%), or more, less than those experienced by other Eastern Washington facilities of similar nature, provided that such notice is delivered to City no later than (90) days prior to the expiration date, as set forth in Section 1.1 above. 1.2.3 Dispute. If upon the receipt of any notice under Sections 1.2.1 or 1.2.2 above, the non-terminating party disputes the grounds for a party's early termination, such dispute shall be resolved by arbitration under Section 10.4 hereof, 1.2.4 Cancellation. If at the conclusion of any twelve (12) month period during the term of the Agreement City wishes to cancel this Agreement, it may do so upon Thirty (30) day's written notice to Sponsor provided that City pays a fee for liquidated damages that Sponsor is entitled to due to the cost of the equipment, loss of revenue, and installation expenses incurred by Sponsor. The fee will be $45,000 after the first 12 months (1 year) and decreases by $3,000 for each successive full year of this Agreement (the fee for partial years will be prorated by months remaining in year). The funds will be paid directly to the Sponsor. 1.2.5 Competitor Notification. If at the end of the term of this Agreement City wishes to use a competing soft drink distributor ("Competitor"), City shall immediately notify Sponsor and provide Sponsor with the terms of the offer made by Competitor, as an accommodation, in order to allow Sponsor to equal the offer made by the Competitor. Sponsor is not bound to match a competitor's offer and City shall not be bound to accept Sponsor's matching offer if it chooses to make one, however, as a courtesy, City shall provide Sponsor with the terms of a competitor's offer. Both City and Sponsor agree to act in good faith in providing information to one another and allowing Sponsor the opportunity to provide equal incentives to City. 2. DEFINITIONS. 2.1 Beverages, means all non-alcoholic beverages of any kind sold at Facilities and all beverages based from which these can be prepared. Beverages does not include dairy and dairy-like products, unbranded coffee and tea. 2.2 City means as the context so requires, the corporate body constituting Pasco Recreational Services Division, a division of the City of Pasco, with the principal's office located at 525 North Third, Pasco, Washington, 99301. 2.3 Facilities means as the context so requires, the corporate body constituting Pasco Sporting Complex, Highlands Park Grid Kids Football Fields, Pasco City Hall, Cyber Stop, Memorial Park Swimming Pool, Kurtzman Park Swimming Pool, and Richardson Park Swimming Pool, divisions of the Pasco Recreational Services Division, located at City of Pasco, 525 North Third, Pasco, Washington, 99301. 2.4 Equipment means all equipment provided by Sponsor to City, for use at Facilities, or as more particularly described herein below in Section 3.4. 2.5 Concession Sales means all beverages sold (including fountain bottled water and other bottled beverages) at any concession stand within the Facilities, and any beverages sales occurring as the result of beverages being sold ("hawked") in stadium seating. 2.6 Vending Sales means any beverages or food items sold from Sponsor's vending machines located at the Facilities. 3. CONSIDERATION. 3.1 Promotional Materials. In consideration of the rights granted Sponsor herein, Sponsor agrees to provide City the materials for Facilities, in quantities as needed by Facilities, to promote the consumption of beverages offered by Sponsor as listed in Exhibit A attached. 3.2 Product List. Sponsor will provide products as listed on Exhibit B attached hereto, with the understanding that said products over the term of this Agreement may change based upon the availability of the product and change in product brands by Sponsor. 3.3 Product Pricing. The Product List as set forth in paragraph 3.2 is priced on Exhibit C, which pricing is subject to annual adjustments to reflect cost of goods increases. 3.4 Equipment. Sponsor will provide the following equipment as identified below in locations where identified below as follows: Provide, install and maintain six (6) BA-2718-11 LED/Wireless scoreboards at Pasco Sporting Complex,- Provide, install and maintain three (3) FB-4005-11 multi- sport scoreboards at Highland Park Grid Kids Fields; Provide and maintain one (1) BB-2142-13 LED/Wireless scoreboard at City Hall Gymnasium; Provide and maintain any cooler equipment at Pasco Sporting Complex; Provide and maintain any cooler equipment in the future at Highland Park Grid Kids Fields' concession stand; Provide and maintain any vending equipment; Provide and maintain two (2) ice machines at Pasco Sporting Complex; Provide and maintain one (1) ice machine in future at Highland Park Grid Kids Fields' concession stand; Provide and maintain one (1) reach-in cooler for Sponsor's product only at Pasco Sporting Complex; Provide and maintain one (1) reach-in cooler for Sponsor's product only at Highland Park Grid Kids Fields' concession stand once completed, Provide fundraiser opportunities for Grid Kids Football program and other City Recreational programs (500 case minimum); Provide field sponsors on the scoreboards, with Sponsor having one prominent display on each) 3.5 Ownership. Sponsor shall remain the owner of all equipment provided by Sponsor to City for the term of this Agreement. In the event of early termination by either party, City and Facilities will return all equipment to Sponsor. Upon fulfillment of this Agreement, Sponsor agrees to transfer ownership of all Promotional Materials listed in Section 3.1 above to City, at no cost to City. It is further agreed that all equipment provided by Sponsor shall have Sponsor's logo attached thereto. Said logo shall remain in place throughout the duration of the Agreement. If any logo is removed from any equipment by City or Facilities, directly or indirectly, such action shall be deemed a violation of this Agreement and shall be cause for termination, including, but not limited to, removal of the equipment and payment of the liquidated damages provision. 