CONFIDENTIAL
TREATMENT
REQUEST
Exhibit 10.2
ALUMINUM PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of the 10th day of January, 1995, by
and between AMERICAN NATIONAL CAN CORPORATION, a Delaware corporation
(hereinafter referred to as "ANC") and ALUMINUM COMPANY OF AMERICA, a
Pennsylvania corporation (hereinafter referred to as "ALCOA").
W I T N E S S E T H:
WHEREAS, ANC is a world leader in the sale and manufacturing of aluminum
beverage cans;
WHEREAS, ALCOA is a world leader in the sale and manufacturing of
(aluminum can-stock) used in the manufacturing of beverage cans; and
WHEREAS, ANC and ALCOA desire to enter into an agreement for the long-term
supply of (aluminum can-stock) for use in the manufacturing of aluminum beverage
cans;
NOW, THEREFORE, in consideration of the mutual promises of each of the parties
set forth below and for other valuable considerations, which both ANC and ALCOA
acknowledge receiving from one another, the parties agree as follows:
ARTICLE 1: Definitions
1.1/Aluminum can-stock. Aluminum can-stock (hereinafter referred to as
"can-stock") shall mean body-stock, end-stock and tab-stock, collectively, that
comply with ANC's standards and specifications set forth in Exhibits X-0, X-0
and A-3.
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1.2/Aluminum can body-stock. Aluminum can body-stock (hereinafter referred to as
"body-stock') shall mean coiled aluminum sheet stock for aluminum beverage can
bodies, conforming to ANC's standards and specifications attached hereto as
Exhibit A-1.
1.3/Aluminum can end-stock. Aluminum can end-stock (hereinafter referred to as
"end-stock") shall mean coiled aluminum sheet stock for aluminum beverage can
ends which has either been treated by ALCOA with a coating (hereinafter referred
to as "coated end-stock"), or has not been so treated by ALCOA (hereinafter
referred to as "bare end-stock"), and conforming to ANC's standards and
specifications attached hereto as Exhibit A-2.
1.4/Aluminum can tab stock. Aluminum can tab stock (hereinafter referred to as
"tab-stock") shall mean coiled aluminum sheet stock for aluminum beverage can
end tabs, conforming to ANC's standards and specifications attached hereto as
Exhibit A-3.
ANC may change its aluminum can-stock standards and specifications from time to
time, as set forth in Article 7, Section 7.1.
ARTICLE II: Term and termination
2.1/Term. This Agreement shall take effect as of March 1, 1995, and shall
continue in full force and effect through December 31, 1997.
2.2/Termination. This Agreement shall extend automatically from year to year
after expiration of the initial term, unless and until terminated by one of the
parties by giving notice to the other party at least twelve months prior to the
expiration of the initial term or any extended term.
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ARTICLE III: Quantities
3.1/Quantity for year 1995. For the calendar year 1995, ANC agrees to purchase
and ALCOA agrees to supply a quantity of 140 million pounds, consisting of 75
million pounds of body-stock and 65 million pounds of end-stock.
3.2/Quantity for years 1996 and 1997. For calendar year 1996, ANC agrees to
purchase, and ALCOA agrees to supply, 25% of ANC's on-going total requirements
of aluminum can-stock in North America. For calendar year 1997, ANC agrees to
purchase, and ALCOA agrees to supply, 30% of ANC's on-going total requirements
of aluminum can-stock in North America. A letter from ANC to ALCOA, attached to
this contract as Exhibit F, will give indications about the potential order of
magnitude of the corresponding quantities.
3.3/On-going requirements. ANC's on-going total requirements of aluminum
can-stock in North America shall mean the aluminum can-stock requirements of the
current (as of January 1, 1994) beverage can manufacturing facilities of ANC in
the United States, Canada and Mexico, and the requirements of any new plant,
line or product to be eventually added by ANC to its manufacturing capacity by
any means (acquisition, construction, or other), provided that: (I) new plant
volume already covered by aluminum can-stock purchase commitments at the time of
the addition to ANC's facilities will be included only upon the earliest date
when such contracts expire or are terminated by ANC; (II) if another supplier
makes an offer to support new plant volume in consideration of an aluminum
purchase commitment from that new plant that would prevent ANC from acquiring
the above-referenced shares (25% in 1996 and 30% in 1997) of its additional
aluminum can-stock requirements from ALCOA, and ALCOA elects not to make a
comparable offer to ANC, then this new plant volume covered by the commitment
shall be included as part of ANC's total requirements under this section only
upon the earliest date when such commitment expires or is terminated by ANC. A
list of ANC's current beverage can manufacturing facilities in North America as
of January 1, 1994, is attached to this Agreement as Exhibit D.
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3.4/Mix allocation. For years 1996 and 1997, the specific mix allocation between
body-stock, end-stock and tab-stock for each year will be as agreed upon by the
parties. A letter from ANC to ALCOA, attached to this contract as Exhibit F,
will give indications about the potential order of magnitude of the
corresponding quantities.
3.5/Additional quantities.
a/Nothing in this Agreement shall prevent, or be construed to prevent, ANC's
right to bid in the marketplace, for years 1996 and 1997, part or all of the
portion of ANC's on-going total requirements of aluminum can-stock in North
America, in excess of the commitments to ALCOA defined in article 3, paragraph
3.2 above. Nothing in this Agreement shall prevent, or be construed to prevent,
ALCOA from offering to supply those additional quantities.
b/If another supplier
of can-stock to ANC fails or is unable to supply ANC the quantities agreed to by
that supplier for a reason other than an ANC default, at ANC's request, ALCOA
will use its best commercial efforts to supply the other supplier's deficiency
on terms and conditions to be agreed upon. ANC shall give ALCOA as much advance
notice of such a circumstance as possible.
c/Until incorporated into the annual
contract volume by an amendment to this contract, the "additional quantities"
described in Article 5, Section 3.5-a and 3.5-b above shall be referred to as
Incremental Contract Volume.
ARTICLE IV: Tolling
4.1/General limitation of tolling. Any can-stock quantity already priced for
delivery during the next year with a ceiling metal component, a minimum-maximum
metal component, or a fixed price metal component established prior to November
1st cannot be tolled under the provisions of Article 4, Section 4.2 and 4.3
below.
4.2/Tolling of scrap. At its sole option, during the entire duration of this
agreement, ANC shall have the right to ask ALCOA to deliver the quantities set
forth in article 3 above, under a straight sale
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arrangement, or a combination of both a straight sale and a scrap tolling
arrangements, with the quantity limitations set forth below. With the exception
of year 1995, ANC must notify ALCOA of its election before November 1st of the
preceding calendar year. Such election shall be made for an entire calendar
year, and cannot then be changed, unless an agreement to the contrary is reached
between the parties. For year 1995, ALCOA shall be given notice within ten (10)
days after execution of this Agreement.
ALCOA will accept shipments from ANC of Class I and Class III aluminum can-stock
scrap from ANC's North American facilities. Deliveries shall be made at ANC's
expense to Midwest locations designated by ALCOA and shall conform to ALCOA's
specifications. The specific volumes for each form are:
-Class I scrap: up to 20% of ALCOA's body-stock shipments to ANC North American
facilities.
-Class III scrap: up to 4% of ALCOA's body-stock shipments to ANC's North
American facilities.
4.3/Tolling of ingot. Provided that, at the date that the election is made, the
LME aluminum ingot future average price for the period of election is equal to
or greater than 80 ct./lb., at ANC's sole option, starting with year 1996, and
in addition to the tolling of scrap covered by Article 4, Section 4.1 above, ANC
shall have the right to ask ALCOA to deliver the quantities set forth in article
3 above, under a straight sale arrangement, or a combination of both a straight
sale and an ingot (P1020) tolling arrangement, with the quantity limitations set
forth below. ANC must notify ALCOA of its election before November 1st of the
preceding calendar year. Such election shall be made for an entire calendar
year, and cannot then be changed, unless an agreement to the contrary is reached
between the parties.
Deliveries of ingot (P1020) shall be made at ANC's expense to Midwest locations
designated by ALCOA and shall conform to ALCOA's specifications.
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The specific volumes of acceptable tolling under this Article 4, Section 4.2,
for each form of can-stock, are:
-up to 30% of ALCOA's body-stock shipments to ANC North American facilities.
-up to 75% of ALCOA's end-stock and tab-stock shipments to ANC's North American
facilities.
4.4/Delivery of metal units for tolling. [*] ALCOA shall deliver to ANC by the
end of each calendar month during the term a quantity of can-stock equal to, and
in return for, the quantity of metal units delivered to ALCOA for tolling at
least 30 days prior to the requested delivery date of the corresponding
can-stock. ALCOA shall weigh the railcars and/or trailers containing the metal
units received from ANC. The weight recorded by ALCOA shall be the weight
delivered to ALCOA unless a discrepancy occurs between ALCOA's and ANC's
recorded weights. Should such a discrepancy occur, the parties shall meet and
negotiate an agreeable resolution of the discrepancy. The scales used by ALCOA
shall be inspected and certified in accordance with applicable state law. Scale
tickets shall be kept by ALCOA and made available to ANC upon request. ALCOA
shall supply to ANC a monthly status report (format to be defined by ANC)
showing, by product class, the weight of metal units received by ALCOA from ANC
and of can-stock shipped to ANC by ALCOA. If ALCOA's receipt of metal units from
ANC exceeds the current month's receipt of can-stock by ANC, the balance of the
metal units must be tolled by ALCOA in the following month.
4.5/Bailment. Toll transactions contemplated by Article 4 shall be considered as
bailments involving the manipulation of the goods. ANC shall retain title to,
and risk of loss for, the metal units delivered to ALCOA for conversion into
can-stock pursuant to this Agreement. ALCOA shall exercise such care in regard
to the metal units as a reasonable careful person would exercise under like
circumstances and ALCOA shall insure such metal while it is in ALCOA's care,
custody and control. ALCOA shall assume liability for loss or damage of metal
units caused by its failure to exercise such care.
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4.6/Commingling. ALCOA reserves the right to commingle metal units delivered by
ANC with any other metal units in ALCOA's possession, and, if so commingled, ANC
shall have an undivided interest therein. ALCOA further reserves the right to
substitute metal units in ALCOA's possession for those metal units delivered by
ANC, provided that the toll converted can-stock delivered by ALCOA to ANC is in
conformity with the appropriate specifications set forth in Exhibits X-0, X-0,
and A-3.
ARTICLE V: Pricing
5.1/Pricing conditions. Provisions of this article shall apply to both tolling
and straight sales.
Deliveries of can-stock by ALCOA shall be made F.O.B. destination within the
continental United States, as designated by ANC. Additional transportation cost
outside the continental United States shall be paid for by ANC. Title to and
risk of loss for can-stock shall pass to ANC upon delivery to ANC's plant. In
the case of tolling, ANC shall be responsible for the cost of transportation of
metal units to the designated ALCOA facility.
ANC shall pay for can-stock supplied and delivered under this Agreement by wire
transfer, [*]. Actual payments shall be disbursed by ANC on or before the
expiration of the payment periods for each type of can-stock determined in
accordance with the applicable provisions of this Agreement. Payment shall be
made to the address supplied to ANC by written notice from ALCOA.
All prices and fees covered in this Agreement will be for the reference
specifications set forth below:
body-stock 3xxx-H19 0.0114" x base width
coated end-stock (clear beverage) 5182-H19 0.0108" x base width
bare tab-stock 5042-H19 0.0110" x base width
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5.2/Straight sale pricing mechanisms. At ANC's option, ANC may place all or any
portion of its annual contract straight sale priced contract volume using one or
more of the following four pricing mechanisms defined and delineated below:
-ceiling pricing,
-minimum-maximum pricing,
-fixed pricing,
-spot pricing.
For fixed pricing, ceiling and minimum-maximum pricing, prices for the metal
component, as well as any applicable risk premiums, shall be fixed for periods
of one (1) month increments, but in no event shorter than one month for any one
period. The distribution among the pricing mechanisms, and the choice of the
pricing period shall be entirely at ANC's option. Any annual contract volume not
priced by either a fixed, ceiling or minimum-maximum price by the last day of
the month two months prior to the scheduled month of delivery shall be priced by
the spot pricing mechanism. At ANC's option, ANC may at anytime, but effective
only starting after the current month, and for a maximum of twenty-four (24)
months after the current month, move from spot pricing to fixed, ceiling or
minimum-maximum pricing. However, once a fixed, ceiling or minimum-maximum price
is established, period, volume and price are firm, and ANC cannot switch between
these mechanisms, or to a spot price, or to tolling, for the corresponding
volumes.
5.3/Ceiling pricing. The ceiling price is the sum of a ceiling price risk
premium, a metal component and a conversion component. Payment of a ceiling
price risk premium entitles ANC to a price no greater than a maximum for the
specific volume of can-stock priced at a ceiling price.
a/Ceiling price risk premium. The ceiling price risk premium reflects the cost
of securing an option to purchase metal at a maximum future price for a
specified delivery period. The ceiling price risk premium is established at the
same time as the ceiling metal component.
b/Ceiling metal component, The ceiling metal component is the sum of
the LME's London Clearing House (LCH) aluminum high-grade futures contracts
price corresponding to the above mentioned option for the agreed future delivery
period, plus the applicable Midwest market delivered premium
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at the time of order acceptance. The notification day and placement period are
as defined below in Article 5, Section 5.3-e.
c/Actual metal component price. The metal component price payable by ANC shall
be the lower of the ceiling metal component and the average Midwest spot price
for aluminum high-grade ingot for the month prior to delivery.
d/Conversion component. For each product (body-stock, end-stock, tab-stock), and
specification, the conversion component of the ceiling price shall be the lower
of (I) ALCOA's published conversion price at the time of shipment, or (II) the
competitive market conversion price. The competitive market conversion price
shall be the lower of (I) for delivery within the continental United States,
ALCOA's lowest weighted average conversion price charged to another customer of
ALCOA for delivery within continental United States, for the same specification
during the same period, and for delivery in Mexico or Canada, ALCOA's lowest
weighted average conversion price charged to another customer of ALCOA for
delivery respectively into Mexico or Canada, for the same specification during
the same period or: (II) the lowest weighted average conversion price for the
same specification during the same period, available to ANC from KAISER and/or
ALCAN, if those competitors are committed to, or are offering to supply,
individually at least 15% of ANC's North American requirements for the relevant
type of can stock.
e/Procedure for establishing a ceiling price. ANC shall advise ALCOA in writing
of the volume and delivery period for which the ceiling price will be
established [Example: on the first Tuesday of the second month of the second
quarter of year Y, at 4:00 p.m. EST, ANC advises ALCOA of their intention to
purchase 105 million pounds of body-stock using the ceiling price mechanism].
