Document:

Beverage Can Supply Letter Agreement, as amended 04/01/03.

 Exhibit 10.8 
 

 
  
 Portions hereof have been
omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment in accordance with Rule 406. 
  
  
 4805 Second
Street,                     Muscle Shoals, AL 35681-1282 
 phone /
688.817.8502                                 fax / 256-386-6047 
  
 CONFIDENTIAL 
  
 April 1, 2003 
  
 Mr. Robert G. Grenfell 
 Director, Aluminum
Purchasing 
 BALL CORPORATION 
 Packaging Operations 

9300 West 108th Circle 
 Broomfield, CO 80021-3682 
  
 Dear Bob: 
  
 We agreed to the following amendments to our supply contract during our meeting at your offices last week: 
  

	 	•	These amendments to our supply contract apply to calendar years 2004 through 2007. 

  

	 	•	Base product mix and volumes shall be: 

  

					
	 ·
	 	D&I Body Stock	 	***** Million Pounds per Year
	 ·
	 	Coated End Stock	 	***** Million Pounds per Year
	 ·
	 	Tab Stock	 	***** Million Pounds per Year
	 	 	TOTAL	 	***** Million Pounds per Year

  
 ***** 
  

	*****	Portions hereof have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406. 

	 	•	Conversion Prices are to be adjusted each April 1st by ***** of year-to-year changes in the PPI Index *****. 

  

	 	•	Additionally, you agreed to make formal introductions to Ball licensees in ***** and *****. We wish to work to establish supply positions with some of these prospective customers
starting in 2004. 

  
 ***** 
  
 Yours truly, 
  

	
	 /s/ Don Farrington

	Don A. Farrington
	Vice President Sales & Marketing

  

			
	Copy:	 	John Cameron
	 	 	Sam Glasscock
	 	 	John Martin - BALL

  

 -2- 

 

 
  
 CHICAGO SALES OFFICE 
  
 1117 S. MILWAUKEE AVENUE Suite D-3 
  
 LIBERTYVILLE IL 60048 
  
 phone / 988.817.8602 fax / 847.816.8281 
  
 CONFIDENTIAL 
  
 July 6, 2001 
  
 Mr. Robert C, Greenfell 
 BALL CORPORATION 
 300 WEST 108th Circle 
 Broomfield, CO 80021-3682 
  
 Dear Bob:

  
 This letter confirms our agreement last week to adjust the annual aluminum
volumes in our contract for 2001 as follows: 
  

			
	 D&l Can Body Stock
	  	***** million pounds
	 Coated Can End Stock
	  	***** million pounds
	 Can Tab Stock
	  	***** million pounds
	 	  	

	 TOTAL
	  	***** million pounds

  
 According to my records our current
position relative to these volumes is shown below: 
  

											
	 Product

	  	Net Shipments
Thru 8/30/01

	  	 July
 Bookings

	  	 August
 Bookings

	  	 2001 Balance
 To Ship

	  	Average Month
Sept. - Dec.

	 D&l Body Stock
	  	*****	  	*****	  	*****	  	*****	  	*****
	 Coated End Stock
	  	*****	  	*****	  	*****	  	*****	  	*****
	 Tab Stock
	  	*****	  	*****	  	*****	  	*****	  	*****
	 	  	
	  	
	  	
	  	
	  	

	 TOTAL
	  	*****	  	*****	  	*****	  	*****	  	*****

  
 millions of pounds

  
 We recognize the hazards in the perspective of “average months,” and
we recognize you will likely require some month-to-month flexibility in your orders. Please work directly with Regan Ragland to redefine the requirement earn the volume rebate for level loading based upon these revised annual volumes. 
  
 We sincerely enjoy working with you in the best interest of our partnership. Thank you for
your support and for business. 
  

	
	Yours truly,
	
	 /s/ Don A. Farrington

	 Don A. Farrington

	 Vice President Sales & Marketing

  

			
	 Copy:
	 	John Martin - Ball POC
	 	 	John Cameron
	 	 	Sam Glasscock
	 	 	Martha Neese
	 	 	Regan Ragland
	 	 	Eva Witte

  

 

 
  
 4805 SECOND
STREET, MUSCLE SHOALS, AL 35661-1282 
  
 phone /
256.386.6000 
  
 November 20, 2000 
  
 Mr. John Martin 
 Vice President, Purchasing 
 Packaging Operations 
 Ball Metal Beverage Container Corp. 
 9300 West 108th Circle 
 Broomfield, Colorado 80021-3682 
  
 Dear John: 
  
 As promised, we are pleased to offer the following amendment to our Supply Program Agreement dated August 10, 1998, as previously amended
(collectively, the “Supply Contract”) for your consideration: 
  

									
	 Rigid Container Sheet Product

	  	Quantity (Annual)

	  	 Price (in ¢ per lb.)

	 	  	2001

	  	2002

	  	2003

	  	 
	 D&l for Body Stock
	  	***** million
lbs.	  	***** million
lbs.	  	***** million
lbs.	  	*****
	 End Stock
	  	***** million
lbs	  	***** million
lbs.	  	***** million
lbs.	  	*****
	 Tab Stock
	  	***** million
lbs.	  	***** million
lbs.	  	***** million
lbs.	  	*****
	 Grand Totals
	  	***** million
lbs.	  	***** million
lbs.	  	***** million
lbs.	  	 

