Marketing Agreement - Dr. Pepper/Seven Up. Inc. and Rubio's Restaurants Inc.
AGREEMENT
This AGREEMENT, (the "Agreement") is executed and entered into this 23rd day of
June, 1998, by and between Dr Pepper/Seven Up, Inc. ("Dr Pepper") and Rubio's
Restaurants, Inc. (the "Fountain Account').
WITNESSETH:
WHEREAS, the marketing plan described in this Agreement has been offered to the
Fountain Account as a result of Dr Pepper's understanding that the Fountain
Account has received an offer from a competitor of Dr Pepper with regard to the
purchase of that competitor's post-mix products; and
WHEREAS, Dr Pepper is willing to make a competitive offer by means of the
marketing plan set forth herein to ensure the availability of DR PEPPER post-mix
products (collectively the "Product') in the Restaurants (as hereinafter defined
in Paragraph 3a), subject to the terms and conditions set forth below;
NOW, THEREFORE, for and in consideration of the covenants and promises contained
herein, the parties hereto agree as follows:
1. VOLUME COMMITMENT/TERM. The term (the "Term") of the Agreement commences
as of May 1, 1998, and ends on the later to occur of April 30, 2003, or
the aggregate purchase of *** of Product by the Fountain Account.
2. MARKETING PLAN. In response to the competitive offer, Dr Pepper commits to
a marketing plan requiring payment of monies for the Term as follows:
a. TRADE ALLOWANCE FUND. A *** per gallon allowance off invoice pricing
shall be provided on Product purchased by the Fountain Account during
the Term.
b. EQUIPMENT/SERVICE FUND. *** per gallon shall be paid *** to
offset the costs associated with equipment and service on the fountain
equipment dispensing the Product.
c. MARKETING FUND. *** per gallon shall be paid to the Fountain
Account. To qualify for this fund, the Fountain Account agrees to
perform a minimum of *** of the following activities annually:
Mutually agreeable *** ;
Annual crew incentive programs;
Placement of DR PEPPER identified point of purchase
materials;
Trademark co-op advertising that supports mutually agreeable
initiatives.
d. PAYMENT SCHEDULE. Funding for these 2 funds will be *** in each
year of years *** of the Agreement and reconciled each year in
accordance with actual volume purchases of the Product. For years
***, payment shall be made within *** at the end of each *** in
each of these agreement years based on actual gallons of Product
purchased by the Fountain Account.
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e. GALLONAGE REPORT. Volume for the purpose of making the payments
outlined herein shall be provided via Dr Pepper's authorized computer
report or approved distributor reports/recaps reflecting actual
gallonage of Product purchased by the Restaurants which the Fountain
Account shall provide to Dr Pepper for verification and payment
purposes. The parties agree that in any discrepancy in reported
gallonage purchases Dr Pepper and the Fountain Account shall make the
mutual determination of such actual gallonage purchases of Product.
To qualify for this marketing plan, the Fountain Account must purchase the
Product and execute those performance requirements as outlined in
Paragraphs 2 and 3. It is understood and agreed that for purposes of this
entire Agreement, the Product will not be considered to have been
"purchased" until it has been paid for in full and performance requirements
have been fulfilled by the Fountain Account. Accordingly, any marketing
support based on the purchase of the Product will be earned only to the
extent that the Fountain Account has paid for such Product and performance
requirements have been fulfilled by the Fountain Account. Since Dr Pepper
will provide reimbursement for expenses before the Fountain Account has
purchased sufficient gallonage to earn such sums, such payment will be
deemed an advance of funding which must be refunded in the event of early
termination or at the end of the Term if any portion of the advanced sum
remains unearned.
3. RESPONSIBILITIES OF THE FOUNTAIN ACCOUNT. In consideration of the payments
to be made to the Fountain Account by Dr Pepper pursuant to this Agreement,
the Fountain Account also agrees to:
a. Guarantee that the Product will be available in all present and future
Restaurants owned or operated by the Fountain Account (collectively
the "Restaurants") during the Term, with the exception of external
venues (i.e., arenas, schools) that have preexisting post-mix soft
drink contracts;
b. Guarantee that all of the Restaurants dispensing the Product will not
dispense at the same time competing pepper-flavored post-mix products
of the same or similar flavor as the Product during the Term (i.e.,
MR. PIBB, DR SLICE). The Fountain Account and Dr Pepper shall make
the mutual determination of whether the dispensing of other competing
post-mix products violates the terms and conditions of this Agreement.
The Fountain Account also agrees that the Product shall be the only
approved flavored post-mix product in the Restaurants for that flavor
category;
c. Identify the Product in all Restaurants during the entire Term,
including but not limited to brand identification on the menu boards
and dispensing fountain heads in all Restaurants;
d. Provide to Dr Pepper upon the execution of this Agreement a list of
all Restaurants in the Fountain Account's system as of the current
time. The Fountain Account shall promptly notify Dr Pepper of all new
Restaurants in the Fountain Account's system which are opened or
acquired, and any Restaurants which are sold or transferred or
otherwise disposed of during the Term.
