EXCLUSIVE BEVERAGE AGREEMENT
This Agreement is entered into, this I ~ day of December, 1998, by and among
Minnesota State Colleges and Universities on behalf of Minnesota State University,
Mankato (the "University"); Minnesota State University, Mankato Foundation, Inc., a
Minnesota non-profit corporation (the "Foundation"); and Pepsi-Cola of Mankato, Inc., a
Minnesota corporation, 1970 James Drive, North Mankato, Minnesota, 56003 (hereinafter
A. University's Main Campus (the "Campus") is located in Mankato, Minnesota.
As used herein, the term "Campus" consists of the geographic area indicated on EXHIBIT
1, which is attached hereto and made a part hereof by reference. Unless specifically
excepted herein, the parties hereto acknowledge and agree that the University has the
legal right to control beverage vending and/or service at all locations on the Campus.
B. Pepsi is in the business of manufacturing and/or distributing non-alcoholic .. carbonated and non-carbonated beverages in concentrated, mixed and packaged forms.
C. University has issued a Request for Proposal dated June 1, 1998, soliciting
requests for long-term beverage partnership proposals, the primary objective for which is
to improve the University's beverage services and net revenues by maximizing the
availability of products and develop creative strategies to benefit University and the
D. University has determined that the best and final offer by Pepsi was the most
advantageous to University.
E. University desires to grant to Pepsi the primary right to sell or otherwise
provide and promote its beverage products on the Campus, pursuant to the terms and
conditions contained in this Agreement.
For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and in further consideration of the mutual and dependent promises set forth
herein, the parties hereby agree as follows:
TERMS OF AGREEMENT
• 1 Definitions. As used in this Agreement, the following defined terms shall have the meaning specified below:
• 1.1 "Beverage Lines" means the soft drink products and new age products which are set out on EXHIBIT 2, which is attached hereto and made a part hereof by reference, plus any new products that may be added or carried by Pepsi, subsequent
to the date of this Agreement.
1.2 "Beverage Products" means the Postmix, Premix, and Packaged Products.
1.3 "Fountain Products means fountain beverage products produced from
Postmix or poured as Premix products, including both carbonated and non-carbonated
beverages. This shall include regular and diet soft drinks, juice products, teas, and
1.4 "Packaged Products" means any packaged beverage products produced or
distributed by Pepsi.
1.5 "Postmix Products" means undiluted concentrated beverage syrup distributed
by Pepsi for mixing and dispensing at the Campus.
1.6 "Premix Products" means bulk quantity beverages distributed by Pepsi for
dispensing in individual portions at the Campus.
• 2 Term and Effective Date of this Agreement. Except as specified immediately hereinafter, the term of this Agreement shall be for a period of ten (10) years, commencing on January 1, 2000 and terminating at midnight on December 31, 2009
(the "Term"). The effective date of this Agreement shall be January 1, 2000, with the
exception that the following payments or obligations shall be due prior to said date:
the first two contributions to the Taylor Center, the contribution to the Andreas
Theater, the Internship Program, Can Panels and Packaging Promotions, Vending
Promotions, Radio Advertising, Soft Drink Pricing, the providing of Fountain Products,
and the Exclusive Vending Agreement for Residence Halls (as set out at paragraph
4.3), the exact terms of which are described more specifically hereinafter.
3 Cash Donation, Incentive Rebates and Promotions.
3.1 Cash Donations. Pepsi agrees to pay Foundation (as specified hereinafter) the
following cash donations:
(a) To the foundation for construction of the Taylor Center, the
donations as set out on EXHIBIT 3, which is attached hereto and
made a part hereof by reference, in the total amount of Two Million
Two Hundred Fifty Thousand Dollars ($2,250,000.00).