  
 The price(s) noted
above will be increased by *****% of the difference between the price list $***** in effect in 1997 less the adjustment made for the PPI and the July 2000 price list. 
  

 - 2 - 

	15.	Wise aggress that ***** million pounds of the cansheet to be provided by Wise to Ball during 2001 will be sold at an underlying P1020 price of $***** per pound and will be delivered
in accordance with the following monthly schedule (all amounts are in millions of pounds): 

  

																	
	 Jan.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 Feb.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 Mar.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 Apr.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 May
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 June
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 July
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 Aug.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 Sept.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 Nov.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 
	 Dec.
	  	*****	  	 	  	 	  	 	  	 	  	 	  	 	  	 

  
  
 Ball will not remit on the basis of $***** per pound and will remit an additional $***** per pound in respect of each of the pounds referred to in the
column above for January, February, March and April. This additional $***** per pound shall constitute an advance payment in respect of the ***** million pounds of cansheet referred to in Section 1(a)(ii) of the Metal Supply Contract Amendment,
Assignment and Assumption Agreement and Administrative Services Agreement dated as of September 1, 2000, and Ball shall withhold $***** per pound (i.e. $***** per week commencing April 15, 2001 and terminating December 31, 2001) from payments due in
respect of the said ***** million pounds until such withholdings aggregate an amount equal to the total amount of the advance payments (i.e. $*****). In the event that, after March 31, 2001, Wise fails to deliver any of the remainder of the said
***** million pounds of cansheet in accordance with an underlying P1020 price of $***** per pound, the full amount of the difference between $***** and Ball’s total withholdings at the time of such failure shall be immediately due and payable
by Wise to Ball. Ball shall be entitled to offset any such amount which may become owing to Ball by Wise against any amounts owing by Ball to Wise or any affiliate of Wise, whether under the Supply Contract or otherwise. 
  

 - 3 - 

 We appreciate the opportunity to present our proposal to you and look forward to many mutually beneficial years of
business between our respective organizations. If the foregoing is acceptable, please sign where indicated below and return a copy to me. Thank you for your consideration. 
  

					
	 Sincerely,
	 	 	 	 Accepted by,

			
	 /s/ John J. Cameron
	 	 	 	 /s/ John Martin

	 John J. Cameron
	 	 	 	 John Martin

	 President
	 	 	 	 Vice President, Purchasing

	 Wise Alloys LLC
	 	 	 	 Packaging Operations

	 	 	 	 	 Ball Metal Beverage Container Corp.

  

 - 4 - 

 *****STRICTLY CONFIDENTIAL***** 
  
 BALL AND REYNOLDS SUPPLY PROGRAM AGREEMENT 
  
 Ball Metal Beverage Container Corp., including its subsidiaries and affiliates (“Ball”), and Reynolds Metals
Company (“Reynolds”) shall treat any information relating to this Supply Program as confidential and each party shall use the same degree of care regarding the use and disclosure of such information to third parties as it would for its own
information. Neither party shall disclose the terms of this Agreement or the extent of the parties’ relationship without the prior written consent of the other party or unless required to do so; provided, that Reynolds and Ball may provide a
copy of this Agreement to a potential assignee subject to execution of an appropriate confidentiality agreement. 
  

	1.	Term of Agreement - From date of closing of the sale of the Reynolds’ Business, as defined in the Asset Purchase Agreement dated April 22, 1998, to Ball (hereinafter referred
to as the “Sale”) through the end of the 30th month following the date of the Sale, provided the term shall not extend beyond December 31, 2000, subject to the provisions of Section 15. 

  

