SOFT TOLL AGREEMENT
FOR ALUMINUM CAN STOCK
AMONG
COCA-COLA BOTTLING CO. CONSOLIDATED
AND
THE COCA-COLA TRADING COMPANY
AND
ALUMINUM COMPANY OF AMERICA
THIS SOFT TOLL AGREEMENT FOR ALUMINUM CAN STOCK (hereinafter referred to as the
"Agreement") is effective as of the date of last signature of CCBCC, TCCTC, and
Alcoa,
Among COCA-COLA BOTTLING CO. CONSOLIDATED
a _______________________ corporation
having a place of business at:
_____________________________________
_____________________________________
(hereinafter referred to as "CCBCC")
And THE COCA-COLA TRADING COMPANY a Delaware
corporation having a place of business at: Xxx
Xxxx-Xxxx Xxxxx, X.X., Xxxxxxx,Xxxxxxx 00000
X.X.X. (hereinafter referred to as "TCCTC")
And ALUMINUM COMPANY OF AMERICA
a Pennsylvania corporation having a place of
business at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxx,
XX 00000 X.X.X. (hereinafter referred to as
"Alcoa")
RECITALS:
A. TCCTC is a direct, wholly-owned subsidiary of The Coca-Cola Company
("TCCC") and is engaged in providing services in respect of the supply
of aluminum can sheet for fabrication into can bodies and ends to be
used by TCCC, its subsidiaries and participating bottlers, canners, and
other companies authorized by TCCC to package, distribute and/or sell
beverages under the trademarks of TCCC, including CCBCC.
B. Alcoa is a producer of aluminum can sheet and desires to avail itself of
services provided by TCCTC to have CCBCC designate Alcoa as a supplier
of aluminum can sheet for can bodies and ends to be used by CCBCC or its
Affiliates.
C. CCBCC, TCCTC, and Alcoa have reached agreement on the terms and
conditions necessary for implementation.
NOW, THEREFORE, IN CONSIDERATION of the promises and obligations of the parties
contained in this Agreement, the parties agree as follows:
1. DEFINITIONS
1.1 ALUMINUM CAN STOCK
"ALUMINUM CAN STOCK" means aluminum beverage can body, end and
tab stock that complies with TCCC's and its qualified can
supplier's standards and specifications, applied in a consistent
manner to all its aluminum can stock suppliers.
1.2 CAN MANUFACTURER
"CAN MANUFACTURER ('CM')" means Ball Corporation, Crown Cork &
Seal Company, Inc., American National Can Company, and any
current U.S. supplier to CCBCC of aluminum can bodies and/or
ends that will use Aluminum Can Stock supplied hereunder.
1.3 AFFILIATES
"Affiliates" shall mean, as to any entity, any other entity
which is controlled by, controls, or is under common control
with such entity. The term "control" (including the terms
"controlled," "controlled by," and "under common control with")
shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of
an entity.
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1.4 DELIVERY TERMS
"FOB" shall mean "Free on Board" as more fully defined by
INCOTERMS 1990.
1.5 GROSS WEIGHT AND NET WEIGHT
The term "Gross Weight" means the input weight of Aluminum Can
Stock used to make a given number of can bodies and ends. The
term "Net Weight" means the Gross Weight minus the weight of
scrap generated in making the given number of can bodies and
ends.
1.6 TERM
This Agreement will be effective with shipments of Aluminum Can
Stock beginning January 1, 1999 and will terminate on December
31, 2000, unless sooner terminated as provided herein.
2. CAN MANUFACTURERS' COOPERATION
2.1 CMS' COOPERATION
TCCTC and CCBCC agree to use commercially reasonable efforts to
secure the cooperation of the CMs in implementing the structure
contemplated hereunder. If that cooperation cannot be achieved,
then the parties to this Agreement shall meet to discuss issues
that prevent the parties from achieving the objectives of this
Agreement, and, appropriately modify this Agreement by mutual
agreement.
2.2 AGREEMENTS WITH CMS
If, by December 31, 1998, agreements with respect to the use of
the Aluminum Can Stock to be purchased by CMs as contemplated by
this Agreement for can bodies and ends are not in place between
CCBCC and its CMs, and which include those commitments by the
CMs that are required under this Agreement, and which include
commitments by the CMs to directly purchase all Aluminum Can
Stock committed hereunder, and which are otherwise satisfactory
to CCBCC, then CCBCC may terminate this Agreement with respect
to the affected commitments.
