EXHIBIT 10.1

Material has been omitted pursuant to a request for 
confidential treatment and filed separately with the SEC.

 

 

 

January 23, 2002

Coca-Cola Enterprises Inc.
P. O. Box 1778
Atlanta, Georgia 30301

Attn:    Mr. John R. Alm, President and Chief Operating Officer

Re:    1999-2008 Cold Drink Equipment Purchase Partnership Program ("Program")

Dear John:

This letter agreement ("Agreement") amends and restates in its entirety that
certain letter agreement dated September 29, 2000, as amended and restated by
letter agreements dated December 22, 1998, July 7, 1999, and June 21, 2000 (the
"Prior Agreements") setting forth the proposal of The Coca-Cola Company ("TCCC")
to Coca-Cola Enterprises Inc. and each of its subsidiaries holding Coca-Cola
bottling contracts for the territories identified on Exhibit A hereto ("CCE")
with respect to the above, which upon acceptance by CCE shall constitute our
agreement and understanding regarding the Program for the purpose of superseding
the Prior Agreements and all prior cold drink equipment programs between the
parties ("Prior CCE Programs") identified on Exhibit B hereto, as well as all
prior cold drink equipment programs covering Coca-Cola territories acquired by
CCE since 1995 ("Acquired Programs") identified on Exhibit C hereto. This
Program covers only the territories identified in Exhibit A hereto currently
served by CCE in the United States as of the date of this Agreement. In the
event that CCE acquires any other bottler, or acquires the bottling rights to
any additional territory not identified in Exhibit A hereto, this Program shall
not cover such territory and equipment purchased for placement in such territory
shall not be eligible for funding hereunder absent an amendment to this
Agreement reflecting TCCC's consent and adjustment of the Purchase Plan(s) set
forth herein.

Confidentiality

:

The terms and conditions of this Agreement are acknowledged by TCCC and CCE to
be strictly confidential, and the parties agree not to share the contents hereof
with any other party without the express written consent of the other party,
except to the extent required by law.

Term

:

Except as otherwise provided herein, the term of this Agreement is ten (10)
years, beginning as of January 1, 1999, and ending December 31, 2008 ("Term").
If CCE is required to perform any obligations of the Program after the end of
the ten-year Term, such obligations of CCE shall remain in effect beyond the
ten-year Term.

Annual Plan

:

· CCE agrees to commit to an annual development program ("Annual Plan")
developed jointly with TCCC which includes: quarterly purchases and placement of
new Venders and Manual Equipment; agreed upon minimum purchase schedules for
Venders and Manual Equipment and a "Flavor Set Standard" during each of the ten
years. CCE further agrees to commit to and adhere to, as part of the Annual
Plan, local placement targets for the placement of Venders and Manual Equipment
in specified local geographies within the territories identified in Exhibit A
hereto. The Annual Plan will be developed at the beginning of each year, but may
be modified as agreed by the parties based on market place developments during
the course of the year, mutual assessment and agreement relative to the
continuing availability of profitable placement opportunities and continuing
participation in the annual CCE/CCNA market planning process.

Purchase Plan:

> > · CCE agrees to purchase and place 1,200,174 cumulative units of cold drink
> > equipment over the ten (10) year period 1999-2008, as provided on Exhibit D
> > (the "Purchase Plan"), in the CCE territories identified in Exhibit A
> > hereto. The territory descriptions set forth in Exhibit A shall be
> > controlling for purposes of this Program, regardless of any subsequent CCE
> > division realignment, and placements made outside of the territories
> > described in Exhibit A shall not qualify for TCCC Support Funding set forth
> > below.

    In addition to the requirements for the purchase and placement of equipment
set forth herein, CCE agrees that it will place all excess units of cold drink
equipment held in inventory as of the date of this Agreement by no later than
December 31, 2001.

> > · Failure to adhere to the minimum purchase requirements for either Venders
> > or Manual Equipment specified above in any one year shall not be deemed to
> > be a violation of this Agreement so long as (1) cumulative equipment
> > purchases for that year meet the Purchase Plan minimums and (2) Vender
> > purchases meet at least eighty percent (80%) of the minimum annual Vender
> > Purchase Plan requirements for that year.

