Exhibit 10.2

 

December 21, 2005

 

Coca-Cola Bottling Company

42 Overlea Blvd.

Toronto, Ontario

M4H 1B8

 

Attention:

   Mr. William W. Douglas, III      Senior Vice President, Finance

 

Dear Bill:

 

Re:

   1998-2010 Cold Drink Equipment Purchase      Partnership Program (“Program”)

 

This letter agreement (the “Agreement”) restates in its entirety and further
amends:

 

the letter agreement dated January 23, 2002 among Coca-Cola Ltd. (“CCL”) and
Coca-Cola Bottling Company (“CCBC”), as amended by letter agreement dated
August 9, 2004 (and alternative performance accepted by letters dated
December 19, 2003 and December 31, 2004), which letters were an amendment and
restatement of two certain letter agreements between Coca-Cola Ltd. and
Coca-Cola Beverages Ltd. and the latter’s subsidiary Coca-Cola Bottling Ltd.
(Coca-Cola Beverages Ltd. and Coca-Cola Bottling Ltd. having amalgamated and
changed their name to Coca-Cola Bottling Company), the first such agreement
being dated June 30, 1998 and the second such agreement being dated December 23,
1998 (the foregoing December 31, 2004, August 9, 2004, December 19,
2003, January 23, 2002, December 23, 1998 and June 30, 1998 agreements and
letters are referred to herein as the “Prior Agreements”).

 

This Agreement sets forth the proposal of CCL to CCBC, which holds Coca-Cola
bottling contracts (the “Bottling Contracts”) for the territories set out in
such Bottling Contracts comprising ninety-eight percent (98%) of the country of
Canada (hereafter referred to as the “Business Unit”), with respect to the above
and which upon acceptance by CCBC shall constitute our agreement and
understanding regarding the Program for the purpose of superseding the Prior
Agreements and all prior cold

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drink equipment programs between the parties as set out in Exhibit A attached
hereto (“Prior Program(s)”). This Program covers, and any reference to the
Business Unit in this letter shall mean, only those territories in the
above-referenced country of Canada currently served by CCBC pursuant to the
Bottling Contracts in Canada as of the date of this Agreement. In the event that
CCBC acquires any other bottler, or acquires the bottling rights to any
additional territory, this Program shall not cover such territory and equipment
purchased for placement in such territory shall not be eligible for funding
hereunder absent CCL’s consent and adjustment of the Purchase Plan set forth
herein. The meaning of Business Unit as set out herein shall be controlling for
purposes of this Program, regardless of any subsequent CCBC Business Unit
realignment, and placements made outside the Business Unit as defined herein
shall not qualify for funding hereunder. However, CCL and CCBC will execute an
amendment to this Agreement to include the cold drink equipment purchases in an
acquired territory under this Program if the parties mutually agree that cold
drink equipment purchases in an acquired territory increase cold drink
penetration.

 

Confidentiality:

 

The terms and conditions of this Agreement are acknowledged by CCL and CCBC 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 for the following: (1) each parties’ parent corporation; (2) as required
by law; and (3) the confidentiality obligation shall not extend to information
which: (a) the receiving party can show was known to it as a matter of record at
the time of receipt; (b) is part of the “public domain” or otherwise bona fide
available to the general public through sources entitled to disclose the same;
or (c) subsequently obtained lawfully from a third party without any obligation
of secrecy.

 

Term:

 

Except as otherwise provided herein, the term of this Agreement is thirteen
(13) years, beginning as of January 1, 1998 and ending December 31, 2010
(“Term”). If CCBC is required to perform any obligations of the Program after
the end of the thirteen-year Term, such obligations of CCBC shall remain in
effect beyond the thirteen-year Term.