	2.	During the term of this Agreement, Ball shall purchase from Reynolds and Reynolds shall supply to Ball one hundred percent (100%) of Ball’s Reynolds Plant Requirements (as
hereinafter defined) for aluminum body stock, end stock and tab stock (collectively hereinafter referred to as “Can Stock”). “Reynolds Plant Requirements” means the total quantity of Can Stock purchased by Ball in the production
of aluminum cans and ends during the relevant period in its United States can and end manufacturing plants (including the can manufacturing plants located in Hawaii and Puerto Rico) that Ball purchased from Reynolds pursuant to the Sale
(collectively hereinafter referred to as “Can Plants”), less any quantities of Can Stock that were under contract between Reynolds and any other unrelated party at the time of Sale, which contractual obligations were assumed by Ball;
provided, however, Ball shall have the option to have manufacturers other than Reynolds supply aluminum body stock to the can manufacturing plants located in Hawaii and Puerto Rico, and, if Ball exercises such option, Ball shall purchase from
Reynolds the annual requirements for aluminum body stock for such plants, currently, ***** million pounds each, for use at Ball’s other North American can manufacturing plants. Aluminum body stock, aluminum end stock and aluminum tab stock
supplied hereunder shall comply with Reynolds’ standards and specifications set forth in Exhibit 1, 2, and 3, respectively (hereinafter “Body Stock”, “End Stock” and “Tab Stock”). The Body Stock component, or the
End Stock and Tab Stock components, of Reynolds Plant Requirements may be decreased, at Ball’s option, during a year and for any year thereafter due to the closure, sale or curtailment of any of the Can Plants, as the case may be, by the amount
no longer required by or for such Can Plants after the date of Sale only if, and to the same proportionate extent as, Ball’s total can or end production in North America for such year (hereinafter “North American Requirements”), as
the case may be, has decreased from the level of such production as of the date of Sale. For example, as of the date of sale, if Ball’s purchases of Can Stock for its North American Requirements and the Reynolds Plant Requirements are 1 billion
pounds and 480 million pounds, respectively, and, on January 1, 1999, Ball curtails can and end production at the Reidsville, North Carolina plant, thereby reducing such plant’s annual requirements for Can Stock by 20 million pounds, the amount
of such Can Stock reduction that Ball would still be obligated to purchase annually from Reynolds for use at its other facilities (hereinafter “Ball’s Obligation to Reynolds”) would be calculated as follows: 480 million pounds/I
billion pounds X 20 million pounds = 9.6 million pounds pro rata reduction. Thus, 20 million pounds - 9.6 million pounds = Ball’s Obligation to Reynolds or 10.4 million pounds. Attached hereto as Exhibit 4 is a list which sets forth Ball’s
approximate North American annual Can Stock usages purchased by Ball for each plant as of the date hereof. Subject to the fourth sentence of this paragraph, the North American Requirements shall not include increases in the Can Stock used by the
Ball system through the inclusion of any can or end manufacturing plant built or acquired, either directly or indirectly, by Ball after the commencement date of this Agreement. 

  

	3.	Based upon Reynolds disclosures before the Sale, the parties currently expect that Ball will purchase from Reynolds at least the minimum annual volume of Can Stock (***** million
pounds) during each of years 1998 through 2000 and substantially in the approximate product mixes set forth below (annual volume and product mixes to be prorated for 1998): 

  

 - 5 - 

 APPROXIMATE PRODUCT MIXES 
  

			
	 	 	 (in millions of pounds)

	Body Stock	 	*****
	End Stock	 	*****
	Tab Stock	 	*****
	Total	 	*****

  
 (a)
The aforesaid minimum annual volume and relative product mixes are based on Ball’s good faith estimate of its future requirements at the time it executes this Agreement***** 
  
 (b) During each calendar year during the term of this Agreement (to be prorated for 1998), Ball shall sell
to Reynolds and Reynolds shall purchase from Ball, at market prices, an aggregate quantity of P1020 ingot, shreds and class scrap equal to ***** of the quantity (in pounds) of Can Stock purchased by Ball hereunder in each such calendar year. *****
UBC’s may be tolled by Reynolds at the conversion prices stated in this Agreement (plus an appropriate charge for converting the UBC’s into sheet ingot) for Can Stock volume in addition to the volume of Can Stock to be supplied by Reynolds
under this Agreement. 
  
 (c) Reynolds shall
permit Ball’s can and end customers to purchase Can Stock directly from Reynolds under this Agreement for subsequent tolling into cans and ends by Ball. 
  

***** 
  

	5.	The price of the Can Stock to be supplied hereunder shall be the sum of the aluminum metal component and the conversion fee for the product in question. 

  
 (a) Aluminum Metal Component. 
  
 (1) During the term of this Agreement, the aluminum metal
component shall be established on a semi-annual basis. The price of this component shall be the average daily U.S. Transaction price for high grade aluminum as reported in Platt’s Metals Week for the six (6) months prior to the date of price
setting with a one month lag period *****, as set forth in the following table; provided, however, that during the period beginning October 1, 1998 through March 31, 1999 (hereinafter referred to as the “No Floor Period”), the aluminum
metal component for the first ***** million pounds shall not exceed $***** per pound and have no floor, and during the remaining term of this Agreement and for any amount in excess of ***** million pounds during the No Floor Period, the aluminum
metal component shall not exceed $***** per pound nor fall below $***** per pound; provided, further, that beginning April 1, 1999 and on each April 1 thereafter during the term of this Agreement, such maximum and minimum levels shall be subject to
an adjustment 

  

 - 6 - 

 
(upward or downward, as applicable) based upon one-half (1/2) of the year over year change in the PPI. Examples of annual adjustment calculations are shown
in Attachment A hereto. 
  

					
	 Purchase Period:

	 	 Reference Period:

	 	 Price Setting Date:

	 Q2/Q3, 1998
	 	9/1997 - 2/1998	 	April 1, 1998
	 Q4, 1998/Q1, 1999
	 	3/1998 - 8/1998	 	October 1, 1998
	 Q2/Q3, 1999
	 	9/1998 - 2/1999	 	April 1, 1999
	 Q4, 1999/Q1, 2000
	 	3/1999 - 8/1999	 	October 1, 1999
	 Q2/Q3, 2000
	 	9/1999 - 2/2000	 	April 1, 2000
	 Q4, 2000
	 	3/2000 - 8/2000	 	October 1, 2000
	 Qi, 2001
	 	3/2000 - 8/2000	 	October 1, 2000 (if extended)

  
 (2)
Ball acquires no right, title or interest in any aluminum metal contract which Reynolds may enter into, on the London Metal Exchange or otherwise, in connection with this Agreement. 
  