ALCOA will confirm in writing to ANC the details of the intended metal coverage
program, provided that the quantity to be hedged on any one day shall not exceed
40 million pounds in the aggregate for all pricing mechanisms, unless
specifically agreed upon by the parties. The notification day ends at 5:00pm
East Standard Time (EST) on the day ANC instructs ALCOA to fix the ceiling of
the metal component for the requested delivery period. In the event that ANC
places more than forty (40) million pounds of volume on any one day, in order to
establish the ceiling of the metal component price, ALCOA will use the weighted
average of the closing prices for the next "X" LME working
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days (the placement period), plus the contangoes or backwardations applicable to
the future delivery period, where "X" is the total volume placed divided by
forty (40) million pounds, and rounded up to the whole number of days [Example:
ALCOA will indicate the ceiling premium expected for Wednesday (40 million
pounds), Thursday (40 million pounds), Friday (25 million pounds), immediately
following the notification Tuesday]. ANC will immediately instruct ALCOA whether
or not to implement the program. After completion, ALCOA will notify ANC as to
the actual metal component ceiling price, and the corresponding option premiums.
Option premiums will be invoiced immediately by ALCOA, and paid by ANC net 30
days.
5.4/Minimum-maximum pricing. The minimum-maximum price is the sum of a minimum-
maximum price risk premium, a metal component and a conversion component.
Payment of a minimum-maximum price risk premium entitles ANC to a price no
greater than a maximum and no lower than a minimum for the specific volume of
can-stock priced at a minimum-maximum price.
a/Minimum-maximum price risk premium. The minimum-maximum price risk premium
reflects the cost of securing an option to purchase metal at a maximum future
price for the agreed future delivery period, less the revenue of selling an
option to sell metal at a minimum future price for the agreed future delivery
period. The minimum-maximum price risk premium is established at the same time
as the minimum-maximum metal components.
b/Minimum-maximum metal components. The minimum-maximum metal components are the
LME's London Clearing House (LCH) aluminum high-grade futures contracts prices
corresponding to the above mentioned options for the agreed future delivery
period, plus the applicable Midwest market delivered premium at the time of
order acceptance. The notification day and placement period are as defined below
in Article 5, Section 5.4-e.
c/Actual metal component. The metal component price payable by ANC shall be the
average Midwest spot price for aluminum high-grade ingot for the month prior to
delivery, provided that if this average is greater than the maximum metal
component, the actual metal component shall be equal to this maximum metal
component, and provided that if this average is lower than the minimum metal
component, the actual metal component shall be equal to this minimum metal
component.
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d/Conversion component. For each product (body-stock, end-stock, tab-stock), and
specification, the conversion component of the minimum-maximum price shall be
the lower of (I) ALCOA's published conversion price at the time of shipment, or
(II) the competitive market conversion price. The competitive market conversion
price shall be the lower of (I) for delivery within the continental United
States, ALCOA's lowest weighted average conversion price charged to another
customer of ALCOA for delivery within continental United States, for the same
specification during the same period, and for delivery in Mexico or Canada,
ALCOA's lowest weighted average conversion price charged to another customer of
ALCOA for delivery respectively into Mexico or Canada, for the same
specification during the same period or: (II) the lowest weighted average
conversion price for the same specification during the same period, available to
ANC from KAISER and/or ALCAN, if those competitors are committed to, or are
offering to supply, individually at least 15% of ANC's North American
requirements for the relevant type of can stock.
e/Procedure for establishing a minimum-maximum price. ANC shall advise ALCOA in
writing of the volume and delivery period for which the minimum-maximum price
will be established [Example: on the first Tuesday of the second month of the
second quarter of year Y, at 4:00 p.m. EST, ANC advises ALCOA of their intention
to purchase 105 million pounds of body-stock using the minimum-maximum price
mechanism]. ALCOA will confirm in writing to ANC the details of the intended
metal coverage program, provided that the quantity to be hedged on any one day
shall not exceed 40 million pounds, in the aggregate for all pricing mechanisms,
unless specifically agreed upon by the parties. The notification day ends at
5:00pm East Standard Time (EST) on the day ANC instructs ALCOA to fix the
minimum and maximum of the metal component for the requested delivery period. In
the event that ANC places more than forty (40) million pounds of volume on any
one day, in order to establish the ceiling of the metal component price, ALCOA
will use the weighted average of the closing prices for the next "X" LME working
days (the placement period), plus the contangoes or backwardations applicable to
the future delivery periods, where "X" is the total volume placed divided by
forty (40) million pounds, and rounded up to the whole number of days [Example:
ALCOA will indicate the minimum/maximum premium expected for Wednesday (40
million pounds), Thursday (40 million pounds), Friday (25 million pounds),
immediately following the notification Tuesday]. ANC
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will immediately instruct ALCOA whether or not to implement the program. After
completion, ALCOA will notify ANC as to the actual metal component
minimum-maximum price, and the corresponding option premiums. Option premiums
will be invoiced immediately by ALCOA, and paid by ANC net 30 days.
5.5/Fixed pricing. The fixed price is the sum of a metal component fixed price
and a conversion component.
a/Metal component fixed price. The metal component fixed price is the LME's
London Clearing House (LCH) aluminum high-grade futures contracts closing price
for the agreed future delivery period, plus the applicable Midwest market
delivered premium at the time of order acceptance. The notification day and
placement period are as defined below in Article 5, Section 5.5-d.
b/Actual metal component price. The metal component price payable by ANC is
equal to the metal component fixed price.
c/Conversion component. For each product (body-stock, end-stock, tab-stock), and
specification, the conversion component of the fixed price shall be the lower of
(I) ALCOA's published conversion price at the time of shipment, or (II) the
competitive market conversion price. The competitive market conversion price
shall be the lower of (I) for delivery within the continental United States,
ALCOA's lowest weighted average conversion price charged to another customer of
ALCOA for delivery within continental United States, for the same specification
during the same period, and for delivery in Mexico or Canada, ALCOA's lowest
weighted average conversion price charged to another customer of ALCOA for
delivery respectively into Mexico or Canada, for the same specification during
the same period or: (II) the lowest weighted average conversion price for the
same specification during the same period, available to ANC from KAISER and/or
ALCAN, if those competitors are committed to, or are offering to supply,
individually at least 15% of ANC's North American requirements for the relevant
type of can stock.
d/Procedure for establishing a fixed price. ANC shall advise ALCOA in writing of
the volume and delivery period for which the fixed price will be established.
ALCOA will confirm in writing to ANC the details of the intended metal coverage
program, provided that the quantity to be fixed on any one day shall not exceed
40 million pounds, in aggregate for all pricing mechanisms, unless specifically
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agreed upon by the parties. The notification day ends at 5:00pm East Standard
Time on the day ANC instructs ALCOA to fix the price of the metal component for
the requested delivery period. In the event that ANC places more than forty (40)
million pounds of volume on any one day, in order to establish the metal
component price, ALCOA will use the average of the LME cash settlement prices
for the next "X" LME working days (the placement period), plus the contangoes or
backwardations applicable to the future delivery periods, where "X" is the total
volume placed divided by forty (40) million pounds, and rounded up to the whole
number of days. ANC will immediately instruct ALCOA whether or not to implement
the program. After completion, ALCOA will notify ANC as to the actual metal
component fixed price.
5.6/Spot pricing. The spot price is the sum of the metal component price and the
conversion price.
a/Metal component. The spot price metal component is the average of the LME's
London Clearing House (LCH) aluminum high-grade contracts closing prices for the
month prior to delivery, plus the average applicable Midwest market delivered
premium for the same month.
b/Conversion component.
For each product (body-stock, end-stock, tab-stock), and specification, the
conversion component of the spot price shall be the lower of (I) ALCOA's
published conversion price at the time of shipment, or (II) the competitive
market conversion price. The competitive market conversion price shall be the
lower of (I) for delivery within the continental United States, ALCOA's lowest
weighted average conversion price charged to another customer of ALCOA for
delivery within continental United States, for the same specification during the
same period, and for delivery in Mexico or Canada, ALCOA's lowest weighted
average conversion price charged to another customer of ALCOA for delivery
respectively into Mexico or Canada, for the same specification during the same
period or: (II) the lowest weighted average conversion price for the same
specification during the same period, available to ANC from KAISER and/or ALCAN,
if those competitors are committed to, or are offering to supply, individually
at least 15% of ANC's North American requirements for the relevant type of can
stock.
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5.7/Conversion component of tolling prices.
The tolling fee for Class I scrap is established for year 1995 at [*] above the
body-stock conversion price defined in Article 5, Section 5.3-d above. The
tolling fee for Class III scrap is established for year 1995 at [*] above the
body-stock conversion price defined in Article 5, Section 5.3-d above. Both
tolling fees are subject to yearly adjustment by multiplication by the ratio of
the Producer Price Index of September of the preceding year by the Producer
Price Index of September 1994 [Example: if the PPI index of September 1994 is
324, and the PPI index of September 1995 is 337, and provided that the
body-stock conversion fee is [*], the maximum tolling fee for Class I scrap for
year 1996 shall be [*] x (337/324) = [*], but may not be higher than the
competitive tolling market fee. The competitive tolling market fee shall be the
lower of (I) for delivery within the continental United States, ALCOA's lowest
weighted average tolling fee charged by ALCOA to another customer for delivery
within the continental United States, for the same specifications during the
same period, and for delivery in Mexico or Canada, ALCOA's lowest weighted
average tolling fee charged by ALCOA to another customer for delivery
respectively within Mexico or Canada, or: (II) the weighted average tolling fee
for the same specifications during the same period, available to ANC from KAISER
and/or ALCAN if those competitors are committed to, or are offering to supply,
individually, at least 15% of ANC's North American requirements for the relevant
product.
5.8/Adjustment of the conversion component to meet competition.
a/Should ANC at any time provide ALCOA with evidence that ANC has a bona fide
offer from KAISER and/or ALCAN with a conversion price and/or tolling fees more
favorable than those ANC gets from ALCOA, ALCOA will adjust its relevant
conversion prices and/or tolling fees to the level of the competitive offer at
the effective date of such offer, subject to the provisions of Article 5,
Sections 5.8-c and 5.8-d.
b/Once the price for can-stock has been established, this price shall be
adjusted only for changes in conversion prices or tolling fees pursuant to
Article 5, Section 5.8-a above, or to reflect the difference in specification of
an order to the base specification. The price shall not be adjusted for any
changes
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in metal, contango, backwardation, ceiling risk premium, minimum-maximum
risk premium or delivery premiums during the period.
c/Should ANC at any time provide ALCOA with evidence that ANC has a bona fide
offer from KAISER and/or ALCAN to sell can-stock in the United States, Mexico or
Canada on a straight sale pricing more favorable than the pricing being charged
by ALCOA hereunder, and the conversion price is not explicitly stated, then the
competitive conversion price for that country will be derived by subtracting the
Midwest price for the metal for the relevant period of the offer on the date of
the competitive offer from the competitor's straight sale price. If ALCOA elects
to meet this competitive situation, at ALCOA's option, ALCOA may meet either the
outright sales price, or the derived matched conversion price.
Because of the volatility of the metal market, both parties agree to act on a
timely basis to ensure that all competitive price comparisons are
contemporaneous. ALCOA will advise ANC within thirty (30) working days of the
terms of any sale made by ALCOA to any customer for delivery in continental
United States, Mexico and Canada, as appropriate, that reflects a conversion
price lower than the last price offer made by ALCOA to ANC, and will adjust
ANC's price to the date of the relevant sale. ANC will advise ALCOA within five
(5) working days that ANC has a bona fide offer from ALCAN or KAISER
individually to sell at least 15% of ANC's relevant can-stock product
requirements on either a total pricing or a conversion price basis more
favorable than the price charged by ALCOA, and ANC will give ALCOA ten (10)
working days to match, at ALCOA's option, either the conversion price or the
total straight sale price. If ANC doesn't receive ALCOA's agreement to match the
competitive offer within the ten (10) working days period, then ANC shall be
entitled, without any liability beyond the metal component price liability
described in Article 5, Section 5.10 below, to purchase the quantity of
can-stock offered by the other supplier with a corresponding reduction in ANC's
committed volume to ALCOA.
d/For competitive straight sale and/or conversion price offers which ALCOA is
required to meet, or bring to ANC, any of the following price arrangements shall
be excluded from consideration in determining the value of the offer:
-unique systems savings programs,
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 15/27
STRICTLY PRIVATE
-specific promotional prices or promotional tolling fees,
-spot pricing or toll fees for incremental business,
-annual or multi-year pricing based on or tolling fees derived from forward
metal prices or xxxxxx,
-multi-year pricing or tolling fees arrangements made prior to the execution of
this contract
-any special discounts to ANC off "the best or lowest market price", including
any discount offered off the ALCOA price list by any reliable supplier to ANC
for a fixed long-term volume. In the event ANC's competitive price offer is
below ALCOA's price by more than $0.005 per pound, at ALCOA's request, ANC will
confirm that the offer does not contain any of the excluded arrangements set
forth above in this Article 5, Section 5.8-d.
5.9/Liquidation of metal positions. After ANC and ALCOA have agreed upon a
contract volume for a period, and if for any reason, permitted by this Agreement
or by ALCOA, any amount of that commitment is not purchased by ANC, ALCOA shall,
with the agreement of both parties, either liquidate any metal future position
relating to this volume at ANC's sole expense, or apply such metal position
against the next available scheduled shipment volume until all such metal is
consumed. In the event ALCOA liquidates any futures or option positions, ANC
shall forfeit any prepaid fees and shall be obligated to pay any reasonable
expenses incurred in the liquidation.
5.10/Change in market conditions. If, during the life of this Agreement, the
contractual price mechanisms described hereinabove no longer reflect the
announced ALCOA price mechanisms, the price mechanism available to ANC from
ALCAN or KAISER, or the price mechanism currently being offered to other ALCOA's
customers by ALCOA, ANC and ALCOA agree to meet and discuss these changes and
their impact on this Agreement, with the goal not to disadvantage either party.