CCBCC will use commercially reasonable efforts to include, in
those conversion agreements with the CMs, obligations on the CMs
to (1) report to Alcoa the gross and net amounts of Aluminum Can
Stock used hereunder by product and the net amount of Aluminum
Can Stock used hereunder per thousand can bodies and ends, (2)
accept Aluminum Can Stock committed hereunder at CCBCC's
designated CM plants or other plants acceptable to
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Alcoa, (3) return class scrap to Alcoa on terms and conditions
to be negotiated between the CM and Alcoa, and (4) to provide
quarterly status reports to Alcoa, CCBCC, and TCCTC.
3. QUALITY AND DELIVERY
3.1 WARRANTIES
Alcoa warrants to TCCTC, CCBCC, and TCCC that all Aluminum Can
Stock delivered under the Agreement (i) is merchantable and is
fit for its intended purpose, in both cases, for making aluminum
cans that meet the standards of TCCC and CM in effect on the
date hereof, and (ii) meets or exceeds TCCC's and its qualified
CMs' standards for Aluminum Can Stock to be used to manufacture
can bodies and ends to meet TCCC's performance criteria and
standards for aluminum can bodies and ends, which are being
reasonably applied in a consistent manner to all such CM's
Aluminum Can Stock suppliers, as they may change from time to
time; provided, however, that Alcoa has agreed to such changes,
and (iii) does not infringe the intellectual property rights of
third parties.
3.2 CMS TO LOOK TO ALCOA
CCBCC will use good faith efforts to cause the CMs to look
directly and exclusively to Alcoa for remedies for any quality
or delivery problems with Aluminum Can Stock purchased under
this Agreement, whether the CMs buy directly from Alcoa or
through CCBCC. Alcoa agrees to directly provide, and to be
solely responsible for providing, such remedies to the CMs. Any
limitations on Alcoa's liability for quality or delivery
problems will be determined between each CM and Alcoa. However,
Alcoa will not limit its liability for quality or delivery
problems with each CM for Aluminum Can Stock purchased under
this Agreement more than it limits its liability with that CM
for Aluminum Can Stock not purchased hereunder, and in any case
no more than it limits it liability with that CM as of the last
signing date of this Agreement. Alcoa shall not be responsible
to TCCTC, CCBCC or TCCC for their incidental or consequential
damages arising hereunder.
3.3 INDEMNIFICATION
Alcoa shall indemnify and hold harmless TCCTC, TCCC, and CCBCC,
and all of their subsidiaries, officers, agents, and employees,
collectively referred to as the "indemnified parties," against
all claims, costs (including, without limitation, reasonable
attorneys' fees, and full goods replacement and recall costs)
and damages to the extent that they arise because of the
Aluminum Can Stock supplied by Alcoa under this Agreement. The
limitations on damages set forth in Section 3.2 above apply to
this Section 3.3 except in the case of third party beverage
consumer (other than CMs) and other beverage filler
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claims arising against the indemnified parties to the extent due
to the Aluminum Can Stock supplied hereunder.
3.4 DISQUALIFICATION
TCCC or CCBCC may, without waiving other rights for failing to
meet these warranties, disqualify Alcoa if its Aluminum Can
Stock fails to meet these warranties, or if Alcoa repeatedly
fails to provide timely delivery. Rejection or revocation of
acceptance of Aluminum Can Stock may be made by the selected CM,
and Alcoa shall work expeditiously, while coordinating with
CCBCC and the CM, to replace such Aluminum Can Stock.
In the event that Alcoa is disqualified or unable to be
qualified at a CCBCC selected CM's plant, CCBCC will work with
the CM and Alcoa to requalify or qualify. Until Alcoa is
requalified or qualified, CCBCC shall be free to make
alternative arrangements for its Aluminum Can Stock
requirements. Alcoa shall pay to CCBCC any additional, direct,
reasonable costs associated with rolling forward its aluminum
metal hedge position with Alcoa or taking or transferring a
metal position to another supplier resulting from those
alternative arrangements. Until Alcoa is requalified or
qualified, CCBCC is relieved of the affected volume commitments
under this Agreement.
4. PURCHASE AND SALE OF ALUMINUM CAN STOCK
4.1 VOLUME COMMITMENT
4.1.1 NO TCCTC COMMITMENT
The Aluminum Can Stock commitments hereunder are made by
CCBCC alone, and TCCTC has no liability for the
commitments of CCBCC.