· CCE agrees that only TCCC-authorized Cold Drink Equipment approved for program
coverage will be eligible under this Program.

· At least *** percent (***%) of all Venders purchased over the life of the
program must be 20-oz. contour bottle venders, unless TCCC and CCE mutually
agree otherwise based on market evaluation or other considerations.

***Material has been omitted pursuant to a request for confidential treatment
and filed separately with the SEC.

 

· Incremental purchases in any category (Venders, Manual or Cumulative Equipment
Purchases) may be used to offset shortfalls in any subsequent year in the event
that CCE does not request funding for such incremental purchases in the year of
purchase. Units on which funding for incremental purchases has been paid cannot
be used to offset subsequent shortfalls unless and except to the extent that CCE
refunds any incremental funding attributable to such incremental purchases
within forty-five (45) days after the close of the calendar year in which CCE
seeks to use such units to offset shortfalls.

> > · In the event CCE purchases and places TCCC-authorized glass front venders
> > manufactured by The Maytag Company ("GFVs"), TCCC agrees that each GFV unit
> > will be equivalent to 2 Vender units to be applied towards CCE's minimum
> > Purchase Plan requirements under the Program.

TCCC Support Funding

:

· For the period 1999-2001, TCCC will provide aggregate financial support to CCE
of $509,648,226 ("Base Funding") based upon CCE's purchases of Venders and
Manual Equipment which are placed in the CCE territories identified in Exhibit A
hereto in accordance with the Purchase Plan set forth in Exhibit D to assist CCE
in the construction of an infrastructure to support the increased rate of cold
drink equipment placement. The Base Funding will be paid quarterly at the rates
set forth in Exhibit E to CCE quarterly in arrears for any quarter in which both
Vender and Cumulative Equipment purchases are in compliance with the Annual Plan
on a cumulative basis and CCE is otherwise in compliance with this Agreement in
all respects.

· In addition to the foregoing, in 1999, 2000, and 2001, TCCC will provide
additional financial support to CCE based on excess purchases of Venders or
Manual Equipment if cumulative combined purchases of Venders and Manual
Equipment by CCE for placement in the CCE territories identified in Exhibit A
hereto are in excess of the cumulative Purchase Plan and CCE is otherwise in
compliance with the requirements of the Program ("Incremental Funding"). Such
Incremental Funding shall be paid annually in arrears, unless the parties agree
that such funding may be advanced based on purchases in excess of the Purchase
Plan in any quarter, and shall be calculated in accordance with mutually
agreed-to criteria.

Payment and Administration of TCCC Support Funding:

· In the event of any dispute over the number of units of equipment shipped to
CCE during the calendar quarter, the disputing party may ask the appropriate
manufacturer to provide information to TCCC concerning the number of units
shipped. Upon receipt of any such revised information from a manufacturer, TCCC
may request additional support information from CCE in the form of, among other
items, invoices or shipping documents. With respect to any inaccuracies
regarding the number of units shipped to CCE, TCCC shall make adjustments, if
any, in the TCCC Support Funding based upon all the information provided to it
in accordance with this subparagraph.

· If CCE fails to meet the minimum cumulative requirements of the Purchase Plan
(cumulative purchases less equipment on which Incremental Funding was paid and
is not refunded as set forth above) for any calendar year, TCCC and CCE will
meet to mutually develop a reasonable solution/alternative based on market place
developments, mutual assessment and agreement relative to the continuing
availability of profitable placement opportunities and continuing participation
in the CCE/CCNA market planning process. In the event that no mutually agreeable
solution is developed and cumulative purchases by CCE through the first quarter
of the following calendar year do not remedy any such shortfall (in addition to
meeting the pro rata portion of the Purchase Plan requirement for that quarter),
or in the event that CCE otherwise breaches any material obligation set forth in
this Agreement and such breach is not remedied within ninety (90) days of notice
of such breach, then this Agreement will terminate and CCE will pay to TCCC all
TCCC Support Funding paid by TCCC for this Program to date (including both Base
and Incremental Funding), as well as all TCCC Support Funding paid by TCCC to
CCE in Prior CCE Programs identified on Exhibit B hereto, as well as all funding
paid by TCCC pursuant to the terms and conditions of the Acquired Programs
identified on Exhibit C hereto, plus interest at the rate of one percent (1%)
per month from the date such TCCC Support Funding was paid, or such lesser
amount as may be permitted by law; provided, however, that in the event this
Program or the Prior CCE Programs or the Acquired Programs have been partially
performed by CCE or its predecessors, such repayment obligation shall be reduced
to such amount (if less) as TCCC shall reasonably determine will be adequate to
deliver the financial returns that would have been received by TCCC had all
equipment placement commitments in such programs been fully performed and
throughputs reasonably anticipated by TCCC achieved; and provided further, that
in the event at the time of such termination CCE has fully performed all of the
obligations set forth in any Prior CCE Program or any Acquired Program, then no
TCCC Support Funding paid under such Prior CCE Program or Acquired Program shall
be included in determining CCE's repayment obligation hereunder. CCE and TCCC
agree that any failure of performance by CCE under this section shall be excused
to the extent, and during any period of time, that such failure is caused by an
Act of God, fire, strikes, war, riot, insurrection, boycott, acts of public
authorities, delays or defaults caused by public carriers, inability of
manufacturers to produce or sell cold drink equipment or other cause, whether
similar or dissimilar, beyond the reasonable control of CCE.