5.11/lnvoicing and credit procedures. For all pricing mechanisms, the invoice
price is the sum of the actual metal component defined in Article 5, Sections
5.3-c, 5.4-c, 5.5-c, and 5.6-c, plus the published ALCOA conversion revenue. In
the event that during any shipment month, an agreed upon conversion price
competitive situation exists, then ALCOA will issue to ANC a credit for the
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 16/27
STRICTLY PRIVATE
difference between the published conversion price, and the competitive
conversion price during the month following shipment. If appropriate, the
parties may agree on more specific procedures for a defined period of time.
ARTICLE VI: Scheduling.
6.1/One line-one mill. The parties agree that, as far as practically possible,
they will dedicate specific entire lines (ANC) to specific xxxxx (ALCOA), and
specific xxxxx (ALCOA) to specific entire lines (ANC). The list of lines to be
serviced by ALCOA under this Article 6, Section 6.1, in 1995, is set forth in
Exhibit B. The list of lines to be serviced by ALCOA under this Article 6,
Section 6.1, for subsequent years, will be agreed upon each year by the parties.
6.2/Annual forecasts. As soon as practicable and for the first time within two
(2) weeks after the effective date of this Agreement, and thereafter by November
1 of each subsequent year, ANC shall provide ALCOA with a schedule showing ANC's
annual estimates for purchase of each type of can-stock for the following year
of the Agreement.
6.3/Monthly commitments. ANC will use its best commercial efforts to schedule
and release in equal monthly shipments, with seasonality not to exceed plus or
minus 5%. Each calendar month (M), ANC will provide ALCOA with an estimate of
its requirements by type of can-stock and by delivery location for months M+2
and M+3. The estimate for month M+2 shall be considered as a firm commitment for
ALCOA to ship and for ANC to take delivery that can be modified only by
agreement between the parties. [Example: by the end of June, ANO shall give
ALCOA an estimate of can-stock delivery for the months of August (M+2) and
September (M+3). August volume will be firm delivery schedule, while September
shall still be considered an estimate.]
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 17/27
STRICTLY PRIVATE
ARTICLE VII: Quality
7.1/Specifications. Specifications for can-stock to be delivered to ANC are set
forth in Xxxxxxxx X- 0, X-0, and A-3. ANC may at any time change its
specifications for any type of can-stock provided ALCOA does not object in
writing to ANC, with a detailed explanation of the reasons for the objection,
within thirty (30) days of ANC's notification to ALCOA of the requested new
specifications. ALCOA may not object if ANC's specifications are within
specifications generally available to other aluminum container manufacturers
from ALCOA at the time of the change. A specification change shall be effective
for orders to be delivered sixty (60) days after the date of such change.
Can-stock covered by this Agreement shall meet ANC's specifications and
standards set forth in Exhibits X-0, X-0, and A-3, as modified from time to time
hereafter in accordance with this Article 7, Section 7.1.
7.2/Rejections. Aluminum can-stock shall be subject to rejection by ANC if: (1)
it fails to meet ANC's specifications and standards, or (2) it fails to run in
comparably equipped ANC's plants in accordance with the standards typically
applied by ANC to its other can-stock suppliers at that or other plants, as more
generally described in Exhibit E. ALCOA and ANC shall work together in good
faith to determine whether the rejection was the fault of ALCOA or ANC, and, if
determined to be the fault of ALCOA, to agree upon the appropriate disposition
of the rejected material. In resolving the issues of responsibility and
disposition, the parties shall utilize the customs and procedures currently
utilized between them. Should ANC reject aluminum can-stock supplied by ALCOA
because of ALCOA's failure as described above, ANC shall, as agreed to by the
parties, either receive replacement aluminum can-stock of an equivalent type and
for the same amount of metal units, or a cash refund (or credit) in the full
amount of the purchase price or toll fee of the rejected can-stock. If ANC
receives a refund or a credit, the volume of rejected can-stock, whether
purchased on a straight sale or tolling basis, shall be at ANC's sole option
credited against ANC's
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 18/27
STRICTLY PRIVATE
volume commitment hereunder. At ALCOA's option, ANC will either return such
rejected aluminum can-stock to ALCOA, or ALCOA shall deduct the scrap value of
such can-stock received by ANC. If rejected can-stock was acquired on a toll
basis, and ANC receives a refund or credit, the parties shall also agree upon an
appropriate adjustment to such refund or credit to reflect the value of the
original scrap. ALCOA shall, on a case by case basis, give consideration to
reimbursing ANC for (1) ANC's reasonable direct cost associated with the
processing by ANC of defective material in accordance with practices and
procedures currently in place between the parties, (2) if relevant, ANC's
replacement of defective and/or rejected material with comparable substitute
material from another qualified supplier.
Attached hereto as Exhibit E is the procedure under which ALCOA may be
disqualified as a supplier of aluminum to ANC as a result of ALCOA's supply of
material which does not meet ANC's specifications and standards. Should ALCOA be
disqualified at any plant location pursuant to the attached procedure, ALCOA
will, within a three-month period after such disqualification, be given the
opportunity to re-qualify through ANC's normal re-qualification procedure
provided that ALCOA has given reasonable assurances to ANC that the quality
problem that gave rise to ALCOA's disqualification has been resolved. In such
event, ANC will be relieved from the obligation to purchase the quantity of
metal that would normally have been purchased from ALCOA during the period of
disqualification (such quantity of metal being defined as the percentage of the
annual volume for that year that the period of disqualification bears to one
year).
ARTICLE VIII: Warranty
8.1/Warranty. ALCOA warrants that the can-stock supplied hereunder will conform
to ANC's standards and specifications set forth in Exhibits X-0, X-0, and A-3,
as modified from time to time hereafter as provided in Article 7, Section 7.1,
that it will convey good title thereto, and that such can-stock will be
delivered from any lawful security interest or any other lien or encumbrance.
ALCOA makes no warranty that the can-stock shall be merchantable or fit for any
particular purpose.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 19/27
STRICTLY PRIVATE
ALCOA makes no warranty, express or implied, except such as is expressly set
forth herein. ALCOA shall not be liable to ANC for any incidental or
consequential damage from any breach of this Agreement.
ARTICLE IX: Force Majeure. If the full or partial performance of this Agreement
by either party hereto (other than the payment of money due hereunder) is
delayed, interrupted, or prevented by reason of any strike, labor difficulty,
lockout, fire, explosion, fight, mobilization, war (declared or undeclared),
hostilities, riots, rebellion, revolution, blockade, act of any government or
agency or subdivision thereof, acts of public enemies, or other acts of God or
any other cause, whether or not of the nature or character specifically
enumerated above, which is beyond the reasonable control of such party, then:
(a) such party shall give notice to the other of the existence of the Force
Majeure event and the impact of the event on its North American facilities;
(b) such party shall be excused from the performance of this Agreement (other
than the payment of monies due hereunder) while and to the extent that such
party is delayed, interrupted or prevented from so performing by one or more of
such causes; and
(c) the performance of this Agreement shall be resumed as soon as practicable
after such disability is removed.
If a party is only partially disabled by an event of force Majeure, the disabled
party's obligations shall be partially reduced by the amount of the
proportionate effect of the disabling event on all of that party's North
American facilities.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 20/27
STRICTLY PRIVATE
ARTICLE X: Default
10.1/Unexcused failure to supply. Unless otherwise excused due to Force Majeure,
if ALCOA fails to supply can-stock to ANC in accordance with the terms of an
acknowledged order, and, as a result of this failure, ALCOA either misses a
delivery or delivers non-conforming can-stock to ANC, ANC shall notify ALCOA
within ten (10) business days of this failure. Upon receipt of this notice,
ALCOA and ANC shall meet and discuss the prompt replacement shipment of
can-stock meeting the specification from ALCOA's facilities. In the event that
the parties cannot work out satisfactory arrangements for replacement can-stock,
the parties shall discuss arrangements for substitute can-stock from third
parties if necessary to avoid production interruptions of ANC's facilities. The
replacement of can-stock by ALCOA or substitute of can-stock from third parties
shall constitute ANC's exclusive remedy for ALCOA's un-excused failure to supply
can-stock pursuant to the terms of an acknowledged order. The non-conforming
can-stock shall then be returned to ALCOA at ALCOA's cost and expense.
10.2/Other default. Any other material failure of either party to perform or
observe its obligations under this Agreement shall be a default of this
Agreement. Unless this default is excused by Force Majeure or diligent action is
taken to remedy this failure within thirty (30) days after notice by the
non-defaulting party to the defaulting party specifying the default, then the
non-defaulting party shall have such remedy or remedies as are provided by
statute, or by law, equity or in bankruptcy or insolvency proceedings.
10.3/Effect on parties. Subject to and without limitation of paragraph 10.4
below, in the event of such a termination:
(a) ALCOA shall return to ANC any property belonging to ANC at ALCOA's
manufacturing facilities; the cost of such return shall be the responsibility of
ALCOA in the event of an ALCOA default and ANC in the event of an ANC default;
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 21/27
STRICTLY PRIVATE
(b) The parties shall pay one another any amounts that may be due and unpaid
within thirty (30) days after any such termination.
10.4/No prejudice. Except as otherwise provided in this Article 10, termination
of this Agreement under the preceding paragraphs shall be without prejudice to
any right or remedy available to either party under the provisions of this
Agreement, or any law, statute or regulation. Upon termination of this Agreement
by either of the parties, any payment to be made under this Agreement shall
become due immediately.
ARTICLE XI: Miscellaneous
11.1/Integration and Modification. This Agreement forms the entire agreement
between the parties as to the subject matter of this Agreement, and all prior
agreements (including without limitation the Supply Agreement dated June 1,
1990), commitments, representations, writings, and discussions are merged into
and superseded by this Agreement. This Agreement may not be released,
discharged, changed, or modified in any manner except by an instrument in
writing signed by a duly authorized officer or representative of each of the
parties.
11.2/Purchase and sales forms. No printed terms or conditions appearing on any
sales acknowledgment of ALCOA or shipment release or purchase order forms of ANC
shall govern the purchase hereunder, and the terms and conditions of this
Agreement shall be controlling.
11.3/Waivers. The failure of either party hereto to enforce at any time any of
the provisions of this Agreement shall in no way be construed to be a waiver of
such provisions nor in any way to affect the validity of this Agreement or any
part thereof, nor the right of any party thereafter to enforce each and every
such provision. No waiver of any breach of this Agreement shall be held to be a
waiver of any other or subsequent breach.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 22/27
STRICTLY PRIVATE
11.4/Assignment and delegation. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns.
Neither party may assign this Agreement or any right arising hereunder, nor
delegate any duty or obligation arising hereunder, without the prior written
consent of the other party.
11.5/Notices. All notices and other communications provided for hereunder shall
be in writing and given by registered or certified mail, or responsible
overnight courier, addressed as provided below, with acknowledgment of receipt
requested, or by telex, telegram, cable or facsimile, sent or delivered to the
addressee below, or, as to each party, at such addresses as shall be designated
by such party hereafter in a written notice to the other. All such notices and
communications shall be effective when hand delivered or, in the case of notice
by facsimile, on the day of receipt if received prior to 5:00p.m. EST on a
working day or on the next working day if received after 5:00p.m. EST on a
working day, provided that the sender's copy includes the appropriate
acknowledgment of receipt by the receiver's facsimile machine.
If to ALCOA: Aluminum Company of America If to ANC: American National Can Co.
Rigid Packaging Division 8770 West Bryn Mawr
0000 Xxxxxxxxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
000 Xxxxx Xxx Xxxxxx Xxxxxxxxx: Corporate
XXXXXXXXX, XX 00000 Secretary
Attention: President
11.6/Audits. ANC shall be entitled to make physical inventory audits of its
property in ALCOA's possession at any time, upon reasonable notice, during
ALCOA's normal business hours. In addition, ANC may perform reasonable quality
audits of ALCOA's systems, procedures and processes to assure that can-stock
produced hereunder meets the specifications and other requirements contained in
this Agreement.
11.7/Confidentiality. ALCOA shall hold in confidence during and for a period of
10 years after the term of this Agreement, shall not disclose to anyone other
than employees of ALCOA who have a need to know, and shall use only for ANC's
benefit, any confidential technical information (including,
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 23/27
STRICTLY PRIVATE
without limitation, specifications, drawings, designs, samples and models)
furnished by ANC in connection with this Agreement; provided that no document
furnished to ALCOA by ANC shall be deemed to be confidential unless it is marked
"CONFIDENTIAL" or the equivalent when furnished.
ANC shall hold in confidence during and for a period of 10 years after the term
of this Agreement, shall not disclose to anyone other than employees of ANC who
have a need to know, and shall use only for ALCOA's benefit, any confidential
technical information (including, without limitation, specifications, drawings,
designs, samples and models) furnished by ALCOA in connection with this
Agreement; provided that no document furnished to ANC by ALCOA shall be deemed
to be confidential unless it is marked "CONFIDENTIAL", "STRICTLY PRIVATE", or
the equivalent when furnished.
Neither party shall have liability for disclosures of information otherwise
prohibited under this Section if the information:
(a) was already in the public domain when disclosed; or
(b) was obtained lawfully from a third party not under a confidentiality
obligation to either ANC or ALCOA; or
(c) was disclosed in accordance with requirements imposed by any applicable law,
rule or regulation or by any court or regulatory agency with jurisdiction over
the disclosing party, provided that the disclosing party reasonably assisted and
cooperated with the other party in attempting to preserve the confidentiality of
the information involved, including without limitation
(I) immediately notifying the other party upon learning of any such
disclosure requirement and
(II) not disclosing the information earlier than required.
For purposes of this Agreement, subject to the exceptions set forth in the
preceding sentence, information regarding a party's pricing, production, raw
materials, labor and other costs, suppliers, customers and technology, whether
or not labeled or described by such party as "confidential," shall
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 24/27
STRICTLY PRIVATE
be considered confidential information and subject to this Section in addition
to any other information identified from time to time by such party as
"confidential."
(d) is independently developed by the recipient.
11.8/Headings. The captions, titles and headings described in this Agreement
have been inserted as a matter of convenience and reference only and do not
limit or describe the scope of this Agreement or otherwise control or affect the
interpretation of this Agreement.
11.9/Applicable Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Illinois.