 

Purchase Plan:

 

  •   CCBC agrees to commit to an annual development program (“Plan”) developed
jointly with CCL which includes: quarterly purchases and placement of new
automatic vending machines used to sell or merchandise cold drink products
(“Vendors”) and manual equipment, including but not limited to glass door
merchandisers and fast lane merchandisers, used to sell or merchandise cold

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drink products (“Manual Equipment”); agreed upon minimum purchase schedules for
Vendors and Manual Equipment; and a “Flavour Set Standard” during each of the
thirteen years of the Term. The Plan will be developed each calendar year in
conjunction with the annual business plan. If the parties mutually agree to an
annual Plan for any of 2006-2010 that modifies the mix of Annual Vendors and
Annual Manual Equipment units of the Purchase Plan attached as Exhibit B, the
annual Plan will be used in lieu of the Purchase Plan and will be deemed to be
the Purchase Plan for the remainder of the Term (unless further modified by
mutual agreement of the parties, and any subsequent mutually agreed annual Plan
modifications will be deemed to be the Purchase Plan for the remainder of the
Term). If the parties are unable to reach agreement on an annual Plan for any of
2006-2010, the Purchase Plan last mutually agreed to by the parties will
continue to apply. The annual Plan may be subsequently modified as agreed by the
parties based on market place developments during the course of the year,
material currency exchange issues, mutual assessment and agreement relative to
the continuing availability of profitable placement opportunities and continuing
participation in the annual CCBC/CCL market planning process. Any mutual
agreement of the parties to modify the Purchase Plan will be memorialized in a
letter signed by both parties.

 

Effective January 1, 2005, in any year that Coca-Cola Enterprises Inc. (“CCE”)
purchases and places in the United States any Vendors, Glass Front Vendors,
Intelligent Vendor Kits, Next Generation Vendors, Manual Equipment or Energy
Coolers (all as described below) in excess of the requirements of the Purchase
Plan applicable to CCE under its letter agreement with The Coca-Cola Company
dated December 20, 2005, then any excess units for any specific type of
equipment may be credited to CCBC under this Agreement (but only up to a maximum
of 50% of the credits required of CCBC under the Purchase Plan for that year) in
determining whether CCBC has met the annual credit requirements for each
specific type of equipment under this Agreement (e.g., Glass Front Vendors for
Glass Front Vendors, Energy Coolers for Energy Coolers, etc.) for that same
year.

 

  •   As part of the Plan, CCBC agrees to purchase and place, at a minimum, Cold
Drink Equipment totaling 236,305 cumulative credits in the Business Unit over
the thirteen (13) year period from and including 1998 to 2010 (as provided in
Exhibit B). In computing the number of Vendor credits or Manual credits, a
single cold drink Vendor unit or single Manual unit shall count as one
(1) credit, except where alternative credits are provided in this Agreement (the
“Alternative Credits”).

 

  •   Effective January 1, 2005, failure to adhere to the minimum purchase and
placement requirements for either Vendors or Manual Equipment credits in any one
year shall not be deemed to be a violation of this Agreement so long as (1) the
cumulative equipment purchase credits for that year meet at least 80% of the
minimum Annual Total Purchase Plan credit requirements for that year as set
forth in the Purchase Plan attached to this Agreement as Exhibit B (or as may be
modified per the annual Plan process), (2) within 30 days following the end of
the calendar year in which a shortfall occurs, CCBC pays to CCL an amount
calculated by multiplying U.S. $*** times the number of credits by

 

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

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which CCBC failed to meet the requirements of the Purchase Plan, (3) CCBC’s
purchases and placements of Vendors and Manual Equipment credits for the
following calendar year remedy the shortfall from the prior year for the
specific number of Vendors, Glass Front Vendors, Intelligent Vendor Kits, Next
Generation Vendors, Manual Equipment and Energy Coolers by which CCBC was below
the Purchase Plan in the prior year (in addition to meeting the Purchase Plan
requirements for such following calendar year, except as purchases are permitted
to be deferred as set forth in this paragraph), and (4) CCBC meets its Annual
Total credit and Cumulative Purchase Plan credit requirements as of the end of
Year 13 (2010), as set forth in the Purchase Plan attached to this Agreement as
Exhibit B (or as may be modified per the annual Plan process). Beginning
January 1, 2005, in determining whether CCBC has met the Purchase Plan credit
requirements, the Alternative Credits described in this Agreement will be
incorporated in such calculations.

 

  •   Effective January 1, 2005, in the event CCBC purchases and places
CCL-authorized glass front vendors (“GFVs”), CCL agrees that each GFV unit will
be equivalent to 2 Vendor credits to be applied toward CCBC’s minimum purchase
plan requirements under the Program (this 2:1 credit for GFVs is an “Alternative
Credit” under the Agreement).

