Exhibit 10.7
[*] – Text omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K under the Securities Exchange Act of 1934, as amended, because it is not material and is of the type that the registrant treats as private or confidential.
MASTER SUPPLY AGREEMENT
MASTER SUPPLY AGREEMENT (the “Agreement”) dated November 1, 2019 (the “Effective Date”) between REYNOLDS CONSUMER PRODUCTS LLC, a Delaware limited liability company with its headquarters at 1900 West Field Court, Lake Forest, IL 60045 (“Seller”), and PACTIV LLC, a Delaware limited liability company with its headquarters at 1900 West Field Court, Lake Forest, IL 60045 (“Buyer”). Seller and Buyer are referred to individually at times as a “Party” and collectively at times as the “Parties”.
BACKGROUND
A. Seller sells various types of products used in the consumer and food service markets.
B. Buyer sells various types of products, including certain products of the type made by Seller, to its customers.
C. The Parties are entering into this Agreement to establish the terms and conditions under which Seller may agree to sell specific products to Buyer, and Buyer may agree to purchase specific products from Seller for later resale by Buyer to its business customers.
AGREEMENT
1. Term. The “Term” of this Agreement will commence on the Effective Date and will end on the earlier of: (a) the first anniversary of the expiration date of the last Purchase Schedule (as defined in this next Section); (b) a termination date elected by a Party in a written notice delivered to the other Party any time after the expiration of the last Purchase Schedule; or (c) a termination date elected by a Party in a written notice delivered to the other Party as provided in Subsection 11(d) of this Agreement. The rights and obligations of the Parties under this Agreement will survive the expiration or earlier termination of this Agreement with respect to any (i) products purchased and sold under this Agreement during the Term and products sold after the Term for orders accepted during the Term; (ii) Confidential Information (as defined in Section 10 of this Agreement) disclosed or received by a Party during the Term; (iii) breach of this Agreement by a Party; (iv) any other statement, decision, act or omission of a Party concerning or related to this Agreement; (v) any Dispute (as defined in Section 11 of this Agreement) between the Parties concerning or related to this Agreement; (vi) products and other materials manufactured or maintained by Seller in inventory for sale to Buyer that Buyer is obligated to purchase under a Purchase Schedule; and (vii) any provision that expressly states that it will survive the expiration or earlier termination of this Agreement.
2. Scope. This Agreement will apply to all products sold by Seller to Buyer, and all products purchased by Buyer from Seller, during the Term unless the Parties expressly agree that this Agreement will not apply to a particular type of transaction in a separate written document signed by an officer of each Party. This Agreement will not require Seller to sell any type or quantity of a product to Buyer, nor will this Agreement required Buyer to purchase any type or quantity of a product from Seller, except as expressly provided by the Parties in a Purchase Schedule. The phrase “Purchase Schedule” will mean a written supplement to this Agreement signed by an officer of each Party which references this Agreement and which identities, among other terms and conditions, the specific types and quantities of products that will be purchased and sold by the Parties on terms and conditions in the schedule, the specifications for the identified products, the duration of the commitment period during which the Parties will be obligated to purchase and sell the identified products on the terms and conditions in the schedule, the prices of the identified products, any mechanisms for adjusting the prices of the identified products over the commitment period, and the facilities at which the identified products will be manufactured, stored and delivered by Seller. The Parties may add terms and conditions to, and amend the terms and conditions of, this Agreement in a Purchase Schedule, but any additional and amended terms and conditions in a Purchase Schedule supplementing and
modifying this Agreement will only apply the specific products identified in that Purchase Schedule for its duration.
3. Standard Operating Procedures. Over approximately the past eight years, the Parties have been supplying select Products to one another for use in the operation of their respective businesses within the United States of America, Canada and Mexico. The Parties developed and been following certain standard operating procedures in connecting with, among other topics, forecasting, production planning, ordering, delivering and resolving claims on the Products supplied to one another (the “Current SOPs”). The Parties will be updating their respective business systems over the next six months, and the updates to these business systems will require the Parties to modify the Current SOPs. Once the Parties have completed the updates to the business systems and agreed on the necessary modifications to the Current SOPs, the Parties will sign a written amendment to this Agreement appending the updated standard operating procedures (the “Updated SOPs”). Until the Parties have signed a written amendment appending the Updated SOPs, the parties will continue to follow the Current SOPs. The Parties will comply with the applicable SOPs in connection with the purchase and sale of products identified in a Purchase Schedule. The Parties may add terms and conditions to, and amend the terms and conditions of, the SOP in a Purchase Schedule, but any additional and amended terms and conditions in a Purchase Schedule supplementing and modifying the SOP will only apply the specific products identified in that Purchase Schedule for its duration.