(b) An unrestricted donation to the Foundation for the Andreas
Theater in the total amount of Twenty-Five Thousand Dollars
($25,000.00) to be made within thirty (30) days of the signing of
• (c) An unrestricted annual donation of Ten Thousand Dollars ($10,000.00) to the Foundation's Presidential Scholarships, and a Ten Thousand Dollar ($10,000.00) annual unrestricted donation to the
Foundation's Talent Grants. The first such payment due hereunder shall be
due on January 1, 2000, shall be in the amount of Ten Thousand Dollars
($10,000.00), and shall be divided equally between the Presidential
Scholarships and Talent Grants. The second such installment shall be due
on August 1, 2000, in the amount of Ten Thousand Dollars ($10,000.00) and
shall be divided equally between the Presidential Scholarships and Talent
Grants. Contributions in the same amounts and on the same dates will be
made on each of the remaining nine (9) years of the Term of this Agreement.
The Foundation shall have the sole authority and discretion to determine who
are the appropriate recipients of these respective scholarships and grants.
(d) Pepsi shall become a co-sponsor of the Cub Foods Maverick
Fever Promotion, and shall contribute to the Foundation, for the use of the
University's Athletic Department, the sum of Fifteen Thousand Dollars
($15,000.00) annually for said promotion. The first such payment shall be
due on October 1s" 2000, with nine (9) succeeding annual payments, also
in the amount of Fifteen Thousand Dollars ($15,000.00) each, to be made
on October 1s1 of each year thereafter during the Term of this Agreement.
In the event the Cub Foods Maverick Fever Promotion ceases to exist, these
annual contributions shall be made to the Foundation, for the use of a
University Athletic Program mutually agreeable to University and Pepsi.
(e) Pepsi shall become a sponsor of the University's Hall of Fame
Banquet, and shall make an annual unrestricted donation to the Foundation
for said Hall of Fame Banquet in the amount of Five Thousand Dollars
($5,000.00). The first such donation shall be due on September 1, 2000,
with succeeding annual payments, in a similar amount, to be made on
September 1sl of each year during the Term of this Agreement.
(f) Pepsi shall make annual unrestricted donations in the amount
of Five Thousand Dollars ($5,000.00) to the Foundation. The first such
annual contribution shall be made on December 1,2000, with succeeding
annual payments, in similar amounts, to be made on December 1sl of each
year during the Term of this Agreement.
(g) Pepsi shall make an annual unrestricted donation of One
Thousand Dollars ($1,000.00) to the Foundation, for the use of the
University's Department of Theater Arts. The first such annual contribution
shall be made on August 1, 2000, with succeeding annual payments in
similar amounts to be made on August 1sl of each year during the Term of
I • • --) ,J 110 l
• (h) Pepsi shall make an annual unrestricted contribution of One Thousand Dollars ($1,000.00) to the Foundation, for the use of the University's Department of Music. The first such annual contribution shall be
made on August 1, 2000, with succeeding payments in similar amounts to
be made on August 1st of each year during the Term of this Agreement.
3.2 Incentive Rebates. Pepsi agrees to pay to University an incentive rebate of
Three Dollars ($3.00) per case for each case sold above the annual base amount of
twenty-three thousand three hundred (23,300) cases of 20 ounce N.R. (non-returnable)
Packages. This payment applies only to 20 ounce N.R. Packages, and to no other
package. The first such payment shall be due by Pepsi to the University on April 15, 2001,
for the year January 1st through December 31 st , 2000. The same procedure shall be
followed each year thereafter during the Term of this Agreement. The parties hereto
acknowledge and agree that Pepsi is not guaranteeing a specific dollar amount to
University, but rather is agreeing to pay to University the amount specified above per case
for any cases sold over and above the annual base amount of twenty three thousand three
hundred (23,300) cases.
All athletic facility concessions, including, but not limited to, the Taylor Center,
Otto Arena, and Blakeslee Field, shall sell exclusively twenty (20) ounce PET (polyethylene
3.3 Promotions. Pepsi agrees to provide University with the following
promotions. The parties hereto acknowledge and agree that these promotions are not
actual cash distributions to the University by Pepsi, but rather take the form of Pepsi
providing, at its cost, promotion and marketing funds as specified hereinafter:
(a) Pepsi shall provide two (2) internships per year through the
University's College of Business. The actual job descriptions and the terms
of payment shall be determined on a mutually agreeable basis between" ",-, j'j'
Pepsi and the Dean of the College of Business, or a designee appointed by
the Dean of said College. Each intern will perform such duties as are
assigned by Pepsi, which duties shall include, but not be limited to, wor