 

  •   Effective January 1, 2005, in the event CCBC purchases and installs on
Vendors CCL-authorized Intelligent Vendor Kits that provide credit card
capability, electronic data gathering capability and electronic locks for the
Vendor, CCL agrees that, for 2005 and 2006, six (6) such Intelligent Vendor Kits
will be equivalent to one (1) Vendor credit to be applied toward CCBC’s minimum
purchase plan requirements under the Program (this 1:6 credit for Intelligent
Vendor Kits is an “Alternative Credit” under this Agreement). CCL and CCBC agree
that the impact of the Intelligent Vendor Kits will increase average Vendor
throughput. At the end of 2006 and at the end of each of the remaining years of
the Term, as part of the annual business planning process, CCBC and CCL will
attempt to mutually agree whether the substitution ratio for Intelligent Vendor
Kits should be revised for the remainder of the Term, and, if the parties agree
that the ratio should be changed, the parties will mutually agree upon the
revised substitution ratio to be used for the remainder of the Term. If the
parties are unable to mutually agree by the end of the annual business planning
session upon the substitution ratio for Intelligent Vendor Kits to be used for
the remainder of the Term, then six (6) Intelligent Vendor Kits will continue to
be counted as one (1) Vendor unit to be applied toward CCBC’s minimum Purchase
Plan credit requirements under the Program.

 

  •   Effective January 1, 2005, in the event CCBC purchases and places “Energy
Coolers,” CCL agrees that each Energy Cooler will be equivalent to *** Manual
credits to be applied towards CCBC’s minimum Annual Manual credit requirement
(this *** credit for Energy Coolers is an “Alternative Credit” under the
Agreement). For purposes of this Agreement, an “Energy Cooler” will be one that
dispenses primarily one or more of: (1) the following beverage products: Full
Throttle (diet and regular); Full Throttle Fury (diet and regular); Coke Blak;
Tab Energy; Powerade Advance; Rock Star (diet and regular); Von Dutch (diet and
regular), and any other products under trademarks owned by or

 

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

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licensed to CCL, TCCC or its wholly-owned subsidiaries for use of such
trademarks in Canada, or for which distribution rights have been granted to CCL,
TCCC or its wholly-owned subsidiaries for Canada, which the parties may mutually
agree in writing are “energy” drinks; (2) any beverages that are brand or line
extensions of the foregoing; and (3) any other beverage brand owned by or
licensed to CCL, The Coca-Cola Company or any of its subsidiaries or where
distribution rights have been granted to any of the foregoing that is
characterized as an “energy” drink.

 

CCL and CCBC agree that CCL’s average gross profit from Energy Coolers as
calculated by CCL as of the date this Agreement is signed by both parties (the
“Expected Gross Profit”) is greater than that of the average gross profit of
other Manual Equipment. At the end of 2006 and at the end of each of the
remaining years of the Term, as part of the annual business planning process, if
CCL’s actual average gross profit (average weekly throughput times average gross
profit per case) from the Energy Coolers is 20% or more below the Expected Gross
Profit , then, in order to offset the financial impact of this difference, the
Alternative Credit to be used for Energy Coolers for the next calendar year and
the remainder of the Term will be adjusted downward and the parties will agree
on a new mix of Vendors, Manual Equipment and Energy Coolers required to offset
the financial impact of the above-referenced difference. If CCL’s average gross
profit is 20% or more above the Expected Gross Profit, then the parties will
mutually agree how to best utilize the excess gross profit of CCL and CCBC.

 

  •   Effective January 1, 2005, in the event CCBC purchases and places
CCL-authorized Next Generation Vendors, which are new vendors that are built to
include an improved consumer interface, improved equipment reliability,
increased brand/package flexibility, credit card capability, an electronic lock
system and electronic data gathering capability, CCL agrees that each such Next
Generation Vendor unit will be equivalent to 1.5 Vendor credits to be applied
toward CCBC’s minimum Purchase Plan requirements under the Program (this 1.5:1
credit for Next Generation Vendors is an “Alternative Credit” under the
Agreement).