3.6 Replacement. In the event replacement equipment is required, Sponsor (Coca-Cola) will be responsible for beverage serving equipment (ie; Fountain units, Coolers or vending machines) and the City would be responsible for replacement or updated scoreboards. Subject to provisions of 7.3. 4. FULL SERVICE VENDING. Sponsor shall service and maintain all vending machines placed at the Facilities. The driver will fill the machines on a regular basis and collect the money from the machines. Sponsor will issue a commission check to City with a statement indicating how many units sold. Said commission check will be sent to City on a quarterly basis. At the request of City, Sponsor shall provide a detailed, itemized record of totals sold through each machine annually. Further, each machine shall have a key switch in place allowing the machines to be shut off during sporting events, therefore the machines shall not compete with the concessions (this is at the choice of City). At all times, the vending machines will remain the property of Sponsor. 5. COMMISSION STRUCTURE - VENDING. Sponsor shall pay to City, a thirty-five percent (35%) commission (net of tax) on all vending machine sales. Said commission shall be computed on a monthly basis and paid within ten (10) days of said computation. 6. CONCESSION PRICING. The following pricing is provided to City as an initial pricing. Due to possible increases in syrup concentrate, Sponsor reserves the right to increase pricing on an annual basis. The increase, however, shall not exceed four percent (4%) per year, or the producers' price index, whichever is greater. Said pricing is attached on Exhibit C. 7. MARKETING RIGHTS. 7.1 Sales. Sponsor will be the exclusive provider of all products in its beverage and vending machines to Facilities, including, but not limited to, Facilities' physical property, Facilities' sports complexes, and fields, and any fundraisers and/or functions held by Facilities of Facilities that include such product. 7.2 Promotion. City grants to Sponsor, the following promotional rights which are exclusive to beverages and vending, to market and promote beverages and vending in connection with Facilities, Facilities' sports complexes, fields, including the right to recognition of its sponsorship on panels of equipment provided by Sponsor or changing existing panels on all score boards and reader boards located at the Facilities. 7.3 Installation and Electricity. Sponsor is to provide installation of electronic equipment purchased by Sponsor. City is to provide electricity. Sponsor is responsible for cleaning equipment and the replacing of any lamps. Any other maintenance costs are the responsibility of Sponsor. 7.4 Signs and Scoreboards. Sponsor's signage /scoreboards are not to be altered or obscured in any way or draped at any time or for any reason by any person or entity without the express written consent of Sponsor. 7.5 Illumination of Signs. City will take reasonable measures to ensure that all lighted signs and panels advertising or promoting Sponsor and its beverages will be fully illuminated at all events in the Facilities at which any signs are located. 7.6 Access. Sponsor will have the right to access signage and vending equipment at all reasonable times for the purpose of replacement or removal of the same, or to modify, change, or alter the promotional messages appearing thereon at the Sponsor's cost and discretion. 7.7 Beverages. Sponsor will have the right to market and promote Sponsor's beverages in connection with Facilities. City will work with Sponsor to assist in promotions conducted by Sponsor with its customers. 7.8 Sponsor Trademarks. City agrees that Sponsor has the right to prominently display Sponsor's beverage's trademarks on each menu board and beverage and /or food vending machine at Facilities. 8. EQUIPMENT AND SERVICE 8.1 Dispensing and Display. During the Agreement's term, Sponsor will loan to City all soft drink dispensing equipment (i.e., fountain equipment and beverage and food vending machines) and refrigeration display cases ( "equipment ") which are reasonably required in Sponsor's discretion to dispense and /or sell beverages and other vending products. 8.2 Proof of Ownership. City agrees it (i) will execute documents evidencing Sponsor's ownership of the equipment; (ii) the equipment may not be removed from City property without the Sponsor's written consent; (iii) City will not encumber the equipment in any manner or permit an attachment thereto except as authorized by Sponsor or incident to court order; and (iv) City will be responsible to Sponsor for any loss or damage to the equipment except when loss or damage is caused by the Sponsor's agents' negligent acts or omissions. 8.3 Upgrade and Maintenance. Sponsor will, at no cost to City, upgrade, maintain and service all equipment on a loan-basis during the term and under the terms of its service program, which will consist of guaranteed responses to service on out-of-product calls within 24 hours, seven days a week. Mechanic dispatching will be provided by Sponsor Monday through Friday, 8:00 a.m. to 5:00 p.m., and through a 24-hour answering service otherwise. Sponsor will, at no cost to City, provide annual maintenance inspection of Sponsor's fountain equipment as recommended by the manufacturer, and as required to meet all county and state public health codes. Sponsor will not be obligated to provide service hereunder during periods in which it is prevented from doing so due to strikes, civil disturbances, unavailability of parts or other causes beyond the control of Sponsor. Sponsor will not be liable to City for City's lost revenues, consequential damages or incidental damages arising out of delay in rendering service. 