4.1.2 COMMITMENT FOR CCBCC'S VOLUME
During the term of this Agreement, CCBCC will require
its CMs to purchase, from Alcoa, one hundred percent
(100%) of CCBCC's requirements for Aluminum Can Stock
for can bodies and ends used at CCBCC's Nashville,
Tennessee and Roanoke, Virginia can filling lines. Such
purchases shall be in addition to any other purchase
commitments any CM has with Alcoa, and shall in no event
be a deduction or set off from any contractual
commitment between such CM and Alcoa. However, if
purchases hereunder are not in addition to any other
purchase commitments any CM has with Alcoa, or are a
deduction or set off from any contractual commitment
between such CM and Alcoa, then Alcoa may terminate this
Agreement, and CCBCC and TCCTC will have no liability,
financial or otherwise as a result of such termination
other than CCBCC's for any direct, reasonable Alcoa cost
or expense incurred with respect to Aluminum Can Stock
which has already been priced. It is estimated
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that these two filling locations will use approximately
500 million can bodies and ends per year (this estimate
is not a commitment to purchase).
4.1.3 ALCOA OBLIGATED TO SUPPLY
Alcoa will supply the amounts committed by CCBCC under
this Agreement to the designated CMs for CCBCC's needs,
and time is of the essence in all orders.
4.2 PURCHASES BY CCBCC
The parties contemplate that actual purchases of the Aluminum
Can Stock committed hereunder will be made by CCBCC's CMs, as
outlined below under Section 6.2. However, CCBCC may, with
Alcoa's consent, purchase the Aluminum Can Stock.
5. SCRAP PURCHASE
Alcoa will work individually with CCBCC's CMs to handle scrap generated
in the use of Aluminum Can Stock purchased hereunder.
6. ALUMINUM CAN STOCK PRICING AND INVOICING
6.1 PRICING
Prices applicable hereunder are provided in the Pricing
Schedule (Exhibit 1).
6.2 INVOICING
Except with respect to Aluminum Can Stock sold to CCBCC as
provided in Section 4.2, Alcoa shall invoice (the "Alcoa
invoices") the CM selected by CCBCC at the price of Section 1 of
the Pricing Schedule.
Any positive difference between the price invoiced under the
Alcoa invoices and the CCBCC price under Section 2 price of the
Pricing Schedule shall be paid by Alcoa to CCBCC, each calendar
quarter, for each pound to which the prices correspond. If the
CCBCC price under Section 2 of the Pricing Schedule is higher
than that of the Alcoa invoices for particular pounds, then
Alcoa shall issue to CCBCC, each calendar quarter, an invoice
(payable net 30 days) for that difference. All invoicing
hereunder shall be netted.
When Alcoa invoices the CM, the CMs are the purchasers of the
Aluminum Can Stock, and therefore own and have title to the
Aluminum Can Stock.
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7. ALCOA OPTION TO MEET ALCAN OFFERS
7.1 ALCOA'S OPTION
Alcoa is to remain competitive with offers received from Alcan
Aluminum Corporation ("Alcan"), as described below in this
Section 7.1. For Aluminum Can Stock that has not yet been priced
by CCBCC under Section 3 of the Pricing Schedule, Alcoa has the
option to meet the terms and conditions of any Alcan competitive
offer(s) on conversion fees up to the aggregate volume not yet
priced hereunder. If Alcoa does not meet the competitive offer
on all of CCBCC's volume not yet priced hereunder, then CCBCC is
free to accept it and is relieved of as much of the volume
commitments under this Agreement as CCBCC so chooses, except to
the extent it would relieve CCBCC of volume already priced under
Section 3 of the Pricing Schedule.
7.2 CERTIFICATION BY CCBCC'S CFO
If CCBCC cannot provide to Alcoa a copy of a competitive offer
under Section 7.1, Alcoa may request CCBCC's CFO to provide a
representation letter to Alcoa certifying the competitive offer.
If requested by and paid for by Alcoa, CCBCC's outside auditor
will also certify that CCBCC is complying with this Section 7.
In no way will these audit rights jeopardize the confidentiality
of other CCBCC suppliers or provide Alcoa with competitive
information.
8. MOST FAVORED NATION
8.1 ALCOA SALES
If Alcoa, or any Alcoa Affiliate, agrees to supply aluminum can
sheet directly to any (a) U.S. soft drink maker or (b) CM at a
price which includes a metal component price having a ceiling of
less than $0.85 per pound, the parties will meet as soon as
practicable for the purpose of revising this Agreement to
reflect the implications of such a lower ceiling price level, if
any.