11.10/Severability. In the event any provision of this Agreement (whether a
paragraph, sentence or a portion thereof) is determined by a court of competent
jurisdiction to be null and void or unenforceable, such provision shall be
deemed to be severed, and the remaining provisions of this Agreement shall
remain in full force and effect.
11.11/Independence of Parties, further assurances and certain representations.
(a) The parties acknowledge that the contractual relationship established
hereunder shall be one of independent contractors. ANC and ALCOA shall not, by
execution of this Agreement, be deemed partners, joint venturers or agents for
one another for any purpose whatsoever.
(b) Each party warrants to the other that:
(I) it has the corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby, and
(II) this Agreement has been duly executed and delivered on its behalf.
(c) Each of the parties agrees to furnish to the other such additional documents
and instruments as shall be reasonably requested to effectuate the purposes of
this Agreement.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 25/27
STRICTLY PRIVATE
11.12/Legislative Increases. During the term of this Agreement, federal, state
or local legislative changes could have a material impact on ALCOA's costs of
supplying can-stock to ANC. All prices and fees are subject to increase by ALCOA
to reflect these cost increases, provided and only to the extent that these
costs increases are also reflected in the prices of can-stock available in the
market, and subject to the provisions of Article 5, Sections 5.3-d, 5.4-d,
5.5-d, 5.6-d, 5.7 and 5.8 above. The parties shall meet and discuss the impact
of such changes and the actions to be taken to minimize the cost of compliance.
11.13/Hardship. If at any time or from time to time during the term of this
Agreement, without default of the party concerned, an intervening event or
change of circumstances occurs which is beyond the said party's control, when
acting reasonably and prudently, such that the consequences and effects of which
create a set of circumstances which are fundamentally different from what was
contemplated by the parties at the time of entering into this Agreement. Upon
the occurrence of such an event, the party claiming that it is placed in such a
position may, by notice, request the other to meet to determine if said
occurrence has happened and, if so, agree upon what, if any, adjustment in the
price then in force under this Agreement and/or other terms and conditions
hereof is justified under the circumstances, in fairness to the parties, to
alleviate the consequences and effects of said occurrence.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first written above.
WITNESS ALUMINUM COMPANY OF AMERICA
/s/ Illegible By: /s/Xxxxxx Xxxxxxxxx
WITNESS AMERICAN NATIONAL CAN COMPANY
/s/Illegible By: /s/Xxxxxx Xxxxxxx
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 26/27
STRICTLY PRIVATE
List of exhibits identified in this Agreement
Exhibit A-1 - ANC standards and specifications for body-stock.
Exhibit A-2 - ANC standards and specifications for end-stock.
Exhibit A-3 - ANC standards and specifications for tab-stock.
Exhibit B - Ship to locations for year 1995.
Exhibit C - ALCOA's specifications for each type of metal unit used for toll
conversion into can-stock.
Exhibit D - List of ANC's current beverage can manufacturing facilities in North
America as of January 1st, 1994.
Exhibit E - Disqualification procedure.
Exhibit F - Letter from ANC to ALCOA giving certain indications in relationship
with potential volumes and mix allocation for years 1996 and 1997.
Exhibits X-0, X-0, and A-3: ANC standards and specifications
Exhibit A-1 - ANC standards and specifications for body-stock (attached).
Exhibit A-2 - ANC standards and specifications for end-stock (attached).
Exhibit A-3 - ANC standards and specifications for tab-stock (attached).
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Exhibit A-1
ANC standards and specifications for body-stock
Exhibit A-1-a: 3004 Alloy H19 Temper (1 page, attached)
Exhibit A-1-b: 3104 Alloy Hl9 Temper (1 page, attached)
Exhibit A-1-c: 3204 Alloy Hl9 Temper (1 page, attached)
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
NUMBER: RD/S-88-005A Page 1 of 1
DATE: 09/23/88
REVISED: 12/07/93
EXHIBIT A-1-a
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
Final After Signature Approvals
================================================================================
Material Identification (Name, Code, Mfgr. Etc.)
Aluminum: 3004 Alloy H19 Temper. Application: Drawn and Ironed Beverage
Can Bodies.
================================================================================
Primary (Fixed) Specifications:
1. Tolerances:
a) Gauge: +/-0.0002"
b) Coil Width: -0.000", +0.125"
d) Camber: 0.015" maximum in 30", 1/4" maximum
in 10 ft.
2. Mechanical Properties:
a) Yield Strength: 42.5 ksi maximum as received and 36.0
ksi minimum after 400o F
bake for 10 minutes.
b) Elongation in 2": 3% minimum as received
3. Earing: 2.5% maximum at a 42% draw
reduction using a controlled gap hold
down to minimize pinching of ears.
4. Surface Roughness: 15-25 microinches (AA).
5. Chemical Composition (% maximum unless shown otherwise): 0.30 Si, 0.70 Fe,
0.25 Cu, 1.0-1.5 Mn, 0.8- 1.3 Mg, 0.25 Zn, 0.0001 Be, others 0.05 each and
0.15 total, balance A1.
================================================================================
Secondary (Variable) Specifications:
1. Coils are to be relubed with DTI 5600 PL at 25+/-10 mg/ft.2/side. Forest
Park requires Nalco 6468AB at 25+/-10 mg/ft2/side. Other relubes may only
be supplied when approved by Development and/or Materials Process
Engineering.
================================================================================
Remarks:
1. Presence of oxides, inclusions, laminations, slivers, rolled-over
scratches, rolled-in dirt, abrasions, pinholes, water stain corrosion and
stains may be cause for rejection.
2. Material with inadequate formability for drawing and ironing is subject to
rejection.
3. Flatness/shape inadequate to permit feeding in the cupper press is subject
to rejection.
4. ASTM B557 and E8 apply.
================================================================================
Approvals (As Applicable)
================================================================================
Development XXXX MFOP MTMG
================================================================================
By /s/Illegible By /s/Illegible By /s/Illegible By /s/Illegible
Date 12/14/93 Date 2/9/94 Date 1/7/94 Date 12/14/93
================================================================================
================================================================================
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
NUMBER: RD/S-88-005A Page 1 of 1
DATE: 09/23/88
REVISED: 12/07/93
EXHIBIT A-1-b
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
Final After Signature Approvals
================================================================================
Material Identification (Name, Code, Mfgr. Etc.)
Aluminum: 3004 Alloy H19 Temper. Application: Drawn and Ironed Beverage
Can Bodies.
================================================================================
Primary (Fixed) Specifications:
1. Tolerances:
a) Gauge: +/-0.0002"
b) Coil Width: -0.000", +0.125"
d) Camber: 0.015" maximum in 30", 1/4" maximum
in 10 ft.
2. Mechanical Properties:
a) Yield Strength: 42.5 ksi maximum as received and 36.0
ksi minimum after 400o F
bake for 10 minutes.
b) Elongation in 2": 3% minimum as received
3. Earing: 2.5% maximum at a 42% draw
reduction using a controlled gap hold
down to minimize pinching of ears.
4. Surface Roughness: 15-25 microinches (AA).
5. Chemical Composition (% maximum unless shown otherwise): 0.60 Si, 0.80 Fe,
0.05-0.25 Cu, 0.8-1.4 Mn, 1.3-1.5 Mg, 0.25 Zn, 0.10 Ti, 0.0001 Be, others
0.05 each and 0.15 total, balance A1.
================================================================================
Secondary (Variable) Specifications:
1. Coils are to be relubed with DTI 5600 PL at 25+/-10 mg/ft.2/side. Forest
Park requires Nalco 6468AB at 25+/-10 mg/ft2/side. Other relubes may only
be supplied when approved by Development and/or Materials Process
Engineering.
================================================================================
Remarks:
1. Presence of oxides, inclusions, laminations, slivers, rolled-over
scratches, rolled-in dirt, abrasions, pinholes, water stain corrosion and
stains may be cause for rejection.
2. Material with inadequate formability for drawing and ironing is subject to
rejection.
3. Flatness/shape inadequate to permit feeding in the cupper press is subject
to rejection.
4. ASTM B557 and E8 apply.
================================================================================
Approvals (As Applicable)
================================================================================
Development XXXX MFOP MTMG
================================================================================
By /s/Illegible By /s/Illegible By /s/Illegible By /s/Illegible
Date 12/14/93 Date 2/9/94 Date 1/7/94 Date 12/14/93
================================================================================
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
NUMBER: RD/S-88-005A Page 1 of 1
DATE: 01/02/93
REVISED: 12/07/93
EXHIBIT A-1-c
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
Final After Signature Approvals
================================================================================
Material Identification (Name, Code, Mfgr. Etc.)
Aluminum: 3004 Alloy H19 Temper. Application: Drawn and Ironed Beverage
Can Bodies.
================================================================================
Primary (Fixed) Specifications:
1. Tolerances:
a) Gauge: +/-0.0002"
b) Coil Width: -0.000", +0.125"
d) Camber: 0.015" maximum in 30", 1/4" maximum
in 10 ft.
2. Mechanical Properties:
a) Yield Strength: 44.0 ksi maximum as received and 37.5
ksi minimum after 400o F
bake for 10 minutes.
b) Elongation in 2": 3% minimum as received
3. Earing: 2.5% maximum at a 42% draw
reduction using a controlled gap hold
down to minimize pinching of ears.
4. Surface Roughness: 15-25 microinches (AA).
5. Chemical Composition (% maximum unless shown otherwise): 0.60 Si, 0.80 Fe,
0.05-0.25 Cu, 0.8-1.4 Mn, 1.3-1.5 Mg, 0.25 Zn, 0.10 Ti, 0.0001 Be, others
0.05 each and 0.15 total, balance A1.
================================================================================
Secondary (Variable) Specifications:
1. Coils are to be relubed with DTI 5600 PL at 25+/-10 mg/ft.2/side. Forest
Park requires Nalco 6468AB at 25+/-10 mg/ft2/side. Other relubes may only
be supplied when approved by Development and/or Materials Process
Engineering.
================================================================================
Remarks:
1. Presence of oxides, inclusions, laminations, slivers, rolled-over
scratches, rolled-in dirt, abrasions, pinholes, water stain corrosion and
stains may be cause for rejection.
2. Material with inadequate formability for drawing and ironing is subject to
rejection.
3. Flatness/shape inadequate to permit feeding in the cupper press is subject
to rejection.
4. ASTM B557 and E8 apply.
================================================================================
Approvals (As Applicable)
================================================================================
Development XXXX MFOP MTMG
================================================================================
By /s/Illegible By /s/Illegible By /s/Illegible By /s/Illegible
Date 12/14/93 Date 2/9/94 Date 1/10/93 Date 12/14/93
================================================================================
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Exhibit A-2
ANC standards and specifications for end-stock
Exhibit A-2-a: 5182 Alloy H19 Temper Coated (2 pages, attached)
Exhibit A-2-b: 5182 Alloy H19 Temper Bare (1 page, attached)
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
NUMBER: RD/S-88-013A Page 1 of 2
DATE: 09/23/88
REVISED: 01/02/93
EXHIBIT A-2-a
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
Final After Signature Approvals
================================================================================
Material Identification (Name, Code, Mfgr. Etc.)
Aluminum: 5182 Alloy H19 Temper and Coil Coated.
Application: Coil Coated Beer/Beverage End Stock for Wide Shell Press.
================================================================================
Primary (Fixed) Specifications:
1. Tolerances:
a) Gauge: +/-0.0002"
b) Coil Width: -0", +1/8"
c) Edge Xxxx: 0.002" maximum
d) Camber: 0.015" maximum in 30", 0.250" maximum in 10 ft.
e) Flatness: 1/8" maximum height for cycles up to 18" long.
f) Edge Wave: Any cycle less than 5" is unacceptable.
g) Crossbow: A rise exceeding 0.125" is unacceptable.
2. Mechanical Properties (After Coil Coating):
a) Yield Strength: 47-52 ksi*
b) Elongation in 2": 6% minimum
*Yield strength when measured at 45(degree) to rolling direction.
3. Chemical Composition (% maximum unless shown otherwise):
0.20 Si, 0.35 Fe, 0.15 Cu, 0.20-0.50 Mn, 4.00-5.00 Mg, 0.10 Cr, 0.25 Zn,
0.10 Ti, 0.0001 Be, others 0.05 each and 0.15 total, balance A1.
================================================================================
Secondary (Variable) Specifications:
1. Coil coated aluminum beer/beverage end stock is supplied, cleaned and
chemically treated with chromate- phosphate treatment at a weight of 4-9
mg/ft.2/side or titanium based treatment prior to coil coating.
2. Organic coatings should be as follows (including qualified equivalents
with same dried film):
Application/Color Exterior Coat (mg/4 in.2) Interior Coat (mg/4 in.2)
Beverage Clear X X0000-000 @ 0, -0, x0 X S9835-007 @ 32, -3, +6
V S6839-020 @ 8, -2, +4 D 8800-A04M @ 32, -3, +6
Coke Gold V 90X043 @ 8, -2, +4 X X0000-000 @ 00, -0, x0
X S6839-535 @ 8, -2, +4 D 8800-A04M @ 32, -3, +6
Pepsi Gold V S9835-512 @ 8, -2, +4 X X0000-000 @ 00, -0, x0
X S9829-521 @ 8, -2, +4 D 8800-A04M @ 32, -3, +6
7-Up Gold V 85X005 @ 8, -2, +4 D 8800-A04M @ 32, -3, +6
================================================================================
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
NUMBER: RD/S-88-013A Page 2 of 2
DATE: 09/23/88
REVISED: 01/02/93
EXHIBIT A-2-a
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
Final After Signature Approvals
================================================================================
Secondary (Variable) Specifications: (Continued)
Application/Color Exterior Coat (mg/4 in.2) Interior Coat (mg/4 in.2)
Beer Clear V S9835-007 @ 8, -2, +4 X X0000-000 @ 0, -0, x0
X S6839-020 @ 8, -2, +4 V S6839-020 @ 8, -2, +4
P (E) Coat @ 8, -2, +4 P (E) Coat @ 8, -2, +4
Xxxxxxxx Gold V 90X044 @ 8, -2, +4 X X0000-000 @ 0, -0, x0
X 85X005 @ 8, -2, +4 X X0000-000 @ 0, -0, x0
Xxxxxx Gold V S9835-512 @ 8, -2, +4 X X0000-000 @ 0, -0, x0
X S9429-521 @ 8, -2, +4 X X0000-000 @ 0, -0, x0
Xxxxx Gold X X0000-000 @ 0, -0, x0 X S9835-007 @ 8, -2, +4
X X0000-000 @ 0, -0, x0 X S6839-020 @ 0, -0, x0
Xxxxxxx Xxxx X X0000-000 @ 10, -2, +4 X X0000-000 @ 0, -0, x0
X S9429-521 @ 10, -2, +4 X X0000-000 @ 0, -0, x0
XX Gold P (E) Coat @ 0, -0, x0 X (X) Xxxx @ 0, -0, x0
Xxxx: V = Valspar; D = Dexter; P = PPG
3. Exterior Lubricant:
Petrolatum at 10 +/- 5 mg/ft.2/side for pigmented gold
coatings only. Petrolatum at 6 +/- 3 mg/ft.2/side for all
others.