 (b) Conversion Fee. 
  
 Subject to the provisions of Section 7, during the term of this Agreement, the conversion fee for each
product shall be at Reynolds’ 1997 published conversion fee for such product as stated in the attached Exhibit 5 (with discounts, if applicable, as set forth in Section 5(c)), as adjusted ***** forth in Attachment A hereto. 
  
 (c) Subject to Section 5(b), conversion fee pricing for the
products to be provided hereunder shall be at either *****: 
  
 Soft Drink End Stock: *****; Beer End Stock: *****; and Tab Stock: *****. 
  
 ***** 
  

	6.	Payment terms shall be as set forth in Section 11(c). 

  

	7.	(a) In the event Reynolds’ orders for shipments of Body Stock, End Stock and Tab Stock (including orders received from Ball) exceed in the aggregate ***** million pounds
(hereinafter “Threshold Amount”) in any calendar year hereunder and subsequent orders for shipments of Body Stock, End Stock or Tab Stock in that calendar year are priced at conversion fees which are lower than the conversion fees stated
in Section 5(b) of this Agreement, Reynolds agrees to extend to Ball such lower conversion fees for a like volume. For example, if by September 1, 1999, Reynolds’ orders for shipments of Body Stock, End Stock and Tab Stock for calendar year
1999 exceed the Threshold Amount, and Reynolds subsequently contracts to ship another customer ***** million pounds of Body Stock for delivery in the fourth calendar quarter, 1999, at a conversion fee which is lower than the conversion fee stated in
Section 5(b), Reynolds would be obligated to offer such lower conversion fee to Ball for ***** million pounds of the quantity of Body Stock purchased from Reynolds by Ball in 1999. Orders are to be taken into account for purposes of this clause in
the order in which they are booked. 

  
 ***** 
  

 - 7 - 

 ***** 
  

	9.	Delivery or receipt of the Can Stock which is delayed or prevented by “force majeure” affecting either Reynolds or Ball shall not impose liability on either party.
“Force majeure” is any event beyond the reasonable control of the affected party such as, but not limited to, acts of God, wars, civil commotion, governmental action, fire, storm, flood, earthquake, explosion, strikes, lockouts, or other
industrial disturbance, acts, regulations or other requirements of the federal, state, territorial or local governments, including without limitation, acts, regulations or other requirements making it unlawful or commercially impracticable to
package beverages in metal cans, or any cause, whether of the same or different nature, beyond the reasonable control of the party affected. The party affected by any such event of force majeure shall promptly advise the other of the extent and
probable duration and coordinate efforts to minimize the impact of force majeure on both parties. 

  

 - 8 - 

 The parties recognize that Ball must have Can Stock to continue to operate the Reynolds Can Plants in the
event Reynolds is prevented by force majeure events from delivering Can Stock to Ball. Therefore, Reynolds and Ball agree that in the event Reynolds does not make deliveries of Can Stock to Ball by reason of force majeure events, Ball shall be
entitled to purchase Can Stock from others in amounts which Ball believes in good faith is needed to minimize or avoid disruption of production and sales of cans and ends. Ball’s purchases of Can Stock from others as a result of force majeure
events shall not constitute a breach of this Agreement by Ball, and Ball shall be released from its obligation to purchase such quantities from Reynolds under this Agreement. 
  

	10.	Reynolds warrants that the Can Stock supplied hereunder will conform to the applicable specifications, that it will convey good title thereto, that such Can Stock will be delivered
free from any lawful security interest or any other lien or encumbrance and will be free from claims of infringement or the like, will not render the beverages within the containers made from the Can Stock unfit for human consumption or render the
beverages within the containers made from the Can Stock misbranded or adulterated under the Food, Drug and Cosmetic Act, as amended, or any similar state, territorial or local law, or change or impair the flavor, taste or odor of the beverages
contained within the containers made from the Can Stock; provided, however, this warranty shall not apply to off-taste claims caused by Ball’s failure to apply properly an interior coating to the cans and ends. In the event the Can Stock does
not conform to the applicable specifications or is not merchantable or fit for its intended use, Ball shall promptly notify Reynolds of such non-conformance, followed by appropriate documentation. Reynolds shall then promptly investigate the claim
and replace any non-conforming material or refund the full purchase price for such material less a reasonable scrap allowance, if applicable. REYNOLDS MAKES NO WARRANTY, EXPRESS OR IMPLIED, EXCEPT SUCH AS IS EXPRESSLY SET FORTH HEREIN. In no
event, however, shall Reynolds be liable for lost profits incurred by Ball as a result of any non-conforming Can Stock supplied in breach of the warranties stated in this Section 10. Provided, however, nothing contained in this Agreement shall limit
or otherwise affect any of the rights or remedies available to Ball pursuant to Section 11(f). 

  
 ***** 
  

 - 9 - 

 ***** 
  

	12.	[INTENTIONALLY OMITTED] 

  

	13.	Upon execution, this Agreement shall constitute our entire agreement with respect to the subject matter hereof and will, as of the date of Sale, supersede and cancel any prior
agreements between us with respect thereto, including the Supply Program Agreement signed by Ball on September 12, 1995, as amended on October 9, 1995 and January 2, 1997, except for product warranty claims by Ball in respect of Body Stock, End
Stock and Tab Stock delivered under the Supply Program Agreement dated September 12, 1995, as amended. 

