EXHIBIT 10
AMENDED AND RESTATED CAN SUPPLY
AGREEMENT
This Amended and
Restated Can Supply Agreement (the “Amended and Restated
Agreement”) is entered into by and between: (i) Rexam
Beverage Can Company (“Rexam”), a Delaware corporation,
with its principal place of business at 8770 West Bryn Mawr Avenue,
11 th
Floor,
Chicago, Illinois 60631; and (ii) Coca-Cola Bottlers’
Sales & Services Company LLC, a limited liability company
organized and existing under the laws of Delaware, with its
principal offices at 3200 Windy Hill Road, East Tower, Suite 300,
Atlanta, Georgia 30339 (“CCB”), acting solely on behalf
of and as agent for the Bottlers (as defined below) (each a
“Party” and together, the “Parties,” and
where applicable, shall be deemed to include the Bottlers, as
defined below), and amends and restates that certain Can Supply
Agreement entered into on or about January 1, 2004 by and
between Rexam and CCB, as agent for certain Bottlers (the
“Original CCB Agreement”).
RECITALS
WHEREAS, CCB acts as agent for
certain Coca-Cola bottlers and other entities, including Coca-Cola
Enterprises Inc. (“CCE”) and those other duly licensed
Coca-Cola bottlers and related cooperative bottling/canning
facilities or other entities set forth in Exhibit A attached hereto
(each, individually, a “Bottler,” and collectively, the
“Bottlers”); and
WHEREAS, REXAM owns and operates
manufacturing plants throughout the United States which produce
aluminum beverage containers; and
WHEREAS, CCE and Rexam are parties
to that certain Can Supply Agreement executed by and between CCE
and Rexam (at the time known as American National Can Company) and
effective as of January 1, 1999, as amended (the
“Existing CCE Agreement”); and
WHEREAS, pursuant to a certain
Procurement Agency Agreement dated April 14, 2003 and other
agency agreements between CCB and the Bottlers (collectively the
“Agency Agreements”), CCB has been authorized by the
Bottlers, who are in the business of, among other things, filling
soft drink beverages into aluminum beverage containers comprised of
12 oz bodies and ends (the “Cans”) as specified in
Exhibit B, to negotiate and enter into this Can Supply Agreement on
their behalf; and
Rexam
CCB
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WHEREAS, on or about January 1, 2004 CCB,
acting solely as agent for and on behalf of certain Bottlers and
Rexam, entered into the Original Agreement, which has an expiration
date of December 31, 2006; and
WHEREAS, CCB and Rexam now desire to
enter into this Amended and Restated Agreement in order to amend
and restate the Original Agreement as set forth herein and to
provide for the supply of Cans to certain production facilities
operated by Bottlers identified in Exhibit A , all pursuant to the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of
the foregoing premises and the covenants contained herein, the
Parties hereby agree as follows:
(a) CCB’s Agency
. This Agreement is executed by CCB
solely as agent for the Bottlers. CCB represents and warrants that
pursuant to the Agency Agreements it is the authorized agent for
the Bottlers, and is authorized to conduct negotiations, execute
and manage agreements for the supply of Cans to the Bottlers for
use within the Territory (as defined below). By the execution of
this Agreement, CCB further represents that the Bottlers listed in
Exhibit A consent to and shall be bound by this Agreement. CCB
retains the right to add or delete Bottlers as mutually agreed from
Exhibit A from time to time during the Term hereof. In the event of
a deletion, the Bottlers, through CCB, will make commercially
reasonable efforts to provide replacement volumes.
(b) Rexam’s
Authority . Rexam
represents and warrants to CCB that it has the authority to enter
into and perform this Amended and Restated Agreement.
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2.
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Effect on
Other Agreements. Upon execution hereof, this Amended and Restated
Agreement shall replace and supersede both: (i) the Existing
CCE Agreement; and (ii) the Original CCB Agreement, both in
their entirety. For the avoidance of doubt, both the Existing CCE
Agreement and the Original CCB Agreement shall be deemed terminated
by mutual consent without penalty upon the execution
hereof.
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Rexam
CCB
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3.
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Term . The
term of this Amended and Restated Agreement (the
“Term”) shall commence on January 1, 2006, and,
unless sooner terminated as provided herein, shall expire on ***
(the “Termination Date”).
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4.
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Description of Product.
