EXHIBIT 10
THE COCA-COLA EXPORT
CORPORATION
Atlanta, Georgia
Ms. Dominique Reiniche
President – European Group
Coca-Cola Enterprises Inc.
Re: Cold Drink
Equipment Purchase Partnership Program of 23 January
2002
Dear Ms. Reiniche:
Reference is made to (i) the Cold
Drink Equipment Purchase Partnership Program letter agreement dated
23 January 2002 (“Jumpstart Agreement”) (a copy of
which is attached to this letter in Annex 1) and (ii) our
discussions regarding the manner in which we could maximize the
mutual benefit of the Jumpstart Agreement starting in
2004.
The intent of this letter is to
describe the guiding principles under which The Coca-Cola Export
Corporation (hereinafter referred to as “TCCEC”) and
Coca-Cola Enterprises Inc. (hereinafter referred to as
“CCE”) will work to make the Jumpstart Agreement more
effective, along with certain amendments of the Jumpstart
Agreement, starting 1 January 2004. All capitalized terms used
herein shall have the same meaning as in the Jumpstart Agreement
unless clearly indicated otherwise.
1. Guiding
Principles
Based on our discussions, we have
set forth the following guiding principles (hereinafter referred to
as the “Guiding Principles”) which provide us a
foundation for the amendments that follow in Section 2:
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1.
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Our Jumpstart Agreement
investment decisions need to be driven by our common objective to
improve revenue management through accelerated immediate
consumption volume, revenues and system profit.
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2.
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It is clearly understood that any
interpretation to the Jumpstart Agreement needs to insure the
continued viability of TCCEC’s intangible asset, and provide
CCE with a means to continue to amortize its deferred
revenue.
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3.
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Annual performance measures, both
those related to purchases and placements and those related to
equipment performance, need to be directly related to revenue
management principles, logical and simple to use by both TCCEC and
CCE management.
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2.
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Amendments of Certain
Sections of the Jumpstart Agreement
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Based on the Guiding Principles,
TCCEC and CCE henceforth amend the Jumpstart Agreement as follows
effective 1 January 2004:
(A) Territories
The Jumpstart Agreement shall
apply uniformly to all Territories. As a result, the Vendors and
Coolers Purchase and Placement Targets by country in Appendix 1
through 4 of the Jumpstart Agreement are henceforth consolidated
and shall only be measured on an all Territories level, along the
criteria described in Section 4 of the Jumpstart
Agreement.
(B)
Equipment
The Jumpstart Agreement shall
apply uniformly to all types of cold drink equipment, with the
exception of classical-type fountain equipment. As a result, the
Cooler and Vendor Purchase and Placement Targets by type of
equipment in Appendix 1 through 4 of the Jumpstart Agreement are
henceforth consolidated and shall only be measured on a total
equipment level.
TCCEC and CCE recognize that the
revenue and volume throughput realized by the various types of cold
drink equipment can vary dramatically.
In order to take this into
account, CCE and TCCEC shall henceforth count the number of
Equivalent Units of cold drink equipment that shall apply to the
Vendors and Coolers Purchase and Placement Targets in Appendix 1
through 4 of the Jumpstart Agreement as shown in the following
table:
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Type of
Equipment
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Model
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Equivalent Units
of Cold Drink
Equipment
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Glass Door
Coolers
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•
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Single door
cooler
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1
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•
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Double door
cooler
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1
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Open Front
Coolers
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•
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50cl PET
capacity up to 575
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2.16
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•
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Capacity
between 576 and 805
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2.36
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•
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Capacity
between 806 and 1035
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2.65
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•
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For each
further capacity increase
of 230 50cl PET bottles or part
thereof
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0.25 additional units
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Other
Coolers
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Punto
Fresco
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1
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Igloo
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1
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Half door
cooler
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1
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Counter
Top/Cafe
cooler
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1
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Vendors
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All
types
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1
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of the Jumpstart Agreement, that excess can be used to reduce
the following year's target on a one-for-one Equivalent Unit basis.
In addition, Open Front Coolers in Great Britain and France shall
be subject to a minimum net incremental placement percentage of 95%
(Reference Appendix 1 and 2) and Open Front Coolers for all
territories shall be subject to a minimum average throughput,
monitored every 12 months for 2004 and 2005, according to the
following table:
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Open Fronted Cooler Model
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Minimum annual
volume throughput
of KO Brands unit
cases/year
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•
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50cl PET
capacity up to 575
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407
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•
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Capacity
between 576 and 805
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444
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•
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Capacity
between 806 and 1035
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488
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•
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For each
further capacity increase of 230 50cl PET bottles
or part thereof
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40
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(C) Leasing of Coolers and
Vendors
In order to finance certain
projects mutually beneficial for CCE and TCCEC, CCE intends to
explore alternative financing of certain Coolers and Vendors. This
alternative financing may include long-term leasing contracts. CCE
shall henceforth count Coolers and Vendors under lease as purchased
Coolers and Vendors for purposes of Section 6.0 of the Jumpstart
Agreement, under the following conditions:
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•
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The minimum
lease period, exclusive of buy-out options, is at least six
years.
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•
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Buy-outs of
Coolers and Vendors under lease shall not count as purchases.
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•
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In the event a
lease term is less than 12 years, CCE commits to replace the leased
equipment with a like-type of equipment at the end of the lease
term and the replacement equipment shall not count as a
purchase.
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(D) Quarterly
Commitments
Taking into account the quarterly
fluctuations of purchases, the Jumpstart Agreement shall henceforth
focus solely on the annual commitments as described in Appendix 1
through 4 of the Jumpstart Agreement. As a result, failure to meet
the minimum annual purchases of new Coolers and new Vendors for the
end of a quarter (except for the fourth quarter) shall no longer
constitute noncompliance with Section 7.3 of the Jumpstart
Agreement.
(E) 50cl
PET Contour Bottle Vendor Requirement
CCE shall henceforth be
de