  

	14.	This Agreement is not assignable, nor may any of a party’s rights or obligations be transferred or delegated, in whole or in part, without the prior written consent of the
other party, which consent shall not be unreasonably withheld. 

  

	15.	Ball shall have the option to extend the term of this Agreement for an additional three (3) months beyond the term specified in Section 1. Ball shall exercise its option to extend
the term of this Agreement by an additional three (3) months by providing written notice to Reynolds no later than September 1, 1999. If Ball exercises its option, this Agreement shall be extended for an additional three (3) month period.

  

	16.	Amendment and Modification. This Agreement may be amended, modified and supplemented only by written agreement of Ball and Reynolds. 

  

	17.	Waiver of Compliance. Any failure of Reynolds; on the one hand, or Ball; on the other, to comply with any obligation, covenant, agreement or condition herein may be expressly waived
in writing by an authorized representative of Ball or Reynolds, respectively, but such waiver or failure to insist upon compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to,
any subsequent or other failure. 

  

	18.	Default. If either party fails to perform under any material provision of this Agreement, and the failure is not corrected within thirty (30) days after the other party gives
written notice thereof, then the other party may decline to make or accept, as the case may be, further deliveries until the default is corrected. 

  

	19.	Notices. All notices, requests, demands and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand
or sent by overnight courier or telecopy (and promptly confirmed by certified mail, return receipt requested): 

  
 (a) if to Reynolds, to: 
  
 Reynolds Metals Company 
 6601 West Broad Street 
 Richmond, Virginia 23230 
 Attention: Corporate Secretary’s Office 
 Telecopier: (804) 281-3740 
  
 or to such other person or address as Reynolds shall furnish to Ball in writing. 
  

 - 10 - 

 (b) if to Ball, to: 
  
 Ball Metal Beverage Container Corp. 
 10 Long Peaks Drive 
 Broomfield, Colorado 80021-2510 
 Attention: General Counsel 
 Telecopier: (303) 460 -2691 
  
 or to such other person or address as Ball shall furnish to Reynolds in writing. 
  

	20.	Governing Law. This Agreement and the legal relations among the parties shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to
its conflicts of law doctrine. 

  

	21.	Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one
and the same instrument. 

  

	22.	Headings. The headings of the Sections of this Agreement are inserted for convenience only and shall not constitute a part hereof or affect in any way the meaning or interpretation
of this Agreement. 

  

	23.	Third Parties. Except as specifically referred to herein, nothing herein shall be construed to give to any person other than the parties and their successors or assigns, any rights
or remedies under or by reason of this Agreement. 

  

	24.	Taxes. In addition to the price, the amount of any present or future tax applicable to the sale, delivery, use, and/or other handling of the Can Stock shall be paid by Ball.

  

	25.	Severability. If any provision of this Agreement, whether a section, paragraph, sentence or any portion thereof, is determined to be null and void or unenforceable, the remaining
provisions of this Agreement shall remain in full force and effect. 

  

	26.	Interpretation. When used in this Agreement, the singular form shall include the plural and vice versa, and the use of any gender shall include all genders, as appropriate. The
terms “herein”, “hereinbefore”, “hereinafter”, “hereunder”, and “hereof’ shall refer to the entirety of this Agreement and shall not be limited in applicability to the section in which they appear.

  

	27.	Precedence. In the event of any conflict or inconsistency between the provisions in this Agreement and the provisions in Exhibits 1-5 and Attachment A to this Agreement, the
provisions in this Agreement shall prevail. 

  

 - 11 - 

	28.	The Dispute Resolution procedures under the Asset Purchase Agreement shall not be applicable to this Agreement. 

  
 Please indicate your agreement hereto and acceptance hereof by executing and
returning the duplicate thereof. 
  

			
	REYNOLDS METALS COMPANY
		
	By	 	 /s/ D. Michael Jones

	 Its
	 	 Senior Vice President and General Counsel

	 Date
	 	 8/10/98

  

			
	AGREED AND ACCEPTED:
	
	BALL METAL BEVERAGE CONTAINER CORP.
		
	By	 	 /s/ F. Midgett

	 Its
	 	 President

	 Date
	 	 8/10/98

  

 - 12 - 

 ATTACHMENT A 
  
  
 Examples of Annual PPI Adjustments 

 
  
 ***** 
  
  

	*****	Portions hereof (1 page) have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406.

 EXHIBIT 1 
  

Reynolds Metals Company 
 Can Division

 Direct Material Specification - D&I Can Body Stock 
  
  
 ***** 
  
  

	*****	Portions hereof (7 pages) have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406.

  

 EXHIBIT 2 
  

Reynolds Metals Company 
 Can Division

 Direct Material Specification - End Stock 
  
  
 ***** 
  
  

	*****	Portions hereof (13 pages) have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406.

  

 EXHIBIT 3 
  

Reynolds Metals Company 
 Can Division

 Direct Material Specification - Tab Stock 
  
  
 ***** 
  
  

	*****	Portions hereof (18 pages) have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406.

  

 EXHIBIT 5 
  

Reynolds’ Current Price List 
 for Can
and Sheet Products 
  
  
 ***** 
  
  

	*****	Portions hereof (15 pages) have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406.Beverage Can Supply Letter Agreement, as amended 04/22/04.