This Amended and Restated Agreement
relates to Cans with the specifications as shown in Exhibit B (the
“Specifications”). Rexam will have the right to place
its name and/or logo on the Cans in such size and location as is
customary in the industry. Upon request, Rexam will provide CCB
with a certificate of conformity with each shipment indicating that
the Cans included in the shipment have been inspected by Rexam and
comply with the Specifications and all obligations of this Amended
and Restated Agreement.
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5.
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Territory. The obligation of Rexam to supply Cans, and the
obligation of Bottlers to purchase Cans, pursuant to the terms
hereof, shall apply only to filling locations owned or operated by
the Bottlers that are physically located within the fifty United
States or the District of Columbia, Canada, and/or Bermuda
(collectively, the “Territory”).
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7.
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Volume. The Cans will be supplied to the filling
locations located within the Territory set forth for each Bottler
in Exhibit A (and at any additional or substitute facilities
hereafter acquired or otherwise designated by CCB on behalf of any
of the Bottlers and agreed to in writing by Rexam which agreement
by Rexam will not be unreasonably withheld) (collectively, the
“Filling Locations”). During the Term of this Amended
and Restated Agreement, each of the Bottlers shall purchase 100% of
the Filling Locations’ respective individual requirements of
Cans from Rexam in the sizes set forth in Exhibit B, except that
each Bottler shall be allowed a commercially reasonable time to
exhaust any existing supply of non-Rexam supplied Cans kept in
inventory during the ordinary
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***
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Material has
been omitted pursuant to a request for confidential treatment and
filed separately with the SEC.
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Rexam
CCB
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course of business as of the
beginning of the Term hereof. If requested by Rexam, and not more
than once annually, CCB shall provide a certificate from an officer
of CCB attesting that each Bottler has complied with its annual
purchase requirements for the Filling Locations as set forth
herein. If, for any reason (other than an event of Force Majeure
covered in Section 23, or a metal supply issue covered in
Section 14, below) Rexam is unable to supply bodies and/or
ends, as the case may be, of satisfactory quality, any affected
Bottler(s) shall be relieved of any obligation to buy from Rexam
the unsatisfactory item under the terms of this Amended and
Restated Agreement until Rexam corrects the problem on an ongoing
basis to the reasonable satisfaction of the affected Bottler(s). In
such event and only for the duration of time that such quality
problem exists: (a) Rexam shall provide the relevant Filling
Location(s) with fully conforming bodies and/or ends from an
alternate Rexam plant and Rexam shall absorb any excess freight
involved in shipping from the alternate plant; (b) if Rexam is
unable to procure conforming bodies and/or ends from a Rexam plant,
the affected Bottler(s) may procure conforming bodies and/or ends
from any other source; (c) Rexam shall pay any affected
Bottler the difference between the purchase price to such Bottler
for such conforming bodies and/or ends and the purchase price such
Bottler otherwise would have incurred hereunder; and (d) all
bodies and/or ends purchased by affected Bottlers from any
alternate source pursuant to this paragraph shall be credited
against the relevant Bottler’s purchase obligations
hereunder.
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(a) Sales Subject to
Orders. All sales of Cans
under this Amended and Restated Agreement will be subject to
written orders issued by the Bottlers (through CCB or otherwise) to
Rexam (“Orders”).
(b) Quantities and
Dates. Orders will
specify quantities, delivery dates and points of
delivery.
(c) Special Terms.
Bottlers (through CCB or otherwise)
and Rexam may agree in writing to special terms, such as deliveries
in a specified manner, for which Rexam may request additional
compensation. Rexam agrees that all invoices will include the price
of the Cans separate from the compensation for such special
terms.
Rexam
CCB
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(d) Adjustments.
In the event of changes identified
in Section 8(c), either Bottler or Rexam may, in writing,
request an equitable adjustment in the prices or delivery terms of
the relevant Order. Any and all claims and requests by Rexam under
this subsection will be deemed waived unless made in writing and
received by Bottler within twenty (20) days from the receipt
by Rexam of the written notification for such changes.
(e) Order
Termination
(i) With or Without Cause.
Bottlers (through CCB or otherwise) may terminate, with or without
cause, any single Order upon written notice to Rexam. In the event
of such termination, Rexam may in writing make claim for the cost
of any work in process and finished stocks, but not for any cost of
design, engineering, or development, special tooling or general
purpose equipment unless such items have been specifically ordered
and separately priced in the terminated Order. Other than as
specified in the preceding sentence, Rexam will not be entitled to
any claim, remedy or damages from Bottler with respect to
termination of an Order. Any and all claims or requests by Rexam
under this subsection will be deemed waived unless made in writing
and received by Bottler within five (5) business days (not
including holidays on which Rexam’s executive offices are
closed) from the date of termination.