================================================================================
================================================================================
Remarks:
1. Presence of oxides, inclusions, large carbides, laminations, slivers,
rolled-over scratches or gouges, rolled- in defects, abrasions, pinholes
and stains, etc., may be cause for rejection.
2. Material must be able to be fed into shell press, formed into basic ends
and converted into finished ends without fracturing.
3. ASTM B557 and E8 apply.
================================================================================
================================================================================
Approvals (As Applicable)
================================================================================
READ XXXX MFOP MTMG
================================================================================
By /s/Illegible By /s/Illegible By /s/Illegible By /s/Illegible
Date 12/21/92 Date 1/4/93 Date 12/19/92 Date 1/6/93
================================================================================
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
NUMBER: RD/S-88-012A Page 1 of 1
DATE: 09/23/88
REVISED: 01/02/93
EXHIBIT A-2-b
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
Final After Signature Approvals
================================================================================
Material Identification (Name, Code, Mfgr. Etc.)
Aluminum: 5182 Alloy H19 Temper. Application: Plain Beer/Beverage End
Stock for Coil or Sheet
Coating.
================================================================================
Primary (Fixed) Specifications:
1. Tolerances:
a) Gauge: +/-0.0002"
b) Coil Width: -0.000", +0.125"
c) Edge Xxxx: 0.002" maximum
d) Camber: 0.015" maximum in 30", 0.250" maximum in 10 ft.
e) Flatness: 1/8" maximum height for cycles up to 18" long.
f) Edge Wave: Any cycle less than 5" is unacceptable.
g) Crossbow: A rise exceeding 1/8" is unacceptable.
2. Mechanical Properties (After 10 Minutes at 360(degree)F):):
a) Yield Strength: 47-52 ksi*
b) Elongation in 2": 6% minimum
*Yield strength when measured at 45(degree) to rolling direction.
3. Chemical Composition (% maximum unless shown otherwise):
0.20 Si, 0.35 Fe, 0.15 Cu, 0.20-0.50 Mn, 4.0-5.00 Mg, 0.10 Cr, 0.25 Zn,
0.10 Ti, 0.0001 Be, others 0.05 each and 0.15 total, balance A1.
================================================================================
Secondary (Variable) Specifications:
Plain aluminum beverage end stock is supplied, cleaned, chemically treated with
A272A or equivalent chromate- phosphate treatment at a weight of 3-9
mg/ft.2/side and is DOS reoiled at 0.9+/-0.3 mg/ft.2/side.
Remarks:
1. Presence of oxides, inclusions, slivers, rolled-over scratches, rolled-in
dirt, abrasions, pinholes and stains may be cause for rejection.
2. Material must be able to be formed into basic ends and converted into
finished ends without fracturing, otherwise it will be subject to
rejection.
3. ASTM B557 and E8 apply.
================================================================================
Approvals (As Applicable)
================================================================================
READ XXXX MFOP MTMG
================================================================================
By /s/Illegible By /s/Illegible By /s/Illegible By /s/Illegible
Date 12/21/92 Date 1/4/93 Date 12/17/92 Date 1/4/93
================================================================================
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Exhibit A-3
ANC standards and specifications for tab-stock
Exhibit A-3-a: 5042 Alloy H19 Temper (1 page, attached)
Exhibit A-3-b: 5082 Alloy H19 and H251 Temper (1 page, attached)
Exhibit A-3-c: 5182 Alloy H19 Temper (2 pages, attached)
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
NUMBER: RD/S-88-001A Page 1 of 1
DATE: 09/23/88
REVISED: 01/02/93
EXHIBIT A-3-a
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
Final After Signature Approvals
================================================================================
Material Identification (Name, Code, Mfgr, Etc.)
Aluminum: 5042 Alloy H19 Temper.
Application: Plain Tab Stock for Beverage Ends.
================================================================================
Primary (Fixed) Specifications:
1. Tolerances:
a) Gauge: +/-0.0003 for 0.0140" and lower gauges
-0.0003", +0.0004" for gauges over 0.0140"
b) Coil Width: +/-0.007"
c) Edge Xxxx: 0.002" maximum
d) Camber: 0.050" maximum in 30", 0.250" maximum in 10 ft.
2. Mechanical Properties (As-Received) H19 Temper:
Yield Strength: 44-52 ksi
Tensile Strength: 48-58 ksi
Elongation in 2": 2% minimum
3. Chemical Composition (% maximum unless shown otherwise):
0.20 Si, 0.35 Fe, 0.15 Cu, 0.20-0.50 Mn, 3.0-4.0 Mg, 0.10 Cr, 0.25 Zn,
0.10 Ti, 0.0001 Be, others 0.05 each and 0.15 total, balance A1.
================================================================================
Secondary (Variable) Specifications:
1. Plain aluminum tab stock is supplied cleaned of residual rolling oils and
other soils and is DOS reoiled at 0.8 +/- 0.4 mg/ft.2/side.
================================================================================
Remarks:
1. Presence of oxides, inclusions, laminations, slivers, rolled-over
scratches, rolled-in dirt, abrasions, pinholes and stains may be cause for
rejection.
2. ASTM B557 and E8 apply.
================================================================================
Approvals (As Applicable)
================================================================================
READ XXXX MFOP MTMG
================================================================================
By /s/Illegible By /s/Illegible By /s/Illegible By /s/Illegible
Date 12/21/92 Date 1/4/93 Date 12/17/92 Date 1/4/93
================================================================================
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
NUMBER: RD/S-88-002A Page 1 of 1
DATE: 09/23/88
REVISED: 01/02/93
EXHIBIT A-3-b
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
Final After Signature Approvals
================================================================================
Material Identification (Name, Code, Mfgr, Etc.)
Aluminum: 5082 Alloy H19 Temper and H251 Temper.
Application: Plain Tab Stock for Beverage Ends.
================================================================================
Primary (Fixed) Specifications:
1. Tolerances:
a) Gauge: +/-0.0003" for 0.0140" and lower gauges
-0.0003", +0.0004" for gauges over 0.0140"
b) Coil Width: +/-0.007"
c) Edge Xxxx: 0.002" maximum
d) Camber: 0.050" maximum in 30", 0.250" maximum in 10 ft.
2. Mechanical Properties (As-Received) H19 Temper: H251 Temper
----------- -----------
a) Yield Strength: 48-58 ksi 29-37 ksi
b) Tensile Strength: 52-62 ksi 42-50 ksi
c) Elongation in 2": 2% minimum 10% minimum
3. Chemical Composition (% maximum unless shown otherwise):
0.20 Si, 0.35 Fe, 0.15 Cu, 0.15 Mn, 4.0-5.0 Mg, 0.15 Cr, 0.25 Zn, 0.10 Ti,
0.0001 Be, others 0.05 each and 0.15 total, balance A1.
================================================================================
Secondary (Variable) Specifications:
1. Plain aluminum tab stock is supplied cleaned of residual rolling oils and
other soils and is DOS reoiled at 0.8 +/- 0.4 mg/ft.2/side.
================================================================================
Remarks:
1. Presence of oxides, inclusions, laminations, slivers, rolled-over
scratches, rolled-in dirt, abrasions, pinholes and stains may be cause for
rejection.
2. ASTM B557 and E8 apply.
================================================================================
Approvals (As Applicable)
================================================================================
READ XXXX MFOP MTMG
================================================================================
By /s/Illegible By /s/Illegible By /s/Illegible By /s/Illegible
Date 12/21/92 Date 1/4/93 Date 12/17/92 Date 1/3/93
================================================================================
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
NUMBER: RD/S-93-015A (Page 1 of 2)
DATE: 06/14/93
REVISED:
EXHIBIT A-3-c
AMERICAN NATIONAL CAN
MATERIAL SPECIFICATION SHEET
Final After Signature Approvals
================================================================================
Material Identification (Name, Code, Mfgr, Etc.)
Aluminum: 5182 Alloy H19 Temper. USA
Application: CAT99 Tab Stock for Beverage and Beer Ends.
================================================================================
Primary (Fixed) Specifications:
1. Tolerances (inch):
a) Gauge: +/-0.0003
b) Coil Width: +/-0.007"
c) Edge Xxxx: 0.002 maximum
d) Camber: 0.050 maximum in 30"
0.250 maximum in 10 ft.
2. Mechanical Properties (As-Received):
H19 Temper: Yield Strength: 49-55.5 ksi
Tensile Strength: 55-62 ksi
Elongation in 2": 5% minimum
3. Chemical Composition (% maximum unless shown otherwise):
0.20 Si, 0.35 Fe, 0.15 Cu, 0.20-0.50 Mn, 4.0-5.0 Mg, 0.10 Cr, 0.25 Zn,
0.10 Ti, 0.0001 Be, others 0.05 each and 0.15 total, balance A1.
================================================================================
Secondary (Variable) Specifications:
1. Plain aluminum tab stock is supplied cleaned of residual rolling oils and
other soils and is DOS reoiled at 0.8+/-0.4 mg/ft.2/side.
================================================================================
Amendments:
Alcoa C232-H3E30 is an acceptable replacement for 5182-H19 (in the H3E30 temper
only).
================================================================================
Remarks:
1. Presence of oxides, inclusions, laminations, slivers, rolled-over
scratches, rolled-in dirt, abrasions, pinholes and stains may be cause for
rejection.
2. ASTM B557 and E8 apply.
================================================================================
Approvals (As Applicable)
================================================================================
BTEC XXXX MFOP MTMG
================================================================================
/s/Illegible /s/Illegible /s/Illegible /s/Illegible
Signature Signature Signature Signature
Date 7/1/93 Date 9/1/93 Date 8/12/93 Date 7/1/93
================================================================================
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Exhibit B: list of 1995 ANC's ship-to locations
CHICAGO, IL
MEMPHIS, XX
XxXXXXXX, CO
BIRMINGHAM, AL
St. LOUIS, MO
VALPARAISO, IN
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Exhibit C: ALCOA's specifications for each type of metal unit
used for toll conversion into can-stock
INGOT (P1020A)
Chemical composition:
element element
Al less than 99.7% Ga less than 0.04%
Si less than 0.10% As less than 0.0050%
Fe less than 0.20% Na less than 0.004%
Be less than 0.0001% Va less than 0.03%
Zn less than 0.010% Li less than 0.0001%
Pb less than 0.0015%
Cd less than 0.0003% others (each) less than or equal to 0.03%
Hg less than 0.0001% others (total) less than or equal to 0.10%
Aspect ratio:
P1020A ingot in sow or tee form shall have an aspect ratio (ratio of second
smallest dimension divided by smallest dimension) of not less than 3.
SCRAP
Attached (7 pages)
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Aluminum Company of America EFFECTIVE 1993-01-01
Rigid Container Sheet Scrap SUPERSEDES PREVIOUS PAGE DATED 1986-01-01
SELF-GENERATED SCRAP - SECTION RPD941C
TABLE OF CONTENTS
Page
SCRAP - SELF GENERATED
General Information......................................................3
Packing...............................................................3, 4
Loading - Rail...........................................................5
Loading - Truck..........................................................6
Shipment Notice, Manifest and Xxxx of Lading..........................7, 8
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Aluminum Company of America EFFECTIVE 1993-01-01
Rigid Container Sheet Scrap SUPERSEDES PREVIOUS PAGE DATED 1986-01-01
SELF-GENERATED SCRAP - SECTION RPD941C
SELF-GENERATED SCRAP
GENERAL
The customer must contact the ALCOA Knoxville Office (000) 000-0000 to
obtain approval to return scrap. Scrap must be commercially free of dirt, iron,
and other contaminants. Material should be stored indoors and free of moisture.
Lead levels in excess of .0100 as an alloy constituent are not acceptable.
Freight charges and all other charges regarding rejected scrap will be for the
account of the customer.
SCRAP LOADING AND PACKING
METHOD OF PREPARATION
Acceptable methods of preparation are:
Class I (3000)............Briquetted Only
Class II (5000)...........Briquetted or Baled
Class III (3000)..........Briquetted or Baled
Class IV (5000)...........Xxxxxxx boxes or loose
Max. of up to 20% when
mixed with Class II
Sheet Scrap...............Strapped to skids
No fibre cartons, fibre or metal drums or metal or wood boxes are to be
used as packages. Under no circumstances should surplus skids be returned in any
load. 5000 series alloys may be mixed in a given package. Class 2 & 4 may be
shipped in the same railcar/trailer providing classes are segregated. All other
classes must be segregated and returned separately.
XXXXX
Xxxxx must separate into sections when banding or wire is cut. Material
must be banded with 6 minimum to 10 maximum 3/4 in. x .030 in.
(5056-H36) aluminum or 5/8 in. x .020 in. steel or 6 minimum to 10
maximum 10-gauge (5056-0) aluminum or 13-gauge steel. Bands or wires of
other material are not acceptable. Use of support sheets of any
material is not acceptable. Skids should not be used. Xxxxx uniform in
size are preferred. Composite xxxxx of two or more individual xxxxx
banded together to meet size specifications are not acceptable (see
Figure 1).
Class 2 (5000 Series): The density of xxxxx should not exceed 40 pounds
per cubic foot. Minimum bale size is 30 cubic feet. Acceptable range
dimensions are 24 to 36 in. x 30 to 48 in. x 40 to 72 in.
Class 3 (3000 Series): The density of xxxxx should not exceed 40 pounds
per cubic foot. Minimum bale size is 30 cubic feet. Acceptable range
dimensions are 24 to 40 in. x 30 to 52 in. x 40 to 72 in.