 Exhibit 10.9 
  
 Portions hereof have been omitted and filed separately with Securities and Exchange Commission pursuant to a request for confidential treatment in
accordance with Rule 406. 
  

					
	

	 	 WISE
 ALLOYS
	  	 
	 	 	 	  	CONFIDENTIAL

  

			
		
	 DATE:
	  	April 22, 2004
		
	 TO:
	  	RICH NUNN, ED VESEY - CROWN CORK & SEAL USA, Inc.
		
	 COPY:
	  	Danny Mendelson, Sam Glasscock
		
	 FROM:
	  	Don Farrington
		
	 SUBJECT:
	  	SUPPLY AGREEMENT 2004-2008
	 	  	BEVERAGE NORTH AMERICA

  
 This document is an outline summary of
the key elements in the Supply Agreement between Wise Alloys, LLC (“WISE”) and Crown Cork & Seal USA, Inc. (“Crown”) - Beverage North America for calendar years 2004 through 2008. 
  
 FORECAST ANNUAL PRODUCT VOLUMES (millions of pounds) 
  
 BEVERAGE North America 
  

											
	 	  	2004

	  	2005

	  	2006

	  	2007

	  	2008

	 D & I Body Stock
	  	***	  	***	  	***	  	***	  	***
	 Wide Coated End Stock
	  	***	  	***	  	***	  	***	  	***
	 Tab Stock
	  	***	  	***	  	***	  	***	  	***
	 	  	
	  	
	  	
	  	
	  	

	 TOTAL
	  	***	  	***	  	***	  	***	  	***

  
 TOTAL VOLUME TARGET *** million
pounds 
  
 Wise Alloys acknowledges that the Forecast
Annual Product Volumes described above may fluctuate based on gain or loss of business, or adjustments in hard or soft toll volumes. Wise agrees that the volumes above will be subject to adjustment up or down commensurate with the change in
Crown’s direct purchase volume by product type and the Wise Alloys percentage of that business. Further, Crown has advised Wise that this adjustment methodology is consistent with all of Crown’s direct purchase suppliers. 

	***	Portions hereof have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406. 

  

 Wise Alloys reserves the right to verify any such volume adjustments through the external auditors of
Crown. 
  
 Crown agrees that volume shortfalls to these target
levels in any contract year due to an adjustment as described above, can be sold elsewhere at the discretion of Wise Alloys. 
  
 TERM OF AGREEMENT 5 years 
  
 CLASS SCRAP TOLL 
  
 The price charged by Wise to Crown for the conversion of Class Scrap into rolled can sheet will be determined by subtracting the following adjustments from the 6-month trailing average price of ingot (referenced
below) on a delivered basis. As a standard practice, Wise arranges and pays for freight for shipment of Class Scrap to Wise. Wise then deducts $*** per pound from Crown’s monthly scrap credit. Wise agrees to provide this credit by the *** of
the month following scrap receipt from Crown. 
  

			
	 Class I
	  	$*** per pound
	 Class II
	  	$*** per pound
	 Class III
	  	$*** per pound

  
 The minimum amount of Class Scrap to
be tolled by Crown through Wise is to be ***% of average shipments of can sheet from Wise to Crown. 
  
 Wise agrees, ***** to toll up to ***% of Crown’s monthly purchases of can sheet from Wise in the form of Used Beverage Containers (“UBC’s”) at current month average LME, less $*** per pound.
UBC’s will be FOB Listerhill, Alabama and conform to Wise published specifications. 
  
 ***** 
  

 2 

 CONVERSION PRICES 
  
 Conversion prices are Alcoa List Conversion Prices Published effective April 1, 1997, adjusted for changes in the Producer Price Index (PPI) since that date as described
below. These conversion prices are effective April 1, 2004. 
  

					
	 BEVERAGE - North America
	  	(Examples attached)	  	 
			
	 D & I Body Stock
	  	******************	  	 
	 Beverage End Stock
	  	******************	  	 
	 SuperEnd® Stock
	  	******************	  	 
	 Beverage Tab Stock
	  	******************	  	 

  

	Note:  	SuperEnd® is defined as Coated Beverage End Stock in thicknesses of *** inch or less. 

  
 All prices are FOB Crown plant. Title and risk of loss passes on consumption for Vendor Managed Inventory (“VMI”) coils (as
referenced below) and on delivery to Crown plants on non-VMI coils. 
  

 3 

 ***** 
  
 CONVERSION PRICE ADJUSTMENTS 
  
 Conversion prices for North America will be adjusted *** of each year, beginning ***, 2004 by ***% of the year-to-year change in the ***************, not seasonally
adjusted. 
  
 Wise Alloys agrees that in the event that this Producer Price Index
fee change is not charged and collected by Wise from all North American buyers and/or consumers of can stock, that Crown will be exempt from payment as well. 
  