8.4 Licenses and Permits. Sponsor will, at its sole cost and expense, arrange, acquire and maintain all licenses and permits which may be required for the performance of its vending machine obligations and for the installation of any Equipment under this Agreement. 8.5 Inventory. Sponsor agrees to monitor inventory in the beverage and food vending machines and to stock the same regularly consistent with establishment demand especially during peak use times of year and as required from time to time so that the beverage and food vending machines are, to the extent reasonably possible, in adequate supply of beverages and food at all times. 8.6 Water and Electricity. City agrees to supply the water and electricity necessary for the operation of the equipment; however City does not guarantee the uninterrupted supply of water or electricity due to these utility services not always being available year round. City will not be responsible for any loss or damage to the fountain equipment, the beverage and food vending machines, beverage in the beverage vending machines, food in the food vending machines, or otherwise which may result from any interruptions or failures in such utility services. 8.7 Account Representative. Sponsor will provide at least one account representative to ensure an established and consistent working relationship between City and Sponsor. 8.8 Cleaning and Pest Control. Sponsor will disconnect and move its beverage and food vending machines and any other equipment Sponsor reasonably believes is necessary for cleaning and pest control purposes at least twice each Agreement year and at times reasonably convenient to City and Facilities. 8.9 Sponsor's Employees. Sponsor's service employees will wear uniforms or badges which identify the employees by name when servicing equipment. 8.10 Protection of Equipment. Sponsor shall be permitted to take whatever steps Sponsor deems reasonably necessary to protect the equipment from damage. City and Facilities will provide Sponsor with access to all areas of Facilities' premises to which Sponsor needs access for concessions and vending product deliveries. Sponsor will notify City about any full-time changes in Sponsor's route drivers servicing Facilities' premises. Sponsor will also notify City of any changes in delivery schedules. 9. LIQUDATED DAMAGES. In the event City terminates this Agreement without cause prior to expiration of the Agreement term as set forth in Section 1 of this Agreement, City and Sponsor agree Sponsor's damage for said early termination shall be as set forth in Section 1.2.4. 10. MISCELLANEOUS. 10.1 City Indemnification Obligations. City agrees to defend, indemnify and hold Sponsor harmless from and against all claims, suits, liabilities, costs and expenses incurred by Sponsor, including reasonable attorney's fees, whether they are brought by third persons or employees of either of the parties hereto, or any loss of, or damage to, property caused by the sole negligence of City or Facilities. In no event shall the City be responsible for, or be required to defend, indemnify and hold harmless against, any actions of or damage caused by invitees or other third parties. 10.2 Sponsor Indemnification Obligations. Sponsor agrees to defend, indemnify and hold City harmless from and against all claims, suits, liabilities, costs and expenses incurred by City, including reasonable attorney's fees, related to (i) injury to, including death of person, regardless of whether they are third persons or employees of either of the parties hereto, or (ii) any loss of or damage to property caused by the sole negligence of the Sponsor. 10.3 Indemnification Procedures. Whenever any party entitled to indemnification (The "indemnitee") pursuant to the previous paragraphs receives notice of any claim, which may be subject to indemnity, they shall immediately notify the indemnifying party ("Indemnitor"). The Indemnitor shall have the obligation to assume the defense of such claim, by counsel designated by it and reasonably acceptable to the Indemnitee, provided that the Indemnitor shall not settle or compromise any such claim, or consent to the entry of any judgment, without the written consent of the Indemnitee, which consent shall not be unreasonably withheld. If the Indemnitor fails to assume the defense of such claim within the earlier of thirty (30) days from the receipt of any complaint or five (5) days prior to the date of any answer to any complaint or similar initiation of legal proceeding shall be due, the Indemnitee shall have the right to undertake, at Indemnitee's expense, the compromise or settlement of any such claim on behalf of and the risk and expense of the Indemnitor. 10.4 Arbitration. In the event of such a dispute hereunder, the parties agree to arbitrate such dispute according to the Mandatory Arbitration Rules, RCW 7.04, as in customary use in Franklin County, Washington, provided, however, that notwithstanding such rules there shall be one arbitrator and the fees and expenses of such arbitrator shall be equally shared by the parties, and no award of attorney's fees shall be made by the arbitrator notwithstanding which party may be the prevailing party in such dispute. IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed. Date: 0``0 COCA-COLA BOTTLING CO. OF YAKIMA & TRI-CITIES By: Ah/tDate: 1 -1 Mat Sanders, Branch Manager By: Date: Mike Bird, \Aending Manager