BRIQUETTES
The density of hydraulic briquettes should be a minimum of 50 pounds
per cubic foot. Briquettes uniform in size are preferred. Optimum
dimensions are 12 in. x 12 in. x 12 in. A minimum of two steel straps
parallel to runners and under deckboards, two steel straps
perpendicular to runners and under deckboards and one horizontal strap
per layer must be used. All steel straps must be a minimum of 5/8 in. x
.020 in. or aluminum straps 3/4 in. x .030 in. (5052-H36). Bands of
other materials are not acceptable. The maximum metal stack height is
48 in., and the briquettes must not overhang the pallet. Briquettes
should not have aluminum flat sheet or any other support material
between briquette layers or between bottom layer of briquettes and skid
(see Figure 2).
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Aluminum Company of America EFFECTIVE 1993-01-01
Rigid Container Sheet Scrap SUPERSEDES PREVIOUS PAGE DATED 1986-01-01
SELF-GENERATED SCRAP - SECTION RPD941C
Self-Generated Scrap
SCRAP LOADING AND PACKING DATA
METHOD OF PREPARATION
SHEET SCRAP
Material should be packed on skids. Minimum weight per skid is 1,500
pounds and maximum weight per skid is 6,000 pounds. Sheet scrap should
be secured with not less than 3/4 in. x .025 in. steel straps or 4 3/4
in. x .030 in. aluminum straps (see Figures 3 and 4). (Extra straps may
be required to prevent metal stacks from shifting during transit).
LOOSE
Only spoiled compound ends (Class 4) and tab skeletons and particles
(Class 2) should be loaded loose or in Xxxxxxx boxes. A maximum of up
to 20% loose scrap may be returned with briquettes or xxxxx.
[PICTURE] [PICTURE]
Figure 1, Bale Figure 2, Skid of
Briquettes
[PICTURE] [PICTURE]
Figure 3, Skid of Coiled Figure 4, Skid of Flat Sheet
Sheet Scrap Scrap
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Aluminum Company of America EFFECTIVE 1993-01-01
Rigid Container Sheet Scrap SUPERSEDES PREVIOUS PAGE DATED 1986-01-01
SELF-GENERATED SCRAP - SECTION RPD941C
Self-Generated Scrap
SCRAP LOADING AND PACKING DATA
LOADING PROCEDURES - RAIL
Scrap is to be loaded to at least 60,000 pounds minimum per car. Cars
assigned or stenciled for return to a specific ALCOA plant should not be used.
All scrap returned by rail must be loaded in railcars having minimum 10 foot
wide doors and minimum height of 9 foot 6 inches. Railcars with double doors are
preferred. Interior equipment, such as gates or other bracing components, if not
being used to restrain the lading, must be stored in the ends of the car.
Nothing should be piled against the doors which inhibits door opening.
Facilities do not permit prior selection of the side to be unloaded; therefore,
the railcar lading must be easily accessible from either side. Shipper should
assure that any railcar being loaded is clean, in good shape, and free of holes
in the floor which could jeopardize unloading operations.
XXXXX
Loading throughout the car must be such that the long horizontal
dimension is presented to unloading equipment, i.e., long dimension
must be perpendicular to the forks of an approaching truck. Material
should be loaded to prevent shifting in transit. To facilitate
unloading, xxxxx should not be jammed against the roof, sides or doors.
There should be a minimum clearance of 1 foot (see Figure 5).
BRIQUETTES
Skids in the ends of the car are loaded with runners parallel to the
sides of the car. Skids loaded in the doorway are loaded with runners
perpendicular to the sides of the car. Two-high stacking of briquettes
is acceptable if the pallets are uniform in size (consistent height and
width dimensions) and loaded solid from end to end with fixed bracing
to fill any center void. Stacking three skids or more is not
acceptable. All loads must be sufficiently braced for delivery of
entire pallets. Do not load loose or partial unrestrained pallets (see
Figure 6).
LOOSE SCRAP
If necessary to load 60,000 pounds in a car, loose scrap is permitted
in the doorway providing the car contains only loose scrap. Both
doorways must be protected with grain doors. Compounded ends are to be
segregated and loaded in one end of the car. Cars containing loose
scrap are preferred with the doorway area free of scrap (see Figure 7).
MIXED LOADS
Cars that are loaded with more than one class of baled and briquetted
scrap are subject to ALCOA approval. Contact the ALCOA Knoxville Office
for instructions. Loose scrap is to be loaded in either end or both
ends of the car and xxxxx, or palletized briquettes are to be used to
hold loose scrap in place. Loads must be braced so as to prevent
package from being broken apart and to keep loose scrap from the
doorway area (see Figure 8).
[PICTURE] [PICTURE]
Figure 5, Xxxxx Figure 6, Briquetted
Loaded Solid for Length of Car Skidded
[PICTURE] [PICTURE]
Figure 7, Loose Scrap Figure 8, Mixed Car of Baled
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Aluminum Company of America EFFECTIVE 1993-01-01
Rigid Container Sheet Scrap SUPERSEDES PREVIOUS PAGE DATED 1986-01-01
SELF-GENERATED SCRAP - SECTION RPD941C
Self-Generated Scrap
SCRAP LOADING AND PACKING DATA
LOADING PROCEDURES - TRUCK
All scrap shipments by truck must meet the same size, quality, density,
and contaminant standards as rail shipments. Minimum shipments of Class 1, 2, or
3 via truck is 40,000 pounds. All trailers used for scrap returns must have
sliding tandems, swing out doors (no roll up doors) and be of van type (no drop
deck or moving van trailers) or flatbed side-loaded. Trailers should be loaded
to allow at least 4 inches of clearance between the xxxxx and the sides of the
trailer and 12 inches of clearance between the xxxxx and rear door and roof.
Nothing should be piled against the doors which prohibits the opening of them.
ALCOA reserves the right to refuse shipments which are not loaded properly or do
not meet specifications. Shipper should assure that any truck being loaded is
clean, in good shape, and free of holes in the floor which could jeopardize
unloading operations.
XXXXX
Stack xxxxx placing xxxxx one atop the other so that the maximum amount
(100% if possible) rests on their largest face. Do not load xxxxx on
end or on edge. A bale resting on its largest face is in a position of
maximum stability. Material should be loaded to prevent shifting in
transit (see Figure 9).
BRIQUETTES
Skids are to be loaded with the runners parallel to the side of the
trailers. Briquettes should not be double stacked. Briquettes should be
loaded either single or double wide from nose of trailer to end of
trailer. All loads must be sufficiently braced. Do not load loose,
partial, or unrestrained pallets. If the shipment is loaded down the
middle of the trailer, the pallets must be blocked and/or braced to
avoid shifting while in transit (see Figure 10).
[PICTURE] [PICTURE]
Figure 9, Bale Truckloaded Figure 10, Briquettes Truckloaded
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Aluminum Company of America EFFECTIVE 1993-01-01
Rigid Container Sheet Scrap SUPERSEDES PREVIOUS PAGE DATED 1986-01-01
SELF-GENERATED SCRAP - SECTION RPD941C
Self-Generated Scrap
SCRAP LOADING AND PACKING DATA
RAIL/TRUCK
SHIPMENT NOTICE, MANIFEST AND XXXX OF LADING
SHIPMENT NOTICE
At the time of shipment, the customer is to phone (000) 000-0000 or fax
(000) 000-0000 "ship to" location and furnish the following information
to ALCOA Knoxville Office:
A. Railcar/trailer number E. Seal number used on railcar/trailer
B. Date shipped F. Estimated aluminum weight
C. Type of scrap G. Weight of dunnage
D. Number of xxxxx/briquettes H. Shipping location
NOTE: Seals will be inspected at the ALCOA locations or
designated ALCOA agent locations and will be placed
on a "hold" status in the result of a discrepancy or
broken seal. The shipment will remain on "hold" until
approval is obtained from customer to unload.
MANIFEST
The information shown above for the shipment notice is to be shown on a
shipment manifest which should be taped to the inside of the door. In
addition, the manifest should include ALCOA SPT number.
XXXX OF LADING
The xxxx of lading for shipment is to be completed as shown in Figure 11
and Figure 12 (See attached). Note that:
A. The ALCOA SPT number is to be included on the "consigned to" line.
B. The "Description of Articles" is to indicate "Scrap Aluminum,
for Remelting Purposes Only."
C. Indicate actual scale weight or an estimated weight, which must be
marked "Estimated."
D. Duplicate xxxx of lading is required at receiving location.
CERTIFICATION
The following "certification" is to be applied to the xxxx of lading
and MUST BE SIGNED BY THE CONSIGNOR OR HIS AGENT:
"This shipment is being transported for the purposes of RECYCLING as
defined in applicable tariffs containing such provisions."
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Aluminum Company of America EFFECTIVE 1993-01-01
Rigid Container Sheet Scrap SUPERSEDES PREVIOUS PAGE DATED 1986-01-01
SELF-GENERATED SCRAP - SECTION RPD941C
Self-Generated Scrap
SCRAP LOADING AND PACKING DATA
[PICTURE]
SAMPLE XXXX OF LADING - RAIL
Figure 11
[PICTURE]
SAMPLE XXXX OF LADING - TRUCK
Figure 12
Shipper will be given specific routing information by Scrap Central and must
adhere to those instructions.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Exhibit D: List of ANC's current beverage can manufacturing
facilities in North America as of January 1st, 1994
can plants number of lines can sizes
Bishopville, SC 3 12oz.
Brunswick, NJ 2 12oz.
Chatsworth, CA 3 12oz.
Chicago, IL 2 12oz.
Xxxxxxx, XX 0 12oz.
Fairfield, CA 2 12oz.
Forest Park, GA 2 12oz.
Fremont, OH 3 12oz.
Gateway, MO 4 12oz., 16oz.
Houston, TX 2 10oz., 12oz., 16oz.
Xxxxxxxxxxxx, XX 0 12oz.
Xxxx, XX 0 12oz.
Longview, TX 4 10oz., 12oz.
Memphis, TE 3 12oz.
Oklahoma City, OK 2 12oz.
Phoenix, AZ 3 12oz.
Piscataway, NJ 3 12oz.
Puerto Rico 1 10oz., 12oz.
St. Xxxx, MN 3 12oz.
Whitehouse, OH 3 12oz., 24oz.
Winston-Salem, NC 6 12oz., 14oz., 16oz.
end plants modules sizes
Xxxxxxxxxx, XX 0 o202, o204, o206, o209
St. Louis, MO 2 o206
San Leandro, CA 1 o202, o206
Valparaiso, IN 4 o206
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Exhibit E: Disqualification procedure
Procedure for disqualification of an aluminum supplier ("Supplier")
Disqualification by ANC of a supplier at any ANC location may occur under the
following circumstances:
1/Criteria:
1.1/As a result of mutually agreed metal defects, for a 5 day period, can
structure and appearance (i.e., split flanges, pin holes, low buckles, loopers,
streakers, etc ... ) directly attributed to metal defects exceed current ANC
qualifications limits, as set forth in table below:
Cupper performance cupperjam less than l per coil acceptable
(confirmed coil related) >1 per coil unacceptable
Bodymaker performance tearoffs less than l per 300,000 cans acceptable
(confirmed coil related) >1 per 300,000 cans unacceptable
Can integrity cracked flanges (confirmed coil less than l per 300,000 cans acceptable
related) >1 per 300,000 cans unacceptable
Pinholes basecoated cans less than l per 1,000,000 cans acceptable
(confirmed coil related) >1 per 1,000,000 cans unacceptable
non basecoated cans less than l per 300,000 cans acceptable
>1 per 300,000 cans unacceptable
Buckle strength minimum 90 lb.
Dome growth at 90 PSIG maximum 0.064 inches
Column strength minimum 250 lb.
Can appearance xxxxxx lines, scratches, draw marks, and any other surface defect attributable
to metal can be cause for rejection
Measurements and evaluations will be performed by qualified ANC personnel, in
accordance with ANC qualification trial procedures.
1.2/As a result of mutually agreed metal defects, for a 30-day period,
production efficiency is less than 98% of the previous 30-day average of the
efficiency obtained with metal from the same or another supplier.
1.3/Total spoilage, directly attributable to metal, for a 30-day period, exceeds
the previous 30-day average by 1 percent or more.
1.4/Metal related HFI (hold for inspection), for a 30-day period, exceed the
metal total monthly usage (number of coils) by 3 percent or more.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
1.5/Tooling usage, directly attributable to metal, for a 30-day period, exceeds
the previous 30-day history by 5 percent or more.
1.6/A disruption in the plant operations occurs, which is directly attributable
to defective metal deliveries or service.
2/Procedure: if a supplier's metal performance violates any four of the above
six criteria, the plant to which the metal is being supplied may request of ANC
management that a disqualification proceeding be initiated by ANC.
If ANC decides to proceed with such a disqualification proceeding, the supplier
will then be advised of its poor performance and an immediate corrective action
will be requested. This corrective action plan will be promptly forwarded by the
supplier to ANC. It will then be implemented promptly by the supplier, who must
then demonstrate improvement within a 45-day period.
At the end of the 45-day period, if little or no improvement has been observed,
ANC may decide to disqualify the supplier at the plant in question.
In the event of a catastrophic problem, ANC shall have the right to immediately
suspend the supplier, as an aluminum can-stock supplier at that plant. If it is
determined that the supplier metal was the cause of the catastrophic problem,
the supplier may be disqualified at that location.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Exhibit F: Letter from ANC to ALCOA giving certain
indications in relationship with potential volumes
and mix allocation for years 1996 and 1997.
Attached (1 page)
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
American National Can Pechiney Group
--------------------------------------------------------------------------------
CHICAGO, December 13, 1994
Xxx Xxxxxxx
Xx. Vice President - Purchasing
Xx. Xxxxxx X.XXXXX
ALUMINUM COMPANY of AMERICA
Rigid Packaging Division
1100 Riverview Tower
000 Xxxxx Xxx Xxxxxx
XXXXXXXXX, XX 00000
Dear Xxx,
This letter is intended to clarify certain points discussed during our 12/13/94
meeting in CHICAGO in relationship with the ANC - ALCOA multi-year agreement.
Estimated volume for year 1996 should be 300 million pounds, and estimated
volume for year 1997 should be 350 million pounds. Those volume are indicative,
and for production capacity reservation only. The actual volumes will be derived
from ANC's contractual commitment of 25% of ANC's on-going total requirements of
aluminum can-stock in North America for year 1996, and 30% of ANC's on-going
total requirements of aluminum can-stock in North America for year 1997,
on-going total requirements being defined in the agreement. However, should the
actual volume exceed 330 million pounds in 1996, or 385 million pounds in 1997,
ANC agrees to meet with ALCOA as soon as this situation is known, in order to
find an acceptable solution for both parties.