(ii) Effect on Other Orders .
Termination of any single Order for any reason will not affect any
other Order between Bottler and Rexam, or this Amended and Restated
Agreement.
(f) Time. Time is of the essence in all Orders. Rexam will
promptly advise Bottlers of any delay or anticipated delay in
delivery or performance.
(g) Supersede Preprinted Terms in
Other Documents. The
terms and conditions of this Amended and Restated Agreement will
supersede any preprinted or standard terms which may appear on any
purchase orders, invoices, acknowledgements, or similar documents
exchanged between Rexam and Bottlers and/or CCB as agent for the
Bottlers.
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9.
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Price. The base price(s) for Cans, and adjustments
thereto, under this Amended and Restated Agreement shall be as
stated in the Pricing Schedule, attached as Exhibit C to this
Amended and Restated Agreement.
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Rexam
CCB
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10.
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Payment;
Risk of Loss. Payment
is due *** days after the date of invoice (if such invoice is sent
electronically, which is the method preferred by both Parties); or
*** days from receipt of invoice (if such invoice is not able to be
sent electronically). Payment for any services provided pursuant to
Exhibit D is due in full *** days after invoice date. Amounts not
paid by the due date shall bear interest at 2% over the prime rate
announced from time to time by Bank One, Chicago, Illinois, or such
lesser rate as provided by law. Notification of payments due shall
be directed as follows: (i) if to Coca-Cola Enterprises Inc
(“CCE”) or to The Coca-Cola Bottling Company
Consolidated (“Consolidated”) or any other Bottler
owned or controlled by Consolidated, bill(s) of lading for Cans
shipped or invoices for all other charges (e.g., for services
provided pursuant to Section 15 hereof) shall be delivered by
the carrier or by Rexam to CCE’s or Consolidated’s
respective filling locations; (ii) if, as to hot-filled Cans
processed in the Niles, Illinois facility operated by Coca-Cola
Bottling Company of Chicago (“Niles”) or such other
facilities as designated by CCB in the future, all invoice(s) shall
be sent by Rexam to Coca-Cola North America, a division of The
Coca-Cola Company, at: Coca-Cola Company, Vender # 1037076, Minute
Maid Hot Fill, PO Box 2467, Atlanta, GA 30301; and (iii) if to
any other Bottler not listed in subsections (i) or
(ii) above (hereinafter the “Participating CCBA
Bottlers”), daily electronic reports of shipments made or
services provided pursuant to Section 16 to participating CCBA
Bottlers, shall be sent by Rexam to The Coca-Cola Bottlers’
Association, Inc. at 3282 Northside Parkway, Atlanta, Georgia
30327. Each individual Bottler, including the Participating CCBA
Bottlers, shall be solely responsible for payment of all amounts
due from it under this Amended and Restated Agreement. If payments
are not received within 60 days, Rexam has the right to offset any
rebates Rexam may have paid to CCB that are allocable to such
Bottler’s outstanding receivables, from any future rebate
payments to CCB, subject to reinstatement once payment is made. CCB
shall use reasonable commercial efforts to resolve any payment
disputes between Rexam and any of the Bottlers. Title and risk of
loss shall pass to each applicable Bottler upon delivery of Cans to
the common carrier, even if Rexam may have selected the
carrier.
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***
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Material has
been omitted pursuant to a request for confidential treatment and
filed separately with the SEC.
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Rexam
CCB
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11.
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Packaging
and Shipping.
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(a) Packaging
Standards . All packing
and packaging will comply with good commercial practice and
applicable transport regulations, and will consist of suitable
containers for optimum protection of the goods and for in-plant
handling and storage.
(b) Carrier and Route
. Delivery will be made by the
carrier and route specified by Rexam.
(c) Labeling
. All shipping containers will be
labeled in accordance with applicable laws and regulations relating
to the transport of goods.
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12.
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Delivery. Delivery will not be deemed complete until the
Cans have actually been received and accepted by Bottler following
completion of its standard inspection procedures. All inspections
will be completed within a reasonable period of time.
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13.
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Non-Conforming Orders.
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(a) Inspection and
Testing . All Orders of
Cans are subject to inspection and rejection by Bottler within a
reasonable period of time prior to payment.
(b) Cancellation for
Non-Conformance . Bottler
may cancel an Order for any nonconformity in any lot or installment
delivered and performed hereunder, including, without limitation,
failure of Rexam to deliver the Order of Cans when due, delivery of
defective or otherwise nonconforming Cans, or delivery of an
insufficient quantity of Cans.