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CCL Support Funding:

 

  •   For the period 1998–2000, CCL will provide aggregate financial support to
CCBC of $112,199,955 (the “Funding”) based upon CCBC’s purchases of Vendors and
Manual Equipment which are placed in the Business Unit in accordance with the
Plan provided in Exhibit B to assist CCBC in the construction of an
infrastructure to support the increased rate of cold drink equipment placement.
The Funding will be paid to CCBC quarterly in arrears for any quarter in which
both Vendor and Cumulative Equipment purchases are in compliance with the Plan
on a cumulative basis and CCBC is otherwise in compliance with this Agreement in
all material respects. The Funding shall be paid in accordance with Exhibit C
attached.

 

  •   In view of the fact that fewer units of cold drink equipment will be
purchased and placed in the Business Unit in 2004 and 2005 than originally
planned pursuant to the Prior Agreements, and for the fact that approximately
half of the purchases and placements originally planned for 2004 and 2005 will
now occur in 2009 and 2010, CCBC agrees to pay CCL a total of $2,000,000 US as
follows: $200,000 US annually in years 2004 and 2009, and $400,000 US annually
in years 2005 through and including 2008. Provided, however, that if CCBC shall
have satisfied its purchase and placement commitments prior to 2010, CCBC shall
have no obligation to make a payment hereunder for any year following the year
in which the commitments were fully satisfied.

 

Payment and Administration of Funding:

 

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

 

  •   If CCBC fails to meet the minimum cumulative requirements of the Plan for
any Agreement Year, CCL and CCBC will meet to mutually develop a reasonable
solution/alternative. In the event that no mutually agreeable solution is
developed and cumulative purchases by CCBC through the first quarter of the
following Agreement Year do not remedy any such shortfall (in addition to
meeting the pro rata portion of the Plan requirement for that quarter), or in
the event that CCBC 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 CCBC will pay to CCL all
Funding paid by CCL for this Program to date, as well as all funding paid by

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CCL to CCBC pursuant to the Prior Program(s), plus interest at the rate of one
percent (1%) per month from the date any such funding was paid, or such lesser
amount as may be permitted by law; provided, however, that in the event this
Program or the Prior Program(s) have been partially performed by CCBC, such
repayment obligation shall be reduced to such amount (if less) as CCL shall
reasonably determine will be adequate to deliver the financial returns that
would have been received by CCL had all equipment placement commitments in such
programs been fully performed and throughputs reasonably anticipated by CCL
achieved. CCBC and CCL agree that any failure of performance by CCBC 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
CCBC.

 

  •   Effective January 1, 2005, all Equipment purchased pursuant to this
Agreement, which includes Vendors, GFVs, Intelligent Vendor Kits, Next
Generation Vendors, Manual Equipment and Energy Coolers, must be placed (or, in
the case of Intelligent Vendor Kits, installed on Vendors that have been placed)
in the year of purchase or on a timely basis within sixty (60) days following
such purchase in order to qualify for Funding hereunder and to be considered for
purposes of compliance with minimum purchase plan requirements under the Plan.

 

Additional Performance Criteria:

 

  •   Subject to compliance with any law or regulation, CCBC agrees to place and
keep each unit of cold drink equipment acquired by CCBC in connection with the
Program (other than Energy Coolers and Intelligent Vendor Kits) in place at
customer locations within the Business Unit, 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.
If CCBC is prevented by law or regulation from adhering to the terms of this
paragraph, then the parties will agree upon alternate performance by CCBC so
that CCL receives the same value in performance by CCBC as contemplated by this
paragraph.

 

  •   Effective January 1, 2005, CCBC agrees that, subject to compliance with
any law or regulation, Energy Coolers acquired in connection with the Program
will remain in place at customer locations for at least twelve (12) years from
date of placement. If such equipment is rendered inoperable and cannot be
reasonably repaired as the result of mechanical or other similar difficulties,
CCBC shall purchase replacement Energy Coolers to replace the inoperable unit
for the remainder of its twelve (12) years, and such replacement coolers will
not count toward satisfying the purchase requirements of this Agreement. If CCBC
is prevented by law or regulation from adhering to the terms of this paragraph,
then the parties will agree upon alternate performance by CCBC so that CCL
receives the same value in performance by CCBC as contemplated by this
paragraph.

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  •   Effective January 1, 2005, CCBC agrees that if an Intelligent Vendor Kit
acquired by CCBC in connection with the Program is installed on a Vendor, an
Intelligent Vendor Kit must be kept on the Vendor for the Vendor’s remaining
years of useful life.