·

All Equipment purchased pursuant to this Agreement must be placed in the year of
purchase or on a timely basis within sixty (60) days following such purchase in
order to qualify for TCCC Support Funding hereunder and to be considered for
purposes of compliance with minimum Purchase Plan requirements; provided,
however, that any equipment purchased pursuant to the Program which has not been
placed as of the date of this Agreement shall be deemed to have been placed in a
timely fashion so long as CCE complies with its commitment to place all excess
units in equipment inventory as of such date by no later than December 31, 2001.

Additional Performance Criteria

:

·

CCE agrees to place and keep each unit of cold drink equipment acquired by CCE
in connection with the Program in place at customer locations as specified in
the Annual Plan(s), as well as any existing cold drink equipment currently on
location, for a period of at least twelve (12) years from date of placement,
unless such equipment is rendered inoperable and cannot be reasonably repaired
as the result of mechanical or other similar difficulties, and unless such
equipment is temporarily located in refurbishment centers or warehouses pending
renewed placement in the ordinary course of business.

· During the Program Term, any cold drink equipment which is refurbished by CCE
will be refurbished with the trademarks of TCCC, with the exception of presently
existing contractually required refurbishments using other trademarks or
mutually agreed upon special market conditions.

· CCE agrees that a minimum of ***% of CCE's total inventory of Venders and
Manual Equipment will be identified only by the trademarks of TCCC.

***Material has been omitted pursuant to a request for confidential treatment
and filed separately with the SEC.

 

· The parties acknowledge and agree that one of the primary objectives of this
Agreement is to increase the total number of units of Venders and Manual
Equipment on location in the CCE territories identified in Exhibit A hereto.
Accordingly, CCE agrees to provide TCCC with annual reports certifying (1) the
number of Venders and Manual units funded under this Agreement which were
actually placed at customer locations in the CCE territories identified in
Exhibit A hereto during the preceding year and (2) the total number of Venders
and Manual units (including units in existing inventory and units not funded
under this Agreement) actually on location at the conclusion of such year.

> > · CCE agrees not to sell any used or refurbished Vender with any remaining
> > useful life to any third party during the Term of this Agreement without
> > TCCC's express written consent, except for sales of such Venders to other
> > licensed bottlers of Coca-Cola in the United States.

· CCE also agrees that it will establish, maintain and publish for its employees
a "Flavor Set Standard" which contains the following minimum average
requirements for all Venders and units of Manual Equipment owned by CCE,
including the Program Equipment (unless such requirements are legally
prohibited): (i) on average all slots except *** in Venders will dispense only
products of TCCC and (ii) on average, *** percent (***) of the inventory in any
units of Manual Equipment will be products of TCCC. The Flavor Set Standard will
specify which of the products of TCCC will be sold in Fast Lane Merchandisers.
It is understood by CCE and TCCC that the Flavor Set Standard will apply, on
average, to all bottle or can equipment owned by CCE, whether acquired under the
Program or otherwise. CCE and TCCC shall review the specific terms of the Flavor
Set Standard on an annual basis. Following such review, TCCC shall confirm in
writing the terms of the Flavor Set Standard for the applicable calendar year.