Except as provided below, if, taking into account, without
limitation, all incentives, promotional activities, discounts,
rebates, credits, subsidies for hedging costs, and the like,
whether or not denominated as related to conversion, Alcoa, or
any Alcoa Affiliate, is selling aluminum can sheet at a price
which has a conversion fee component which is lower than that
hereunder (whether or not such sale was initiated by Alcoa or
was made in response to a request, initiative, or counter of
another purchaser) directly to any (a) U.S. soft drink maker or
(b) CM, then such lower fee shall be substituted for the
conversion cost/lb. hereunder, during the same delivery period
and on
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the same quantity as it is effective for such can maker. For
purposes of determining conversion fees hereunder, the following
shall be excluded from consideration:
o Any systems savings programs between Alcoa and a U.S.
canmaker;
o Any promotional prices or toll fees in connection with the
promotion of new products;
o Spot pricing or toll fees for incremental business; and
o Annual or multi-year toll fee arrangements; provided, however,
that within 5 business days of entering into such an
arrangement with a CM which has a conversion fee lower than
that provided hereunder, Alcoa shall give CCBCC notice of the
material terms thereof, and CCBCC shall, within 10 business
days of receipt of such notice, advise Alcoa of its interest
in pursuing a similar arrangement and Alcoa will offer such
similar arrangement with respect to the same quantity of
Aluminum Can Stock, up to the quantity of volume unpriced for
the delivery period in question.
8.2 CERTIFICATION BY CFO
If requested by CCBCC, Alcoa will certify, by letter from
Alcoa's Rigid Packaging Division's Chief Financial Officer, that
it is complying with this Section 8. If requested by and paid
for by CCBCC, Alcoa's outside auditor will also certify that
Alcoa is complying with this Section 8. In no way will these
audit rights jeopardize confidentiality of other Alcoa customers
or provide CCBCC with competitive information.
9. CAN PROMOTION
Alcoa shall pay to CCBCC, quarterly, a can promotion allowance of
$0.90/thousand cans produced out of Aluminum Can Stock purchased under
this Agreement. Alcoa may request CCBCC's CFO to provide a
representation letter to Alcoa certifying the number of cans so
produced.
10. CHANGES IN INDUSTRY PRICING
If pricing structures in the industry (such as the formula pricing of
adding a metal component (including the midwest premium) and a
conversion fee) change, then the parties shall meet to discuss
appropriate modifications that may be necessary to achieve the
objectives of the parties.
11. CHANGES IN CAN STOCK SPECIFICATIONS
The parties anticipate that changes in Aluminum Can Stock specifications
will occur over time, and that Alcoa will be able to supply such
Aluminum Can Stock. If Alcoa is unable to supply
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such Aluminum Can Stock in the necessary quantities and it is otherwise
available, the parties shall meet to discuss and appropriately agree
upon modification or termination of this Agreement to ensure CCBCC
receives appropriate Aluminum Can Stock.
12. COST AND QUALITY INITIATIVES
Alcoa and CCBCC will work together to lower system costs wherever
possible without injury or hardship to each other. Alcoa and CCBCC will
work together to improve system quality and service.
13. FORCE MAJEURE
The obligations of each party hereunder shall be excused to the extent
that party's performance, or the performance of another party obligated
to that party, is prevented or substantially impeded by strikes, work
stoppages and slowdowns, war, insurrection, government action,
(including levies, etc.), casualty (including without limitation, fire,
flood, accident and explosion), acts of God and any other or different
circumstances beyond the reasonable control of such party (any of the
foregoing events being referred to as an event of"Force Majeure"). The
party affected by an event of Force Majeure shall promptly notify the
other party, identifying the event and estimated duration. The parties
shall take reasonable steps to limit the consequences hereunder of any
Force Majeure events.
14. CONFIDENTIALITY
Except to the extent that disclosures to other persons of confidential
information relating to this Agreement may be required by law or such
confidential information becomes public through no fault of the
appropriate party, TCCTC, TCCC, CCBCC and Alcoa agree not to disclose,
and to cause their Affiliates not to disclose, to any person any pricing
or cost information, or any other terms of this Agreement, or any other
confidential or proprietary information provided pursuant to this
Agreement. However, after consultation with the other parties, a party
may provide, but only on a need to know basis and only to the extent
necessary, such information, in confidence, to financial, tax, and legal
advisors.