 

  •   CCBC agrees that, unless it is prohibited by law or pre-existing contract
(contract must pre-exist June 30, 1998, the date this Agreement was originally
entered into by the parties) , a minimum of *** percent (***%) of CCBC’s
existing inventory of Vendors (including GFVs, Vendors with Intelligent Vendor
Kits and Next Generation Vendors) and Manual Equipment (including Energy
Coolers) and *** percent (***%) of purchases of Vendors (including GFVs, Vendors
with Intelligent Vendor Kits and Next Generation Vendors) and Manual Equipment
(including Energy Coolers) under the Plan will be identified only by the
trademarks, logos, designs and similar marks and graphic presentations of CCL
and The Coca-Cola Company and its subsidiaries and that no trademarks, logos,
designs and similar marks and graphic presentations of any other entity other
than CCL or The Coca-Cola Company or its subsidiaries (“Competitive Trademarks”)
shall appear on any such equipment, except that:

 

  •   Competitive Trademarks may appear on flavour buttons or other similar
product identifiers identifying products other than those of CCL and The
Coca-Cola Company (“Competitive Products”) on Vendors, provided the Flavour Set
Standard set out below is adhered to; and

 

  •   Competitive Trademarks may be represented on Manual Equipment for the
purpose of conveying pricing information, provided such representations are
approved by CCL.

 

  •   CCBC agrees that (i) it will not convert, in connection with a
reconditioning program or otherwise, Company Trademarks to Competitive
Trademarks on any Vendors or Manual Equipment owned by CCBC; and (ii) unless it
is prohibited by contract or law, CCBC will convert Competitive Trademarks to
Company Trademarks at the time CCBC refurbishes any Vendors or Manual Equipment
which CCBC owns.

 

  •   The parties acknowledge and agree that one of the primary objectives of
this Agreement is to increase the total number of units of Vendors and Manual
Equipment on location in the Business Unit. Accordingly, effective January 1,
2005, CCBC agrees to provide CCL with annual reports by January 15 of each year
(current as of December 31 of the prior year) certifying (1) the number of
Vendors, GFVs, Intelligent Vendor Kits, Next Generation Vendors, Manual
Equipment units and Energy Coolers funded under this Agreement which were
actually placed at customer locations (or, in the case of Intelligent Vendor
Kits, installed on Vendors that are placed at customer locations) in the
Business Unit during the preceding year, and (2) the total number of Vendors,
GFVs, Intelligent Vendor Kits, Next Generation Vendors, Manual Equipment units
and Energy Coolers (including units in existing inventory and units not funded
under this Agreement) actually at customer locations at the conclusion of such
year.

 

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

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  •   CCBC agrees not to sell any new, used or refurbished cold drink equipment
funded under this Agreement with any remaining useful life to any third party
during the Term of this Agreement without CCL’s express written consent.

 

  •   CCBC also agrees that it will establish, maintain and publish for its
employees “Flavour Set Standards” which contain the following minimum average
requirements for all Vendors, GFVs, Vendors with Intelligent Vendor Kits, Next
Generation Vendors, units of Manual Equipment and Energy Coolers owned by CCBC,
including similar equipment owned by CCBC whether or not purchased pursuant to
the Program (unless such requirements are prohibited by law or contract): (i) on
average the aggregate of all slots except *** of such slots on all Vendors,
GFVs, Vendors with Intelligent Vendor Kits, and Next Generation Vendors will
dispense only products (a) marketed under trademarks owned by or licensed to
CCL, The Coca-Cola Company or any of its wholly-owned subsidiaries for use of
such trademarks in Canada or (b) for which distribution rights have been granted
to CCL or TCCC or its wholly-owned subsidiaries for Canada (with the
understanding that CCBC and CCL will collaborate to develop “Flavour Set
Standards” which will achieve an average aggregate requirement that all slots on
all Vendors, GFVs, Vendors with Intelligent Vendor Kits, and Next Generation
Vendors except *** of such slots will dispense only products of CCL) and (ii) on
average, *** percent (***%) of the inventory in any units of Manual Equipment
and Energy Coolers will be products (a) marketed under trademarks owned by or
licensed to CCL, The Coca-Cola Company or any of its wholly-owned subsidiaries
for use of such trademarks in Canada or (b) for which distribution rights have
been granted to CCL or TCCC or its wholly-owned subsidiaries for Canada, subject
to the requirement that such percentage shall increase to *** percent
(***%) upon such time that CCBC commences to distribute a packaged water owned,
directly or indirectly, by The Coca-Cola Company. The Flavour Set Standard will
specify which of the products marketed under trademarks owned by or licensed to
CCL, TCCC or any of its wholly-owned subsidiaries for use of such trademarks in
Canada or products for which distribution rights have been granted to CCL or
TCCC or its wholly-owned subsidiaries for Canada will be sold in Fast Lane
Merchandisers. It is understood by CCBC and CCL that the Flavour Set Standard
will apply, on average, to all bottle or can equipment owned by CCBC, whether
acquired under the Program or otherwise. CCBC and CCL shall review the specific
terms of the Flavour Set Standard on an annual basis. Following such review, CCL
shall confirm in writing the terms of the Flavour Set Standard for the
applicable calendar year.