 NORTH AMERICA METAL PRICES 
  
 Unless otherwise agreed to, metal will be priced based on the standard aluminum can industry 6-month trailing average with a ceiling price of $*** per pound. Further, in
the event the can and can sheet industries adopt a different pricing methodology for direct purchased can sheet, Crown agrees to notify WISE of such change and work with WISE to transition to the new methodology. Further, Wise warrants that it will
take the appropriate actions to guarantee that it will be able to provide the 6-month trailing average and ceiling price. Further, if Wise fails to take these steps, Wise agrees that Crown will be in no way responsible for any additional costs
resulting from said failure. 
  
 Below are *** *** metal commitments for orders to
Crown plants to which we previously agreed: 
  

			
		
	 Guadalajara -
	  	******************
		
	 Puerto Rico -
	  	****************** 
		
	 	  	******************
		
	 	  	****************** 

  

 4 

 Wise and Crown agree that the above ingot prices will be reconciled to actual payments on a monthly basis. 
  
 VENDOR MANAGED INVENTORIES 
  
 Wise Alloys will provide Crown with Vendor Managed Inventories (VMI) at qualifying plant
locations. Plant locations are considered qualified when the plant or a production line within a plant is dedicated to consume Wise supplied can stock. Exceptions are subject to review. 
  
 ***** 
  
 QUALITY AND PERFORMANCE: 
  
 WISE guarantees that products supplied under this agreement will meet Crown’s specifications, as accepted by WISE (the “Specifications”). Quality claims
will be handled in the usual manner. WISE’s performance at Crown plants will be governed by Crown’s Qualification and Disqualification Procedures as attached. Should Crown disqualify WISE at a Plant, then the parties agree to work toward
re-qualification in a reasonable time and to alter the supply pattern where possible to other plants in the interim. In the event that WISE is unable to re-qualify in a reasonable time through no fault of Crown and conditions prevent or delay
altering shipment patterns, Crown, at its option, may consider the affected volume as counting towards satisfaction of the total volume commitment. 
  
 Crown’s Qualification and Disqualification Procedures are attached as Exhibits A and B respectively. Crown’s current specifications are attached as Exhibit C.

  
 SPECIFICATION CHANGES 
  
 If, at any time during the Term, Crown and WISE are unable to agree upon a change or an
addition to the Specifications (defined below) and Crown can purchase a product meeting any revised specifications from one or more third parties, Crown shall notify WISE in writing and, subject to any confidentiality agreement with such third
party, provide WISE with written documentation supporting the terms at which Crown can purchase the product meeting the revised specifications from a third party to the extent necessary for WISE to meet said terms. WISE shall have the opportunity to
meet the revised specifications on substantially the same terms as the third party. If WISE fails to do so within *** days from the notification date, Crown shall have the right to purchase a product meeting the revised specifications from the
offering third parties and the volumes so purchased shall count toward satisfaction of Crown’s Total Volume Target. 
  
 ***** 
  

 5 

 ***** 
  
 PAYMENT AND INVOICE TERMS 
  
 Crown will pay Wise on the *** and *** of each month for product delivered in the first and second halves of the previous months receipts respectively, in accordance with
previously accepted procedures. 
  
 Wise agrees to revisit these payment terms in
January of each year to determine if they can be extended based on improvements in Wise’s financial condition. 
  
 Payments will be generated using Crown’s Evaluated Receipts Settlement, unless otherwise notified by Crown, in accordance with electronic data interchange standards
provided by Crown from time to time to WISE (the “EDI Standards”). On the date of this Agreement, the EDI Standards include, without limitation, standards for ANSI x.12 advance shipment notice, purchase order, order status, Release,
receipt advice, inventory advice, stock transfer notification and payment notification. If Crown notifies WISE of a change in the EDI Standards, WISE will have *** days to comply with such change. Crown will not process any payment requests until
such requests comply with the EDI Standards. Without limiting the requirements of the EDI Standards, WISE acknowledges that the EDI Standards prohibit use of the same bill of lading number for two different shipments or the use of the same number on
two different Product coils. All submissions under the EDI Standards by WISE shall accurately reflect all required data free of accounting errors. WISE shall reimburse Crown for all additional direct costs associated with WISE’s failure to
provide complete and error free shipment information. WISE shall not bill Crown for any costs, either for goods or services, not agreed to herein without prior written approval. Electronic payments from Crown to WISE shall be governed by the terms
of Exhibit D. 
  
 ORDERS AND TIMING 
  
 Crown shall instruct WISE to ship Products by means of Product releases
(“Releases”) delivered to WISE. WISE shall deliver all Products so released by Crown within the time periods set forth in the relevant Release. TIME OF DELIVERY IS OF THE ESSENCE IN THIS AGREEMENT. 
  

 6 

 WISE INDEMNITY 
  
 WISE shall indemnify, defend and hold Crown and its successors, assigns, employees, customers and affiliates harmless from and against any and all liabilities, losses,
costs, damages, injuries, claims, suits, judgments, causes of action and expenses (including reasonable attorneys’ fees) suffered or incurred as a result of the actual or alleged: negligence of WISE or its suppliers; violation of any law by
WISE or its suppliers; infringement by WISE or its suppliers of any of patent, trademark, copyright or other intellectual property rights; or any breach of any other covenant, representation or warranty of WISE to Crown contained in this Agreement
or implied in law. In the event of a claim under this section, at its sole option, Crown may terminate this Agreement or defer acceptance of any Products specified in any outstanding Release until the claim is resolved. If Crown is enjoined from the
use or sale of the Products, at Crown’s option, WISE will either procure for Crown the right to continue using or selling the Products, replace the Products with substantially equivalent goods, modify the Products so as to be usable or sellable
by Crown or repurchase the Products at the price set forth in this Agreement. 
  