15. ENTIRE AGREEMENT
This Agreement and its Exhibits constitute the entire agreement between
the parties with respect to the subject matter hereof, and supersede all
prior oral or written agreements between the parties concerning the
subject matter hereof.
16. AMENDMENT
No amendment to this Agreement shall be binding unless it is in writing
and signed by all parties.
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17. WAIVER
No waiver by any party of any breach of any provision of this Agreement
shall constitute a waiver of any other breach of that or any other
provision of this Agreement.
18. SEVERABILITY
In the event that any of the provisions of this Agreement are held to be
unenforceable the remaining provisions of this Agreement shall remain in
full force and effect, except to the extent that the objectives of the
parties are frustrated.
19. ASSIGNMENT
19.1 IN GENERAL
Except as otherwise provided herein, no party shall assign any
rights or delegate any duties under this Agreement without the
prior written approval of the other parties.
19.2 TO AFFILIATES
Any party may assign this Agreement to an Affiliate provided
that such assignee shall agree in writing to be bound by all
terms of this Agreement in the same manner and to the same
extent as the party is bound.
19.3 CHANGE OF CONTROL
If a sale or other transfer, to an entity or Affiliate of an
entity substantially involved in the manufacture, sale,
marketing or distribution of non-alcoholic beverages, of a
controlling interest in Alcoa or a controlling Affiliate is
concluded, or a sale or other transfer, to an entity or
Affiliate of an entity substantially involved in the
manufacture, sale, marketing or distribution of non-alcoholic
beverages, of substantially all of the assets of Alcoa or a
controlling Affiliate is concluded, then CCBCC may terminate
this Agreement.
19.4 TO CCBCC SUCCESSORS
In addition, should a sale or other transfer of a controlling
interest in CCBCC be concluded, or a sale or other transfer of
substantially all of the assets of CCBCC be concluded, then,
with Alcoa's agreement, CCBCC shall assign and delegate its
respective rights and duties under this Agreement to the
successor entity, and the successor entity must agree to be
bound in writing to the same extent as the assigning and
delegating party. If Alcoa withholds agreement to such sale or
transfer, then CCBCC may terminate this Agreement.
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20. APPLICABLE LAW
The validity, interpretation and performance of this Agreement shall be
governed by the laws applicable to contracts to be performed in the State of
Georgia without giving effect to the conflict of law or choice of law rules
thereof.
AGREED:
COCA-COLA BOTTLING CO. ALUMINUM COMPANY OF AMERICA,
CONSOLIDATED RIGID PACKAGING DIVISION
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxx Xxxxxxx
------------------------------------- ----------------------------
------------------------------------- ----------------------------
President and Chief Operating Officer President
Date: 1/5/99 Date: 12/22/98
------------------------------------- --------------------------
THE COCA-COLA TRADING COMPANY
By: Xxxxxxx X. Xxxxx
----------------------------
Xxxxxxx X. Xxxxx
Vice President
Date: 1/8/99
----------------------------
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EXHIBIT 1
PRICING SCHEDULE
1. PRICING TO CMS
THE FOLLOWING IS A GENERIC DESCRIPTION OF ALCOA'S CURRENT PRICING
PRACTICES FOR ALUMINUM CAN SHEET FOR SALES TO ITS U.S. CAN MAKER
CUSTOMERS.
1.1 EFFECTIVE AND PRICING PERIODS FOR CM PRICING
Throughout the term of this Agreement, prices to be charged by Alcoa to
the CMs are calculated in Pricing Periods and then apply during Effective
Periods, as follows:
Pricing Period Effective Period
-------------- ----------------
3/1/1998 - 8/31/1998 1/1/1999 - 3/31/1999
9/1/1998 - 2/28/1999 4/1/1999 - 9/30/1999
3/1/1999 - 8/31/1999 10/1/1999 - 3/31/2000
9/1/1999 - 2/28/2000 4/1/2000 - 9/30/2000
3/1/2000 - 8/31/2000 10/1/2000- 12/31/2000.
1.2 CM PRICING
The price per pound of Aluminum Can Stock charged by Alcoa to the CMs hereunder
is equal to the sum of a "CM Metal Component" and a "CM Conversion Fee." All
prices for Aluminum Can Stock are FOB the CM's plant.