***Material has been omitted pursuant to a request for confidential treatment
and filed separately with the SEC.

· To the extent that products other than those of TCCC ("Competitive Products")
are dispensed in Venders or Manual Equipment purchased in connection with the
TCCC Support Funding, CCE will make a Fair Share payment to TCCC. The Fair Share
payment will be calculated and paid annually based on the availability of
Competitive Products in cold drink equipment purchased by CCE under the Program
in that year. Such payment shall be calculated in the following manner:

    1. As of December 31 of each year throughout the Term, CCE will provide TCCC
with the weighted average of the number of units and the percentage of
Competitive Products in equipment purchased in that year and funded by TCCC
under this Program. Such percentage shall be provided during the certification
process set forth above and, as set forth above, back-up and support for such
calculation shall be provided to TCCC upon request.

    2. Such percentage shall then be multiplied by the total TCCC Support
Funding due to CCE for such year to calculate the Fair Share payment.

    3. Provided that CCE has engaged in mutually agreed to activities designed
to develop infrastructure necessary to support increased cold drink placement
(e.g., hiring additional operating or managerial personnel, expansion of
systems, purchase of service vehicles, etc.), TCCC agrees to reinvest the amount
of such Fair Share payment to support such infrastructure activities. If such
activities have not taken place, the Fair Share payment shall be deducted from
any annual or fourth quarter TCCC Support Funding due to CCE. In the event such
payment exceeds any amount then due and owing to CCE under the Program, the
excess shall be paid to TCCC within ten (10) days of delivery to CCE of the
calculation set forth above.

· CCE acknowledges and agrees that all of the TCCC Support Funding set forth
herein is offered and will be paid by TCCC based on the expectation that CCE
will remain in compliance with all of its bottling agreements pertaining to TCCC
products. In the event that CCE materially breaches any of such bottling
agreements during the Term, or attempts to terminate such agreements absent
breach by TCCC as defined therein, TCCC shall have the right to treat such
action as a breach of this Program, including the right to terminate this
Program in all respects and to recover all sums set forth above.

Reporting Requirements:

· CCE acknowledges that TCCC is providing the TCCC Support Funding in order to
generate incremental sales of TCCC products. For each of the twelve (12) years
following the purchase of equipment under this or any prior Equipment Purchase
Partnership program, CCE will certify annually, as of December 31, that for the
prior twelve (12) months such equipment has generated on average a minimum
volume of *** unit cases (288 ounce equivalents ) of TCCC products per week. In
order to make this certification, CCE may rely solely on its current tracking
systems to determine the average volume per unit of the equipment. In addition,
CCE will utilize its current placement procedure to determine when equipment is
not generating sufficient volume, and CCE will relocate any equipment that is
not generating sufficient volume. Further, CCE will sample a representative
sample of units each year to verify the appropriate volume levels. If there is
an inconsistency between CCE's tracking results and the representative sample of
units, CCE and TCCC will meet to discuss any such inconsistency.

· TCCC reserves the right to audit CCE records regarding the equipment supported
under this Program.

***Material has been omitted pursuant to a request for confidential treatment
and filed separately with the SEC.

 

 

Other Terms:

· No equipment funded hereunder may be moved to a territory not identified in
Exhibit A hereto absent TCCC's express written consent.

· No agreement will be effective to amend this Agreement unless such agreement
is in writing and signed by the party to be charged thereby.

·

This Agreement will be governed by the laws of the State of Georgia.

· This Program is not available in a state in which the terms described herein
are prohibited.

· Except as stated above, as of January 1, 1999, this Agreement supersedes all
similar prior agreements between the parties concerning the placement and
funding of cold drink equipment, in the Coca-Cola bottling territories
identified in Exhibit A hereto, including but not limited to the Prior CCE
Programs identified on Exhibit B hereto and the Acquired Programs identified on
Exhibit C hereto, as well as any and all claims by either party arising from
such prior agreements, excepting only claims for recovery of any funding due and
owing to CCE or its predecessors for performance prior to the effective date of
this Agreement.

· Each party represents that the person whose signature appears below has the
authority necessary to execute this Agreement on behalf of the party indicated.