4. TERMINATION AND REFUND OF PAYMENTS. This Agreement may only be terminated
by either party hereto for cause. "Cause" shall be deemed the material
breach of this Agreement by the defaulting party which shall have 60 days
to cure such default upon receipt of written notice from the nondefaulting
party that such a material breach has occurred. Both parties agree to meet
and work together in good faith to resolve and cure such default. In the
event the material breach has not been cured to the reasonable satisfaction
of the nondefaulting party hereto, then this Agreement shall be deemed
terminated immediately following said 60 day period.
a. In the event termination occurs prior to the end of years *** of this
Term, the Fountain Account shall (i) repay to Dr Pepper all of the
estimated amount paid to the Fountain Account pursuant to Paragraph 2d
which have not been earned by the Fountain Account based on actual gallons
of Product purchased as of the date of termination, and (ii) pay interest
on all sums due to Dr Pepper under this paragraph at the rate of
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*** per month, or such lesser percentage as required by law, accrued
since the effective date of the Term. Such amounts shall be paid by the
Fountain Account to Dr Pepper within 60 days of termination of this
Agreement; and
b. In the event termination occurs at any time during the agreement years ***
of the Term, Dr Pepper and the Fountain Account shall mutually determine
the actual gallons of Product purchased as of the date of termination
pursuant to Paragraph 2d, for which payment shall then be made to the
Fountain Account within 60 days after the termination thereof; provided
that the Fountain Account has fulfilled all of its performance requirements
hereunder. Dr Pepper reserves the right to withhold payment due hereunder
as an offset against amounts not paid by the Fountain Account for Product
delivered to the Fountain Account.
5. BOTTLE/CAN AVAILABILITY. If at any time during the Term the Fountain
Account decides to sell bottled/canned carbonated soft drinks in the
Restaurants, the Fountain Account will provide Dr Pepper an opportunity to
present the same bottle/can products which correspond to the Product for
sale in its Restaurants and will consider such products in good faith.
6. NEW RESTAURANTS. If at any time during the Term the Fountain Account opens
or acquires additional Restaurants where post-mix products are or will be
sold ("New Restaurants"), the Product will also be dispensed at such New
Restaurants under the same terms, obligations and marketing plan of this
Agreement.
7. ENTIRE AGREEMENT. This Agreement contains the entire agreement between the
parties with respect to the transactions contemplated herein and supersedes
all previous oral or written negotiations or commitments. No amendment or
modification of this Agreement may be made except in a writing executed by
the party against whom such amendment or modification is sought to be
enforced.
8. VENUE. This Agreement shall be construed, interpreted and enforced under
the laws of the State of Texas without regard to principles of conflict
or choice of laws. Any action or proceeding arising out of or in
connection with this Agreement shall be venued in a federal or state court
of appropriate subject matter jurisdiction located in San Diego,
California and the parties hereby consent to the personal jurisdiction in
such courts.
9. BINDING AGREEMENT. This Agreement shall be binding upon each of the
parties hereto and shall inure to their respective benefits and the benefit
of their successors, assigns and legal representatives, as the case may be.
This Agreement may not be assigned or transferred by either party hereto
without the prior written consent of the other party.
10. COSTS AND EXPENSES. Except as expressly otherwise provided in this
Agreement, each party hereto shall bear its own costs and expenses in
connection with this Agreement and the transactions contemplated hereby.
If any legal action is taken by either party hereunder to enforce the terms
and conditions of this Agreement in the event of a material breach, the
prevailing party may recover its attorneys' fees in connection with
enforcement of the Agreement.
11. FORCE MAJEURE. Either party is excused from performance hereunder if such
nonperformance results from any acts of God, strikes, lockout, labor
trouble or other industrial disturbance, war, riots, acts of
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governmental authorities, shortages of raw materials or any other cause
outside the reasonable control of the nonperforming party. In the event
either party wishes to invoke this provision, it must give prompt written
notice to the other party, specifying the basis for the assertion of the
same and for how long it is expected that such situation will continue.
Upon the cessation of such situation, the invoking party shall give written
notice of such fact to the other party and shall resume performance of all
obligations covered hereunder with respect to which compliance has been so
interrupted.
12. NONDISCLOSURE. Except as may otherwise be required by law or legal
process, the Fountain Account shall not disclose to any third party the
terms and conditions of this Agreement.
13. NOTICES. Any notices given or related to the Agreement shall be in writing
and hand-delivered or sent by prepaid, certified or express mail, return
receipt requested, and if to the Fountain Account, to 5151 Shoreham Place,
San Diego, CA 92122-5940, Attn: Jim Stryker-Chief Financial Officer, and if
to Dr Pepper, to 5301 Legacy Drive, Plano, Texas 75024, Attn: Senior Vice
President Fountain Foodservice, National Accounts.
14. INDEPENDENT CONTRACTORS. It is understood and agreed by the parties that
this Agreement does not create a fiduciary relationship between them; each
party's relationship to the other party is that of an independent
contractor. Nothing herein contained shall be construed to place the
parties in the relationship of partners or joint venturers or to make
either party the agent of the other and neither party shall have any power
to obligate or bind the other in any manner whatsoever.
15. WAIVER. Failure of either party to require performance of any provision of
this Agreement shall not affect either party's right to require full
performance of this Agreement at any time thereafter during the Term hereof
and the waiver by either party of any provision hereof shall not constitute
or be deemed a waiver of a similar breach in the future.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on behalf of
the Fountain Account and Dr Pepper as of the day and year first above written.
DR PEPPER/SEVEN UP, INC. RUBIO'S RESTAURANTS, INC.
By: /s/ illegible By: /s/ James W. Stryker
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Title: Senior VP Title: Vice Pres.
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