1.2.1 CM METAL COMPONENT
The CM Metal Component equals "CM Metal Cost" plus the "CM Midwest
Premium," defined as follows:
"CM Metal Cost" during an Effective Period is the average of the daily
per pound cash settlement London Metal Exchange price for aluminum, as
published in XXXXX'X METAL WEEK during a corresponding six month
"Pricing Period."
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"CM Midwest Premium" during an Effective Period is the average of the
weekly per pound closing Midwest Premium for aluminum, as published in
XXXXX'X METAL WEEK, during a corresponding six month "Pricing Period."
1.2.2 CM CONVERSION FEE
The "CM Conversion Fee" for Aluminum Can Stock for can bodies, ends, and
tab are listed in Alcoa's published price schedule dated 1997 February
28, attached hereto as Exhibit 2, as revised from time to time during
the term hereof and subject to annual adjustments on each of April 1,
1999 and April 1, 2000, at one-half (1/2) of the year over year change
in the Producer Price Index for Intermediate Materials, Supplies and
Components, as published monthly by the U.S. Department of Commerce.
2. CCBCC PRICING
The CCBCC price per pound of Aluminum Can Stock purchased hereunder is equal to
the sum of a "CCBCC Metal Component" and a "CCBCC Conversion Fee." All prices
for Aluminum Can Stock are FOB the CM's plant.
2.1 CCBCC METAL COMPONENT
The CCBCC Metal Component equals "CCBCC Metal Cost" plus the "CCBCC
Midwest Premium," defined as follows:
"CCBCC Metal Cost" during a calendar month is the average of the
daily per pound cash settlement London Metal Exchange price for
aluminum for the immediately preceding calendar month, as
published in XXXXX'X METAL WEEK. For example, the CCBCC Metal
Cost during March, 1999 is equal to the average of the daily per
pound cash settlement London Metal Exchange price for aluminum
for February, 1999.
"CCBCC Midwest Premium" during a calendar month is the average
of the weekly per pound closing Midwest Premium for aluminum for
the immediately preceding calendar month, as published in
XXXXX'X METAL WEEK.
However, the "CCBCC Metal Cost" component may be changed by CCBCC as
provided in Section 3 below.
2.2 CCBCC CONVERSION FEE
The "CCBCC Conversion Fee" for Aluminum Can Stock for can
bodies, ends, and tab are listed in Alcoa's published price
schedule dated 1997 February 28, subject to annual adjustments
on each of April 1, 1999 and April 1, 2000, at one-half (1/2) of
the year over year change in the Producer Price Index for
Intermediate Materials, Supplies and Components, as published
monthly by the
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U.S. Department of Commerce ("PPI"), or alternate agreed index
if this PPI is no longer calculated. For example, the 2000 CCBCC
Conversion Fee will be equal to the 1999 one plus (the 1999
conversion fee x (0.5 x ((1999 PPI - 1998 PPI)/ 1998 PPI))). If
the PPI decreases, the CCBCC Conversion Fee will not be changed
for the appropriate year. (In the event of extraordinary
increases in cost items which were not included in, or a
component of, the change in the PPI, the parties agree to review
and if mutually agreeable, to make appropriate modifications.)
However, CCBCC Conversion Fee is subject to the meeting
competition and most favored nations provisions of the
Agreement.
3. ALTERNATIVE PRICING OF THE CCBCC METAL COST
As an alternative to Section 2.1 above, CCBCC may establish a price for the
CCBCC Metal Cost for particular volumes by requesting Alcoa to (1) make spot
metal purchases, (2) fix a metal price forward, (3) establish a minimum and
maximum metal price band, or (4) establish a ceiling metal price. In such
cases, Alcoa and CCBCC wi11 negotiate a charge, if any, to establish such
pricing, and agree upon any timing or related pricing issues. Alcoa will issue
an invoice to CCBCC for any such agreed upon charge, to be netted quarterly
with the invoicing of Section 6.2 and the can promotion of Section 9 of the
Agreement. The charge, if any, shall reflect the cost of establishing the price
requested by CCBCC.
Once a volume of Aluminum Can Stock has been priced, it cannot be repriced.
Furthermore, this Section 3 can only be used to price the Net Weight of
Aluminum Can Stock. Once Aluminum Can Stock has been priced under this Section
3, CCBCC must take that volume of Aluminum Can Stock in the agreed periods, or
pay Alcoa to the extent Alcoa is directly and actually harmed by a canceled
order or deferred delivery date, unless such cancellation or deferrals are due
to disqualification..
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