 

  •   To the extent that Competitive Products are dispensed in Vendors or Manual
Equipment purchased in connection with the Funding, CCBC will make a Fair Share
payment to CCL. The Fair Share payment will be calculated and paid annually
based on the availability of Competitive Products in cold drink equipment
purchased by CCBC under the Program in that year. Such payment

 

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

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shall be calculated in the following manner:

 

  1. As of January 15 of each year throughout the Term, CCBC will provide CCL
with the weighted average of the number of units and the percentage of
Competitive Products in equipment purchased in the prior year and funded by CCL
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 CCL upon request.

 

  2. Such percentage shall then be multiplied by the total Funding due to CCBC
for such year to calculate the Fair Share payment. That payment shall then be
deducted from any annual or fourth quarter funding due to CCBC.

 

  3. Provided that CCBC 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.) CCL 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 funding due to CCBC. In the event such payment
exceeds any amount then due and owing to CCBC under the Program, the excess
shall be paid to CCL within ten (10) days of delivery to CCBC of the calculation
set forth above.

 

  •   CCBC acknowledges and agrees that all of the Funding set forth herein is
offered and will be paid by CCL based on the expectation that CCBC will remain
in compliance with all of its bottling agreements pertaining to CCL Products. In
the event that CCBC materially breaches any of such bottling agreements during
the Term, or attempts to terminate such agreements absent breach by CCL as
defined therein, CCL 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:

 

  •   CCBC acknowledges that CCL is providing the Funding in order to generate
incremental sales of CCL products. CCBC will certify by January 15 of each year
(current as of December 31 of the prior year) for each of the twelve (12) years
following the placement of equipment purchased under the Program or any prior
Equipment Purchase Partnership program that, for the prior twelve (12) months,
the equipment (except Energy Coolers, for which the reporting process is
described below) has generated on average a minimum volume of 3.9 unit cases
(288 ounce equivalents) of CCL products per Alternative Credit per week.
Beginning January 1, 2005, however, as Intelligent Vendor Kits are purchased in
substitution for Vendors, as described above in the “Purchase Plan” section, the

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minimum average throughput requirement for each calendar year will be increased
by CCL to reflect the increased throughtput generated by the Intelligent Vendor
Kits. In addition, CCBC, to the best of its ability, will separately report the
average volume throughput for Vendors equipped with Intelligent Vendor Kits. In
order to make this certification, CCBC may rely solely on its current tracking
systems to determine the average volume per unit of the equipment. In addition,
CCBC will utilize its current placement procedure to determine when equipment is
not generating sufficient volume, and CCBC will relocate any equipment that is
not generating sufficient volume. Further, CCBC will sample a representative
sample of units each year to verify the appropriate volume levels. If there is
an inconsistency between CCBC’s tracking results and the representative sample
of units, CCBC and CCL will meet to discuss any such inconsistency.

 

  •   During 2006, CCBC agrees to develop a mutually agreeable method of
measuring average throughput of brands (by package) for Energy Coolers. This
throughput will be reported to TCCC during each annual business planning process
and used in the calculations described above in the 6th bullet point of the
“Purchase Plan” section.

 

  •   CCL reserves the right to audit CCBC records regarding the equipment
supported under this Plan upon reasonable notice.