(c) Additional
Remedies . Without
limiting any of Bottler’s rights, Bottler may require Rexam,
at Rexam’s expense:
(i) to promptly repair or replace
any or all rejected Orders of Cans, or
(ii) to refund the price of any or
all rejected Orders of Cans.
(d) Risk of Loss for Rejected
Orders . All rejected
Orders of Cans will be held for Rexam’s prompt instruction
and at Rexam’s risk and expense.
(a) The Parties acknowledge that, subject to the
Parties’ obligations regarding
Rexam
CCB
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soft tolling set forth in Section
B.1 (a) of Exhibit C, soft tolling of metal is a part of this
Amended and Restated Agreement. To that extent, CCB, on behalf of
the Bottlers, shall provide Rexam with reasonable advance notice of
any change in designated aluminum suppliers (and such newly
designated supplier shall be a qualified first tier metal sheet
producer, or second tier sheet producer reasonably acceptable to
Rexam), no later than 120 days prior to implementing such change to
this Amended and Restated Agreement (excluding 2006, which has been
dealt with as of the date hereof to the Parties’ mutual
satisfaction). Notwithstanding the foregoing, in the event of an
actual, material quality problem or shortfall in the metal supplied
to Rexam, Rexam shall retain the right to qualify or disqualify any
of CCB’s designated aluminum supplier(s) provided ,
however, that the criteria used to disqualify such supplier(s) was
pre-existing ( i.e. , in effect prior to the execution
hereof), was uniformly established for all aluminum suppliers to
Rexam, and was disclosed to CCB and agreed upon prior to the
execution hereof; and provided further that Rexam provide
CCB with reasonable advance written notice of the effective date of
any such disqualification. Upon any such notice of
disqualification, the Parties will discuss a mutually agreeable
aluminum supplier, and the Parties shall agree to use any other
aluminum supplier if such supplier is then qualified by Rexam as
set forth above (Rexam agrees to provide CCB a listing of all
aluminum suppliers qualified to do business with Rexam, which list
may be updated quarterly, as needed). In the event a supplier not
currently qualified to supply Rexam is required for supply reasons
currently unforeseen by Rexam or CCB, and the Parties cannot reach
agreement on such an unqualified aluminum supplier within
*** days from the date of such disqualification, Rexam may
use any other aluminum supplier so long as such aluminum meets the
specifications contained in this Amended and Restated Agreement,
and (ii) if, and only if so agreed to by Rexam and CCB, all
incremental cost adjustments, if any, to implement such new
aluminum supplier are borne by the Bottlers for the anticipated
period of time required (not to exceed one hundred and twenty
(120) days), or until a mutually agreed to supplier is
found.
(b) At any time during the Term of this Amended and
Restated Agreement,
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***
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Material has
been omitted pursuant to a request for confidential treatment and
filed separately with the SEC.
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Rexam
CCB
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CCB may elect to direct the
disposition of in-plant scrap, provided however, that:
(i) Rexam shall not be required to terminate any pre-existing,
enforceable annual ( i.e. , of no greater than one year in
length) agreement otherwise requiring disposition of in-plant
scrap; and (ii) that, subject to the mutual agreement of CCB
and Rexam, there will be commensurate annual economic adjustments
(based on periodic changes in the price of ingot) made to Rexam
with respect to the remaining Term and subsequent projected volume
of this Amended and Restated Agreement, to reflect the impact of
implementing this right.
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15.
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Purchases; Forecasts.
Purchases of Cans will be made via
purchase order or alternative electronic means as set forth in
Section 8 above. To facilitate such purchases, each individual
Bottler, through CCB or otherwise, shall advise Rexam, prior to
each October 31, of the Filling Locations’ projected
annual requirements of Cans under this Amended and Restated
Agreement, by location, for the upcoming calendar year (the
“Forecasted Volume”) and, using commercially reasonable
judgment, shall provide rolling 90 day forecasts, by filling
location, by size, by label, on a monthly basis throughout the year
(a “90 Day Rolling Forecast”). All Forecasted Volume
shall be provided for planning purposes only and shall not
constitute a firm offer to buy, provided, however, that Rexam may
use reasonable judgment to produce Cans pursuant to the relevant 90
Day Rolling Forecast only, in advance of receipt of actual orders,
in which event all such Cans shall be purchased by the applicable
Bottler within ninety (90) days. Such Forecasted Volume shall
remain in effect until adjusted by each Bottler upon reasonable
advance notice to Rexam; provided, however, that such adjustments
shall not affect each Filling Location’s percent purchase
requirement set forth above in Section 7. Substantial
increases in volume that are not consistent with a Bottler’s
Forecasted Volume or significant increases in the Forecasted Volume
from year to year may require discussion and agreement between
Rexam and the applicable Bottler on meeting such increase in
volume, and the Parties agree to work in good faith to reach such
agreement.