 TECHNICAL SUPPORT 
  
 WISE shall provide Crown with a reasonable
level of technical support at no cost to Crown. 
  
 FORCE MAJEURE

  
 Continued performance of any obligation hereunder, except payment for
Aluminum delivered, may be suspended immediately to the extent caused or contributed to by acts of God, fire, labor or trade disturbance, war, acts of terrorism, civil commotion, or act of the public enemy, compliance in good faith with any
applicable foreign or domestic government regulation or order, whether or not said order later proves to be invalid, or any cause beyond the reasonable control of any party, whether similar or dissimilar to the enumeration contained herein, The
party claiming suspension shall give proper notice and shall use its best efforts to promptly cure the cause of such suspension. Upon cessation of the cause for suspension, continued performance shall commence as soon as reasonably practicable, and
the term of this Agreement shall be extended by the amount of time that performance was suspended due to Force Majeure. While a Force Majeure event affecting WISE’s ability to supply rolled can sheet is pending, Crown may source its needs for
such period from other suppliers and credit such purchases against the Minimum Purchase Requirement. 
  
 CONFIDENTIALITY 
  
 The parties agree that
all terms and conditions of this Agreement are and will remain confidential and shall not be disclosed to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever, provided, however, that each party shall have
the right to disclose information to its professional advisors in the ordinary course of their service. Each party shall be responsible for any actions of their representatives that are inconsistent with the party’s obligations under this
section. 
  
 In the event of a breach of, or a threat to breach, any of the
provisions of this paragraph by either Party, each acknowledges that the other will suffer immediate and irreparable harm for which there is no adequate remedy at law, and therefore, the Parties agree that either shall be entitled to 

  

 7 

 
a temporary and permanent injunction restraining a Party from disclosing, in whole or in part, such information. Nothing herein shall be construed as
prohibiting either Party from pursuing other remedies available to it for such a breach, including the recovery of damages. 
  
 The foregoing will not be applicable to information which is generally known to the public at the time it is disclosed, which is subsequently made known to the public
through no fault of Crown or WISE which is required to be disclosed by law or stock exchange regulation, or which is required to be disclosed by reason of a proper order from a court of competent jurisdiction or administrative agency. Any party
receiving notice that it is required by law or stock exchange regulation to make a disclosure or that a court or administrative agency may require the disclosure of any of the terms of this Agreement shall provide sufficient notice to the
non-disclosing Party such that that Party has an opportunity to file all appropriate motions for protective order(s) or any other necessary order to protect the confidentiality of this Agreement. 
  
 MISCELLANEOUS 
  

	(1)	This Agreement shall be construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania. 

  

	(2)	This Agreement and the documents referenced herein contain the entire agreement with respect to the subject matter, and except as otherwise stated herein, supersede and replace any
other prior agreements, whether oral or written. 

  

	(3)	This Agreement may not be amended or modified except in writing and signed by all parties. 

  

	(4)	If any item or provision of this Agreement shall be prohibited by, or made invalid, under applicable law, such provision shall be ineffective only to the extent of such prohibition
or invalidity without invalidating the remainder of the provisions of this Agreement. 

  

	(5)	To the degree that either or both of the parties hereto find it convenient to employ their standard forms, such as forms for purchase order or acknowledgment of order, in
administering the terms of this Agreement, the party may do so but none of the pre-printed terms and/or conditions on such form shall be applicable to the sale of rolled can sheet unless specifically accepted by the other party.

  

 8 

 IN WITNESS WHEREOF, this Agreement is executed the day and date first above written. 
  

									
	 WISE ALLOYS, LLC.
	 	 	 	 CROWN Cork & Seal USA, Inc.

					
	By:  	 	/s/    DON A. FARRINGTON        	 	 	 	By:  	 	/s/    EDWARD C. VESEY        
	 	 	Don A. Farrington	 	 	 	 	 	Edward C. Vesey,
	 	 	Senior Vice President, Sales	 	 	 	 	 	Senior Vice President, Sourcing

  

 9 

 CONVERSION PRICE EXAMPLES: 
  
  
 ***** 
  
  

 10 

 EXHIBIT A 
 - QUALIFICATION PROCEDURE 
 **** 
  

	***	Portions hereof (5 pages) have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406.

  

 SUPPLIER DISQUALIFICATION PROCEDURE 
  
 EXHIBIT B 
 - DISQUALIFICATION PROCEDURE 
 **** 
  

	***	Portions hereof (4 pages) have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406.

 EXHIBIT C 
 - MATERIAL SPECIFICATIONS 
 **** 
  

	***	Portions hereof (32 pages) have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406.

 EXHIBIT D 
 - ELECTRONIC PAYMENTS TERMS 
 **** 
  

	***	Portions hereof (4 pages) have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 406.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}]]