 

Other Terms:

 

  •   No agreement will be effective to amend the Agreement unless such
agreement is in writing and signed by the parties to this Agreement.

 

  •   The Agreement will be governed by the laws of the Province of Ontario.

 

  •   All dollar amounts referred to in this Agreement are in Canadian funds
unless otherwise indicated.

 

  •   The determination that any provision of this Agreement is invalid or
unenforceable shall not invalidate this Agreement, and this Agreement shall be
construed and performed in all respects as if such invalid or unenforceable
provisions were omitted provided that in so doing the primary purpose of this
Agreement is not impeded.

 

  •   Except as stated above, this Agreement supersedes all similar prior
agreements between the parties concerning the placement and funding of cold
drink equipment in the Business Unit, including but not limited to the
aforementioned Prior Agreements and Prior Program(s), as well as any and all
claims by either party arising therefrom.

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

 

  •   The Agreement is not intended to modify or amend the terms or provisions
of any license or distribution agreements in effect between CCL and CCBC.

 

  •   CCL and CCBC agree that this Agreement may be executed in counterparts and
if so executed in counterparts, will be enforceable and effective upon the
exchange of executed counterparts or the exchange of facsimile transmissions of
the executed counterparts. CCL and CCBC each expressly acknowledge that this
letter agreement was negotiated at arms’ length, is valid and enforceable
according to its terms, and is supported by adequate consideration.

 

  •   This Agreement shall be executed simultaneously with the letter agreement
dated December 20, 2005 between The Coca-Cola Company and Coca-Cola Enterprises
Inc.

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

 

Sincerely,

COCA-COLA LTD.

By:

 

/s/ Silvana Alzetta-Reali

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Silvana Alzetta-Reali

Title:

 

Vice President, Secretary

   

and Division Counsel

Accepted and Agreed to by:

COCA-COLA BOTTLING COMPANY

By:

 

/s/ William W. Douglas, III

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William W. Douglas, III

Title:

 

Senior Vice President,

Finance

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EXHIBIT A

PRIOR PROGRAM(S)

 

Cold Drink Acquisition Program between Coca-Cola Beverages Ltd. and Coca-Cola
Ltd. dated March 1, 1996.

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EXHIBIT B

 

Material has been omitted pursuant to a request for confidential treatment and

filed separately with the SEC***

 

     Annual
Venders

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   Annual GF
Venders

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   Annual
Vender
Credits

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   Annual
Manual

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   Annual
Energy
Coolers

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   Annual
Manual
Credits

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

   Total
Annual
Credits

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

   Cumulative
Credits

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

1998

   ***    ***    ***    ***    ***    ***    ***    ***

1999

   ***    ***    ***    ***    ***    ***    ***    ***

2000

   ***    ***    ***    ***    ***    ***    ***    ***

2001

   ***    ***    ***    ***    ***    ***    ***    ***

2002

   ***    ***    ***    ***    ***    ***    ***    ***

2003

   ***    ***    ***    ***    ***    ***    ***    ***

2004

   ***    ***    ***    ***    ***    ***    ***    ***

2005

   ***    ***    ***    ***    ***    ***    ***    ***

2006

   ***    ***    ***    ***    ***    ***    ***    ***

2007

   ***    ***    ***    ***    ***    ***    ***    ***

2008

   ***    ***    ***    ***    ***    ***    ***    ***

2009

   ***    ***    ***    ***    ***    ***    ***    ***

2010

   ***    ***    ***    ***    ***    ***    ***    236,305

 

Where applicable, “Credit” reflects “Alternative Credits” as provided in the
Agreement.

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EXHIBIT C

 

CCL SUPPORT FUNDING PAYMENT SCHEDULE

 

YEAR

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

   PERIOD

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   AMOUNT $

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1998

   Q1    $ 10,000,000

1998

   Q2    $ 12,500,000

1998

   Q3    $ 10,000,000

1998

   Q4    $ 26,650,000

1999

   Q1    $ 6,306,250

1999

   Q2    $ 8,106,250

1999

   Q3    $ 8,106,250

1999

   Q4    $ 8,106,250

2000

   Q1    $ 5,606,250

2000

   Q2    $ 5,606,250

2000

   Q3    $ 5,606,250

2000

   Q4    $ 5,606,250