As mentioned in the agreement, mix allocation for year 1995 is 75 million pounds
of body-stock and 65 million pounds of coated end-stock. As an indication,
requirements of coated end-stock for year 1996 and 1997 should range between 65
and 90 million pounds.
Best regards,
Xxx XXXXXXX
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
Xx. Xxxx Xxxxxxx
08 January 1997
Page 2
Aluminum Company of America ALCOA
--------------------------------------------------------------------------------
08 January 1997
Xx. Xxxx Xxxxxxx
Vice President, Purchasing
American National Can Corporation
0000 Xxxx Xxxx Xxxx, X/X 0X
Xxxxxxx, Xxxxxxxx 00000
Dear Xxxx,
In light of the flurry of recent discussions, it seems advisable to confirm our
agreements on ANC's 1997 Class I scrap toll requirements under the Aluminum
Purchase Agreement between Aluminum Company of America ("Alcoa") and American
National Can Company ("ANC") dated January 10, 1995, as amended by our letter
agreement dated February 1, 1996 (as amended, the "Agreement"), (unless
otherwise indicated, capitalized terms used in this letter have the meanings
specified in the Agreement) and other matters. They are:
1. Alcoa agrees to waive ANC's Class I scrap toll obligation for the
first quarter of 1997 of 11 million pounds.
2. ANC agrees to toll [*] million pounds of P1020 with Alcoa during the
first quarter of 1997 for tolling fee of [*] (.0112" gauge).
3. ANC agrees to toll [*] million pounds of Class I Scrap with Alcoa
spread over the second, third, and fourth quarters of 1997 (level loaded) for a
tolling fee of [*] above published conversion prices (ANC pays transportation
fees).
4. ANC agrees to purchase from Alcoa [*] million pounds of tab-stock
during 1997 at published book pricing (Alcoa Price Data, September 15, 1995) and
the metal component per the Agreement. This quantity of tab-stock is part of
Alcoa's [*] share of ANC's total 1997 purchases, estimated to be [*] million
pounds, i.e. is not incremental business in 1997.
5. [*] or the termination of the time period for doing so, whichever
first occurs, ANC will provide Alcoa with notice of all the terms of the most
favorable offer for this volume, and Alcoa, within 20 working days, will then
notify ANC of its decision to match or to decline to match such offer.
Except as modified by this letter agreement, the terms and conditions of the
Agreement shall continue in full force and effect.
Xx. Xxxx Xxxxxxx
08 January 1997
Page 2
Please confirm ANC's agreement to the above by executing where indicated below
and returning one fully executed copy of this letter to me.
Sincerely,
ALUMINUM COMPANY OF AMERICA, AMERICAN NATIONAL CAN
Rigid Packaging Division COMPANY
By: /s/Xxxxxx Xxxxxxxxx By: /s/Xxxxxx Xxxxxxx
---------------------------- ----------------------------------------
President Senior Executive Vice President
Chief Operating Officer, Beverage Cans
Worldwide
Aluminum Company of America ALCOA
--------------------------------------------------------------------------------
6 January 1997
Xx. Xxxxxx X. Xxxxxxx
Chief Operating Officer
American National Can Company
0000 Xxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Ed:
In connection with the Aluminum Purchase Agreement between Aluminum Company of
America ("Alcoa") and American National Can Company ("ANC") dated January 10,
1995, as amended by our letter agreement dated February 1, 1996 (as amended, the
"Agreement"), (unless otherwise indicated, capitalized terms used in this letter
have the meanings specified in the Agreement), ANC has recently triggered
Alcoa's right of refusal with regard to the supply of a percentage of ANC's
on-going total annual can-stock purchases in North America during each of
calendar years 1998, 1999, and 2000.
ANC has been advised by Pepsi Cola Company ("COBO") not to make can-stock
purchase commitments in connection with its purchases from ANC. If COBO
hereafter decides to have ANC purchase the can-stock requirements for its
purchases from ANC, these requirements shall be subject to Alcoa's first right
of refusal under the Agreement, and ANC and Alcoa shall promptly meet thereon.
Alcoa's share of the COBO can-stock requirements is approximately 40 million
pounds. ANC further advises Alcoa that it is currently unaware of any other ANC
customer volume that is subject to be purchased directly by any of ANC's
customers during the period in question, i.e., calendar years 1998, 1999, and
2000.
Alcoa will be supplying, in the aggregate, thirty percent (30%) of ANC's
presently available on-going can-stock purchase requirements for North America,
during calendar years 1998, 1999 and 2000. Alcoa is willing to commit to supply
an amount of can-stock (the "Ceiling Volume") during calendar years 1998, 1999,
2000 on the terms set forth in the Attachment hereto (the "Attachment"). The
Ceiling Volume will be calculated as follows:
Ceiling Volume equals the difference between (i) thirty percent (30%)
of [ANC's total on-going can-stock purchase requirements for North
America for the year in question less the COBO volume as discussed
above] and (ii) 100 million pounds (firm volume commitment) which will
be supplied to ANC under the terms of the Agreement and the Letter
Agreement between ANC and Alcoa dated September 5, 1996.
Xx. Xxxxxx X. Xxxxxxx
6 January, 1997
Page 2
example:
Ceiling Volume = [0.30 x (ANC Total Purchases - COBO Volume)] - 100 MM lb.
ANC shall specify the Ceiling Volume (in millions of pounds) by January 10, 1997
for deliveries in each of 1998, 1999 and 2000, which Alcoa will then use to
determine appropriate metal hedging positions. If ANC's can-stock purchases
during any of the calendar years 1998, 1999, or 2000 are not equal to or greater
than 90% of this specified volume, ANC will pay Alcoa's associated costs for
option premiums on any shortage below 90% volume. Any reduction in ANC's
purchases from Alcoa during 1998, 1999, or 2000 shall be consistent in term and
proportion with reductions of ANC's purchases from it's other can-stock
suppliers. Further, if ANC purchases from Alcoa during any of the calendar years
1998, 1999, or 2000 exceed the 110% volume, the metal component price for that
incremental volume will be based on current market conditions at the time a firm
commitment for volume is made.
If the above reflects our agreement on the matters covered, please execute where
indicated below, and return one fully executed copy to me.
Sincerely,
ALUMINUM COMPANY OF AMERICA,
Rigid Packaging Division
By: /s/Xxxxxx X. Xxxxxxxxx
--------------------------
Xxxxxx X. Xxxxxxxxx
President
READ AND AGREED TO THIS 10TH DAY OF JANUARY, 1997
AMERICAN NATIONAL CAN COMPANY
By: /s/Xxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxx, Senior Executive
Vice President and Chief Operating
Officer, Beverage Cans Worldwide
ALCOA/ANC
1998, 1999, 2000 CEILING PRICING
o Base Midwest Metal Ceiling (Xx Xxxxx) at no cost to ANC
1998, 1999, 2000 Ceiling @ [*]
o Actual invoiced metal is the ceiling price, or when metal is below the
ceiling will be at the reference price for that period. The pricing periods
will be identical to those currently in force under the provisions of the
Alcoa/ANC amendment dated February 1, 1996 (i.e., September 1st to February
28th, for can sheet shipments April 1st to September 30th, and March 1st to
August 31st, for shipments October 1st to March 31st.). When at or above
the ceiling, actual invoiced metal will be at [*]
o Book Conversion pricing for ceiling priced material
.0114" Body Stock $.32/lb.
.0110" Soft Drink End Stock $.73/lb.
- Adjusted annually for 1/2 PPI starting, with 1998, based on 1997 vs.
1996 full year averages.
- Price for changes from reference specifications based on Alcoa's
published schedules dated 15 September 1995.
o This ceiling price offer is for the Ceiling Volume, which is the difference
between (i) thirty percent (30%) of [ANC's total on-going can-stock
purchase requirements for North America for the year in question less the
120 million pound COBO volume as discussed above] and (ii) 100 million
pounds (firm volume commitment) which will be supplied to ANC under the
terms of the Agreement and the Letter Agreement between ANC and Alcoa dated
September 5, 1996.
o ANC to specify the Ceiling Volume (in millions of pounds) by January 10,
1997 for deliveries in each of 1998, 1999, and 2000, which Alcoa will then
use to secure metal hedging positions. If ANC's can stock purchases during
any of the calendar years 1998, 1999, or 2000 are not equal to or greater
than ninety percent (90%) of this specified volume, ANC will pay Alcoa's
associated costs for option premiums on any shortage below the 90% volume.
If ANC's purchases from Alcoa during any of the calendar years 1998, 1999,
or 2000 exceed the one hundred ten percent (110%) volume, the metal
component price for that incremental volume will be based on current market
conditions at the time a firm commitment for volume is made.
o Mutually agreed upon ship-to locations.
o [*]
o Except as otherwise provided in this Attachment and the letter to which it
is attached, the terms and conditions of the Agreement shall apply.
SCRAP PURCHASE AGREEMENT
THIS SCRAP PURCHASE AGREEMENT is entered into as of the 10th day of
January, 1997 by and between AMERICAN NATIONAL CAN COMPANY, a Delaware
corporation ("ANC") and Rigid Packaging Division of ALUMINUM COMPANY OF AMERICA,
a Pennsylvania corporation ("Alcoa").
In consideration of mutual undertakings the parties agree as follows:
1. Quantity. ANC agrees to sell and Alcoa agrees to buy an amount of
"3004 can manufacturing plant generated scrap," commonly designated as Class I
scrap ("Class Scrap") equal to three and two tenths percent (3.2%) of ANC's
total annual can-stock purchases for use in North America during each calendar
year of the term of this Agreement; provided, however, that any amount of such
ANC purchases for Pepsi Cola Corporation which is not purchased from Alcoa, and
the quantity of can-stock supplied by Alcoa pursuant to the September 5, 1996
letter agreement between the parties, shall both be excluded from "ANC's total
annual can-stock purchases for use in North America" for purposes of this
Section 1.
2. Term. This Agreement shall become effective on January 1, 1998 and
shall remain in effect until December 31, 2000.
3. Price. The FOB customer can plant price per pound of Class Scrap
shall be[*]. The deductor shall be adjusted by one half (1/2) of the annual
change in the Producer Price Index beginning on January 1, 1998 as follows:
PURCHASE PERIOD: REFERENCE PERIOD:
Ql, 1998 March 1997 - August 1997
Q2/Q3, 1998 September 1997 - February 1998
Q4,1998 / Q1, 1999 March 1998 - August 1998
Q2/Q3, 1999 September 1998 - February 1999
Q4, 1999/Q1, 2000 March 1999 - August 1999
Q2/Q3,2000 September 1999 - February 2000
Q4, 2000 March 2000 - August 2000
2
4. Payment Terms. Payments shall be due net 30 days from receipt of
Class Scrap and shall be made on the first business day of each month.
5. Shipments. The projected annual quantity of Class Scrap to be
purchased hereunder shall be shipped in approximately equal monthly shipments.
6. Specifications. Class Scrap to be purchased hereunder shall conform
to Alcoa's Class I Specifications in effect at the time of shipment. In the
event that nonconforming Class Scrap is shipped by ANC, the parties shall seek
to agree to a revision of the purchase price, failing which ANC will, at its
sole expense, replace the nonconforming Class Scrap with conforming Class Scrap
at the Alcoa designated destination.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
ALUMINUM COMPANY OF AMERICA, AMERICAN NATIONAL CAN
Rigid Packaging Division COMPANY
By: /s/Xxxxxx Xxxxxxxxx By: /s/Xxxxxx Xxxxxxx
----------------------------- -----------------------------------------
Title: President Title: Senior Executive Vice President
and Chief Operating Officer,
Beverage Cans Worldwide
Aluminum Company of America ALCOA
--------------------------------------------------------------------------------
1996 September 5
Xx. Xxxxxx X. Xxxxxxx
Senior Vice President
Beverage Cans Americas
American National Can Corporation
0000 X. Xxxx Xxxx
Xxxxxxx XX 00000
Dear Xxxxxx:
In connection with the Aluminum Purchase Agreement between Aluminum Company of
America ("Alcoa") and American National Can Corporation ("ANC") dated January
10, 1995, as amended by our letter agreement dated February 1, 1996 (as amended,
the "Agreement"), ANC has recently triggered Alcoa's right of refusal with
regard to the supply of 100 million pounds of can-stock during each of calendar
years 1998, 1999 and 2000. ANC has asked Alcoa to agree to supply or to decline
to supply this quantity on the banded price basis set forth in the Attachment
hereto (the "Attachment"). (Unless otherwise indicated, capitalized terms used
in this letter have the meanings specified in the Agreement.)
Alcoa is willing to commit to supply 100 million pounds of can-stock to ANC in
each of calendar years 1998, 1999 and 2000 as part of its contract share of
ANC's on-going annual requirements on the banded price basis and other terms set
forth in the Attachment. ANC and its customer for which ANC is securing the
above quantity specifically understand that the metal price component of the
price for this quantity will be no less than the agreed minimum price set forth
on the Attachment of [*] per pound as adjusted per the Attachment regardless of
the market price of aluminum at the time of delivery or at any other time and/or
any other competitive conditions. Alcoa specifically understands that the metal
price component of the price for this same quantity will be no more than the
agreed maximum price of [*] per pound as set forth and adjusted per the
attachment regardless of the market price of aluminum at the time of delivery or
any other competitive conditions.
If you are willing to proceed on this basis, please execute where indicated
below. Ask your customer to execute the attached letter, and return one fully
executed copy of both to me.