· This Agreement is not intended to modify or amend the terms or provisions of
any license or distribution agreements in effect between TCCC and CCE.

> > · This Agreement shall be executed simultaneously with (1) 1998-2008 Cold
> > Drink Equipment Purchase Partnership Program between Coca-Cola Bottling
> > Company and Coca-Cola Ltd. dated January 23, 2002; (2) The Cold Drink
> > Equipment Purchase Partnership Program between Coca-Cola Export Corporation
> > and Coca-Cola Enterprises Inc. dated January 23, 2002.

If this accurately reflects our agreement and understanding, please sign where
indicated below and return a signed copy to me.

Sincerely,

THE COCA-COLA COMPANY
Coca-Cola North America Division

By:  S/ J. ALEXANDER M. DOUGLAS, JR.
J. Alexander M. Douglas, Jr.
President and Chief Operating Officer
North American Division

Accepted and Agreed to by

COCA-COLA ENTERPRISES INC.

By:  JOHN R. ALM                                    
President and Chief Operating Officer

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Exhibit A

(CCE Territories)

***    Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC.

 

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***Material has been omitted pursuant to a request for confidential treatment
and filed separately with the SEC.

 

 

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

Exhibit B

Prior CCE Programs

1.  Cold Drink Equipment Purchase Partnership Program dated effective January 1,
1994;

2.  CCE Jumpstart Fair Share Agreement dated effective January 1, 1994;

3.  1996-2000 Cold Drink Equipment Purchase Partnership Program dated effective
January 1, 1996;

4.  Amendment to 1996-2000 Cold Drink Equipment Purchase Partnership Program to
reflect the acquisition by CCE of the geography formerly served by the
Biedenharn ownership group dated effective January 1, 1996;

5  1997-2001 "Dallas Project" Cold Drink Equipment Purchase Partnership Program
dated effective January 1, 1997; 

6.  First Amendment to 1997-2001 "Dallas Project" Cold Drink Equipment Purchase
Partnership Program to incorporate Tier Three ("Gulfstream") Divisions dated
effective January 1, 1998; and 

7.  Second Amendment to 1997-2001 "Dallas Project" Cold Drink Equipment Purchase
Partnership Program to incorporate the geographies served by KONY and Hoffman
ownerships dated effective January 1, 1998.

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Exhibit C

Acquired Programs

1.  Cold Drink Equipment Purchase Partnership Program dated effective January 1,
1995 between The Coca-Cola Company and Coca-Cola Bottling Company West, Inc. and
as amended by letter agreement dated July 25, 1995.

2.  Cold Drink Equipment Purchase Partnership Program dated effective January 1,
1994 between The Coca-Cola Company and The Coca-Cola Bottling Company of New
York, Inc. and/or its subsidiaries and Amendment to Cold Drink Equipment
Purchase Partnership Program dated February 10, 1997.

3.  Cold Drink Equipment Purchase Partnership Program dated December 8, 1995
(effective January 1, 1996) between The Coca-Cola Company and Southwest
Coca-Cola Bottling Company, Inc., Coca-Cola Bottling Company of the Southwest,
Alva Coca-Cola Bottling Company, Inc., and Woodward Coca-Cola Bottling Company,
and as amended by letter agreement dated December 8, 1995.

4.  Cold Drink Equipment Purchase Partnership Program dated effective January 1,
1994 between The Coca-Cola Company and Cameron Coca-Cola Bottling Company, Inc.

5.  Cold Drink Equipment Purchase Partnership Program dated effective January 1,
1997 between The Coca-Cola Company and Sulphur Springs Coca-Cola Bottling
Company.

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Exhibit D

Purchase Plan

Annual Venders

Annual Manual

Annual Total

Cumulative

1999

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2006

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2007

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2008

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1,200,174

***    Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC.

 

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

Exhibit E

Base Funding

Base Funding shall be paid in 1999 at the rate of $44,641,079 per quarter. Base
Funding shall be paid in 2000 at the rate of $31,000,000 in the first quarter of
2000; $30,783,910 in the second quarter of 2000; $61,000,000 in the third
quarter of 2000; and $51,000,000 in the fourth quarter of 2000. Base Funding
shall be paid in 2001 at the rate of $39,325,000 per quarter.