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16.
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Rexam’s Services
. Rexam may perform the services described on
Exhibit D attached hereto, as frequently as is reasonably
necessary and at the applicable Bottler’s specific request,
pursuant to the rates for such services as specified on such
Exhibit D, which rates may be subject to change from time to
time by Rexam. CCB will make Exhibit D available to each
Bottler.
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Rexam
CCB
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17.
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Dunnage. The Parties’ obligations with respect to
dunnage are set forth in the attached Exhibits E, E-1, E-2, and F,
which CCB will make available to each Bottler.
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18.
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Warranties, Claims and Limitation of
Liability. The
Parties’ obligations with respect to warranties, claims, and
limitation of liability are set forth in the attached Exhibit
G.
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(a) In addition to any other termination rights
available under applicable law or set forth herein, at any time
prior to the Termination Date, CCB may immediately terminate this
Amended and Restated Agreement with Rexam (as to any Bottler(s) or
all Bottlers), or Rexam may terminate this Amended and Restated
Agreement with CCB or any of the Bottlers, in either case upon
notice to the other Party if such Party, or any of the Bottlers, as
the case may be: (i) is deemed bankrupt or shall make an
assignment for the benefit of its creditors, or a receiver is
appointed for it or for any of its properties or it is adjudged to
be insolvent; or (ii) defaulted in the performance of any
material term or condition of this Amended and Restated Agreement
and such default has not been remedied within thirty (30) days
after the giving of written notice with respect to such breach to
the defaulting Party. Any such acts of, by or to a Bottler shall
give rise to a right to terminate solely as to that Bottler and not
as to any other Bottler or CCB. In the event that this Amended and
Restated Agreement is terminated with respect to any individual
Bottler, the Amended and Restated Agreement shall remain in full
force and effect among Rexam, CCB, and the remaining
Bottlers.
(b) CCB shall not be responsible or liable for any
Bottler’s failure to perform its obligations hereunder. The
termination of any or all of the Agency Agreements shall have no
effect on this Amended and Restated Agreement, provided, however,
that any new or successor agent of the affected Bottler(s) shall
notify Rexam that it is the new or successor agent for the Bottlers
and such new or successor agent shall agree to be bound by the
terms of this Amended and Restated Agreement as if the new or
successor agent had been the original agent.
Rexam
CCB
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20.
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Effect of
Termination. Upon
termination of this Amended and Restated Agreement for any reason,
each Bottler shall purchase all Cans and otherwise non-usable
Bottler -specific manufacturing supplies and related items
previously ordered for the relevant Bottler. The price which each
affected Bottler shall pay for Cans and any otherwise non-usable
Bottler specific manufacturing supplies and related items as a
result of any termination shall be the price in effect hereunder
upon the effective date of termination, inclusive of any soft
tolling.
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21.
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Indemnity. Notwithstanding anything to the contrary set
forth in Exhibit G, Rexam will indemnify and hold harmless CCB and
Bottlers, their subsidiaries, officers, agents, employees and
customers against all claims, costs (including, without limitation,
reasonable attorneys’ fees) and damages (including, without
limitation those resulting from recall of Cans) arising from
(i) any defect in the Cans, (ii) breach of any warranties
or representations of Rexam set forth in this Amended and Restated
Agreement, and (iii) breach of any term or condition set forth
in this Amended and Restated Agreement by Rexam.
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22.
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Insurance . Rexam will obtain and maintain at its’ own
expense through a combination of comprehensive general liability
insurance and umbrella liability insurance, which includes products
liability coverage, with insurance companies that have a minimum
A.M. Best Rating of A-VII in the amount of at least five million
dollars ($5,000,000) per occurrence combined single limit,
aggregate limit of ten million dollars ($10,000,000). Rexam will
provide CCB and, upon request, the Bottlers with a certificate of
insurance evidencing such insurance and naming CCB and the Bottlers
listed in Exhibit A as additional insureds within thirty
(30) days of execution of this Amended and Restated Agreement.
Such certificate will further contain a provision that said policy
or policies cannot be cancelled, terminated, non-renewed or
materially changed during the Term without thirty (30) days
prior written notice to CCB. The stipulated l
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