Sincerely,
ALUMINUM COMPANY OF AMERICA,
Rigid Packaging Division
By: /s/Xxxxxx X. Xxxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxxx
President
READ AND AGREED TO THIS 9TH DAY OF SEPTEMBER, 1996
AMERICAN NATIONAL CAN CORPORATION
By: /s/Xxxxxx Xxxxxxx
----------------------------------
Xxxxxx Xxxxxxx
Title: Senior Vice President
Xx. Xxxxxx X. Xxxxxxx
1996 September 5
Page 2
Aluminum Company of America
Rigid Packaging Division
1100 Riverview Tower
000 Xxxxx Xxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx,
President
Gentlemen:
The undersigned entity hereby acknowledges and agrees to the conditions of the
Attachment and specifically understands that the metal price component for the
100 million pounds of aluminum can-stock which American National Can Corporation
("ANC") has contracted for with Aluminum Company of America ("Alcoa") for each
of calendar years 1998, 1999 and 2000 in connection with our purchase obligation
with ANC for those years shall not be less than [*] per pound as set forth and
adjusted per the Attachment agreed to by ANC and Alcoa, regardless of the market
price of aluminum at the time of delivery or at any other time or any other
competitive conditions. Alcoa specifically understands that the metal price
component of the price for this same quantity will be no more than the agreed
maximum price of [*] per pound as set forth and adjusted per the attachment
regardless of the market price of aluminum at the time of delivery or any other
competitive conditions.
--------------------------------
By:
--------------------------
Title:
--------------------------
Date:
--------------------------
--------------------------------
By: Xxxxxx X. Xxxxxxxxx
--------------------------
Title: President
--------------------------
Date:
--------------------------
Alcoa / ANC
1998, 1999, 2000 Banded Price
o Base Midwest Metal Band at no cost to ANC
1996 max [*]
min [*]
The band will be adjusted annually based on 1/2 the change in PPI over
the prior 12 months, i.e., January 1 through December 31, and
implemented on April 1st of the following year. (Index is the PPI for
intermediate materials as reported by the US Department of Labor -
March 1996 base is 124.9.)
o Actual invoiced metal is the maximum, the minimum or when metal is
within the band, at the referenced price for that pricing period. The
pricing period will be September 1st to February 28th, for can sheet
shipments April 1st to September 30th and March 1st to August 31st, for
can sheet shipments October 1st to March 31st.
o Conversion price for banded material
.0114" Bare $.32
.0110" Soft Drink End $.73
.0110" Tab (H19) $.633
- Price for changes from reference specifications based on Alcoa's
published schedules dated 15 September 1995
- Adjusted annually on April 1st based on 1/2 of the PPI average
12-month period from January 1 through December 1 of the prior year.
o Annual quantity-100 million pounds, fixed volume commitment
Volume is specifically dedicated to BACI (Beverage Associates
Cooperative, Inc.)
o Alcoa agreed upon ship-to locations
o [*]
o Other conditions per our Supply Agreement dated 10 January 1995.
American National Can PECHINEY GROUP
--------------------------------------------------------------------------------
February 1, 1996
Via Federal Express
Xx. Xxxxxx X. Xxxxxxxxx
President
Aluminum Company of America
Rigid Packaging Division
1100 Riverview Tower
000 Xxxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Dear Xxxxxx:
As a result of discussions we have had over the last four months, Aluminum
Company of America ("Alcoa") and American National Can Company ("ANC") have
agreed to clarify and amend the Aluminum Purchase Agreement between them dated
January 10, 1995 (the "Agreement") as set forth below. Unless otherwise defined,
terms defined in the Agreement shall have the same meanings herein.
1. ANC agrees to purchase and Alcoa agrees to supply (i) twenty-five
percent (25%) of ANC's on-going total purchases of aluminum can-stock in North
America during 1996, which are currently estimated to be approximately two
hundred fifty (250) million pounds; and (ii) thirty percent (30%) of ANC's
on-going total purchases of aluminum can-stock in North America during 1997,
which are currently estimated to be approximately two hundred ninety (290)
million pounds. The foregoing purchase commitments are exclusive of ANC's can
volume for Coors Brewing Company, ANC's currently existing plants in Mexico, and
twenty-four (24) ounce cans, all of which are subject to preexisting agreements
as of the date hereof. Any addition to ANC's on-going requirements or extensions
to these two purchase commitments will be treated per Section 3.3 of the
Agreement.
2. ANC accepts Alcoa's Two Year Ceiling Price Contract Pricing
Alternative Offer dated September 15, 1995 (the "Offer"), a copy of which is
attached hereto, for one hundred fifty (150) million pounds of aluminum
can-stock in 1996 and one hundred seventy (170) million pounds of aluminum
can-stock in 1997.
3. The quantities of aluminum can-stock to be purchased by ANC in 1996
and 1997 pursuant to the Offer shall be priced on the following basis
(quantities are in millions of pounds):
Xx. Xxxxxx X. Xxxxxxxxx
February 1, 1996
Page 2
TIER 1:
1996 1997
---- ----
150 170 Total volume included in Tier 1
9 12 Volume of Class I scrap to be tolled at the
conversion component contained in the Offer
141 158 Volume to be ceiling priced by Alcoa per the
Offer
TIER 2:
1996 1997
---- ----
100 120 Total volume included in Tier 2
12 32 Volume of Class I scrap to be tolled at the
conversion component contained in the Offer
88 88 Volume priced by Alcoa using the conversion
component and the Midwest spot average price
for metal for the pricing periods, both as outlined
in the Offer.
TIER 3:
1996 and 1997 Volumes Pricing
--------------------- -------
Remaining volume based on share and any Per existing Agreement pricing mechanisms
incremental contract volume above share. and contract provisions.
For 1996 and 1997, Tier 1 and Tier 2 volumes will be allocated proportionally on
a monthly basis.
4. ANC represents and warrants that it has or will secure metal hedging
positions of high grade aluminum in 1996 and 1997 to cover their Tier 2
positions. ANC has or will take such positions in its own name and as a
principal, not as an agent for any other party. Alcoa has no direct or indirect
interest in or liability with respect to such positions, and ANC shall make no
claims or demands, and shall indemnify and hold Alcoa harmless against any
claims or demands, arising from or in connection with such positions.
5. If ANC purchases less than one hundred fifty (150) million pounds
and/or less than one hundred seventy (170) million pounds of can-stock under
Tier 1 in 1996 and/or 1997,
Xx. Xxxxxx X. Xxxxxxxxx
February 1, 1996
Page 3
respectively, under the Agreement as amended hereby (the "Amended Agreement")
due to a decline in the beverage can market, ANC will pay Alcoa's actual hedging
costs, if any, associated with the shortage. For the purpose of calculating
ANC's maximum liability under this section only, these costs will not exceed
$0.05 per pound for either 1996 or 1997; provided, however, that ANC shall be
entitled to any Alcoa profit resulting under these circumstances from any actual
Alcoa hedge positions taken in the financial markets in connection with the
Offer during 1996 and/or 1997, as the case may be. Any reduction in ANC
purchases covered by this paragraph shall be consistent in term and proportion
with reductions of ANC's purchases from its other can stock suppliers, except
for one preexisting contract as of the date hereof , where ANC has committed to
purchase a specific volume from a particular supplier which represents less than
20 percent of ANC's total volume.
6. ANC will give due consideration to Alcoa's request to provide one
hundred percent (100%) of ANC/Coors E-Coat(R) end-stock requirements for use by
the Coors Brewing Company, which requirements currently approximate twenty-five
(25) million pounds annually. In consideration of such purchases, Alcoa shall
waive its [*] per pound slitting charge on shipments of E-Coat(R) beer end-stock
for use at Coors' Golden plant until its narrow presses are replaced with wide
presses tooled to run the maximum width of E-Coat(R) end-stock produced at
Alcoa's Xxxxxxx, Indiana facility. Once such narrow presses are replaced with
wide width capabilities, ANC shall continue to purchase its Coors E-Coat(R) end
stock volume from Alcoa for so long as Alcoa keeps ANC competitive with respect
to the direct cost inefficiencies resulting from ANC's use of E-Coat(R) material
which is "one-out" narrower than the press and tools are capable of running.
7. ANC will give due consideration to Alcoa's request to supply to
preferred ship-to locations and not to be disadvantaged as compared to other
suppliers of can-stock in this regard.
8. ANC grants to Alcoa a first right of refusal on thirty percent (30%)
of its total purchases of aluminum can-stock in North America for each of
calendar years 1998, 1999 and 2000 in accordance with the terms of the Offer.
This first right of refusal is exclusive of ANC's can volume purchases for Coors
Brewing Company, ANC's currently existing plants in Mexico, and twenty-four (24)
ounce cans if these preexisting agreements are still in effect at that time. Any
addition to ANC's on-going requirements will be treated per Section 3.3 of the
Agreement. ANC shall provide Alcoa with prompt notice of all of the material
terms of the most favorable offers (including without limitation, any band
pricing offers) it receives after the date this letter amendment is fully
executed from a supplier of can-stock to supply at least fifteen percent (15%)
of its total requirements of aluminum can-stock in North America over one or
more years during 1998, 1999 and/or 2000. Alcoa shall have fifteen (15) working
days to notify ANC of its decision to match or to decline to match such offer
and, for any offer extending beyond 2000, but
Xx. Xxxxxx X. Xxxxxxxxx
February 1, 1996
Page 4
including 1998, 1999 or 2000, its decision to match or decline to match such
offer during those years. If Alcoa declines to match such offer or makes an
alternative offer unacceptable to ANC and ANC accepts the other supplier's
offer, ANC shall be entitled to reduce Alcoa's right of refusal quantity for the
year or years in question commensurately.
9. For contracts or commitments of supply covering the period of the
Offer, if Alcoa agrees or has agreed, on or after January 10, 1995: (i) to sell
to any can sheet purchaser for delivery in North America (whether to meet a
competitive offer or otherwise) under a "metal plus conversion" based agreement
or under any other pricing formula that includes "below market" support on the
risk premium that results in economic value in excess of the risk premium
support that Alcoa previously provided to ANC or (ii) to provide to any can
sheet purchaser in North America for use in North America, any incentive
program, subsidy or the like, which constitutes either a discount or below
market support on the metal components or the conversion component and/or any
other type of financial support on one or more RCS products of the type supplied
by Alcoa to ANC for use in North America, then Alcoa will offer the equivalent
incremental economic value of this support to ANC. This "below market" support
could be in the form of a risk premium discount, or a discount to the London
Metal Exchange metal component, the contango component, the Midwest Premium
component, the conversion component, or any other terms or conditions designed
to deliver economic value. Alcoa shall adjust the price for Tier 1 and priced
Tier 2 volume by the amount of the support or discount, as the case may be, and
shall offer to supply any unpriced Tier 3 volume on such terms; provided,
however, that such adjustment or offer, as the case may be, shall only apply to
ANC deliveries made while Alcoa is supplying can stock to such other purchaser
on those terms. ANC shall notify Alcoa within fifteen days of its acceptance or
rejection of such offer, failing which such offer shall be deemed to have been
rejected. Alcoa will make adjustments to meet the terms of any such offer, but
shall in no event be obligated to make adjustments for any changes in the London
Metal Exchange component, the contango component, the Midwest premium component
or the risk premium component resulting from the market changes. By the end of
January 1997 and January 1998, the Chief Financial Officer of Alcoa will confirm
in writing to the Chief Financial Officer of American National Can that Alcoa is
in compliance with the pricing provisions of this paragraph.
10. Except as expressly modified by this letter amendment, the terms
and conditions of the Agreement shall continue in full force and effect.
11. For purposes of calculating the Midwest Spot price for the
reference periods captured in the Offer, Alcoa will use the average monthly U.S.
transaction prices as quoted in Xxxxx'x Metals Week.
Xx. Xxxxxx X. Xxxxxxxxx
February 1, 1996
Page 5
If the foregoing reflects your understanding of our agreement, please execute
this letter where indicated below and return one fully executed copy of the
letter to me for our files.
Sincerely,
AMERICAN NATIONAL CAN COMPANY
By: /s/Xxxxxx Xxxxxx
-------------------------------------------
Xxxxxx Xxxxxx
Senior Executive Vice President
Chief Operating Officer - Beverage Sector
READ AND AGREED TO THIS 6TH DAY OF FEBRUARY, 1996.
ALUMINUM COMPANY OF AMERICA,
Rigid Packaging Division
By: /s/Xxxxxx Xxxxxxxxx
-------------------------------------------
Xxxxxx Xxxxxxxxx
Title: President
ALCOA 2 YEAR CEILING PRICE
CONTRACT PRICING ALTERNATIVE OFFER
o Base ceiling prices for RCS reference specifications for 1996 and 1997 are
Reference Spec* Ceiling Price
--------------- -------------
Body .0114" $1.220
Soft drink end .0110" $1.630
Bare tab .0110" $1.533
*Prices for changes to reference specifications are adjusted
according to ALCOA's published price schedules dated September 15, 1995
o Cost to customer is $.02 per pound per year for volume placed using this
price mechanism, paid net 30 days after ceiling price volume commitment
o Ceiling price will be adjusted downward to reflect actual average midwest
spot (MWS) if MWS is less than $0.90 per pound as follows:
Price Period Reference Period for MWS
------------ ------------------------
Jan 1, 1996 - Mar 31, 1996 June 1, 1995 - Nov 30, 1995
Apr 1, 1996 - Sept 30, 1996 Sep 1, 1995 - Feb 29, 1996
Oct 1, 1996 - Mar 31, 1997 Mar 1, 1996 - Aug 31, 1997
Apr 1, 1997 - Sep 30, 1997 Sep 1, 1996 - Feb 28, 1997
Oct 1, 1997 - Dec 31, 1997 Mar 1, 1996 - Aug 31, 1997
o Conversion fee for ceiling price material
.0114 body $.32
.0110 soft drink end $.73
.0110 tab (HI9) $.663
o 1/2 of PPI adjustment on total ceiling price effective 1/l/97, based on PPI
12 month period Oct 95 - Sept 96.
o Fixed minimum volumes for 1996 & 1997
-- can place 0 - 100% of fixed volume with ceiling price
-- once volume is fixed, must take during annual period
-- no meet competition provisions on the ceiling price material during
1996 and 1997
-- any volume in excess of the fixed volume commitment and any volume
not placed with this proposed mechanism can be placed with existing
price mechanisms with existing meet competition requirements for
conversion fees
-- the ALCAN banded price offer and other competitive responses to the
ALCAN offer are excluded from meet competition requirements
o Class I toll
-- 15% of body stock shipments at 11(cent)over body stock conversion
price
o Shipments to US & Canada only
o ALCOA agreed upon ship-to locations and product mix
o ALCOA has right of refusal on fixed share/volume for 1998, 1999, 2000
-- No obligation to meet competitive offers/contracts in existence
prior to January 10, 1995
o Deadline to accept this proposal is 9/22/95 and to the volumes at ceiling
price is NLT 9/29/95
o Offer is valid during offer period only if LME is less than $1850/tonne
during offer period