4. Order and Priority of Interpretation. In the event of any conflict, inconsistency or ambiguity between two or more provisions in this Agreement, including the provisions in its Exhibits and Purchase Schedules, the provisions in the documents will govern, supersede and control over one another in the following order of priority: (1st) a Purchase Schedule with regards to the purchase and sale of the specific products identified in that Purchase Schedule for its duration; (2nd) the SOP; (3rd) any Exhibit to this Agreement but only with regards to specific subject matter of the Exhibit; and (4th) the main body of this Agreement prior to the signature page.
5. General Representations, Warranties and Covenants. A Party represents, warrant and covenants on the Effective Date and at all times during the Term that:
A Party will promptly notify the other Party of any change in circumstance during the Term in which the Party is no longer in compliance with the foregoing general representations, warranties and covenants. An incident of actual, alleged or suspected non-compliance by a Party with a warranty under this Section being investigated, contested or corrected in good faith by the Party and which, regardless of outcome, will have no material adverse effect on the Party or its performance under this Agreement or on the other Party, will not be considered a breach of this clause. An incident of actual, alleged or suspected non-compliance by a
Party of this Section or any other Section of this Agreement will be grounds for the other Party to demand adequate assurances of performance as provided by Section 2-609 of the Illinois Uniform Commercial Code. A Party will have ten (10) days to provide adequate assurances of performance to the other Party in a form acceptable to the other Party in its good faith discretion.
6. Specific Product Warranties. Seller represents and warrants to Buyer that each product sold under this Agreement will at the time of delivery to Buyer:
If a Buyer receives a product that fails to conform to these representations and warranties, the sole remedies of Buyer for the breach of warranty will be to: (1) reject and return the non-conforming product to Seller for a refund or credit, or a replacement conforming product, in the manner and time period provided in the SOP; (2) obtain reimbursement from Seller for actual, reasonable, substantiated out-of-pocket expenses incurred by Buyer in the recovery, return or disposal of a non-conforming product that is the subject of a mandatory product recall required under Applicable Laws or a voluntary withdrawal declared by Seller or approved by Seller (such approval not to be unreasonably withheld, conditioned or delayed); and (3) obtain indemnification from Seller for any Indemnified Claim arising from or related to the nonconforming product as provided in Section 7.
7. Indemnification.
8. Insurance. During the Term of this Agreement, each Party will maintain the following minimum types and amounts of insurance coverage during the Term of this Agreement:
All insurers of a Party on such policies must have at all times an A.M. Best financial rating of at least “A-Minus VII”. An insuring Party may satisfy the required minimum amounts of insurance through a primary policy and one or more excess policies. All insurance of an insuring Party must be “primary and noncontributory” with respect to any insurance that the other Party may maintain, but only with respect to the negligence or other legal liability of the insuring Party.
An insuring Party must deliver the following written evidence of the required insurance coverage to the other Party (Attention: Risk Management), or its designated insurance monitoring service, within ten (10) of written request and at least thirty (30) days in advance of the expiration of a then current policy term (if a declaration or endorsement is not available from an insurer at the time requested or required, an insuring Party will provide them as soon as the declaration or endorsement is available from the insurer):
A Party may maintain any level of deductible on required insurance coverage allowed by Applicable Law. A Party may also self-insure any of the required insurance coverage, in whole or in part, if allowed by Applicable Law during any period that the Party maintains a tangible net worth in excess of $100 million USD and maintains a professionally managed and adequately reserved for and funded self-insurance program.
9. Limitations on Liability.
10. Confidential Information and Other Intellectual Property.
The criteria in Clause (2) and Clause (3) will not apply to Confidential Information of a Disclosing Party observed or heard by a Receiving Party in a plant, warehouse, facility or system of the Disclosing Party. The existence and terms of this Agreement, and the existence, nature and extent of the business relationship between the Parties, will be considered the Confidential Information of each Party.
Except for the limited representations and warranties in this Section, a Disclosing Party disclaims all other representations and warranties of any kind related to its Confidential Information, whether express, implied or arising by operation of law, including the disclaimer, without limitation, of any representation and warranties concerning merchantability, fitness for a particular purpose, truth, accuracy or completeness.
11. Dispute Resolution.
12. Miscellaneous.
Address for notice to Buyer:
Pactiv LLC
1900 West Field Court
Lake Forest, IL 60045
Attn: John McGrath, Chief Executive Officer
Email: jmcgrath@pactiv.com
For any notice concerning default or termination, with a copy to:
Pactiv LLC
1900 West Field Court
Lake Forest, IL 60045
Attn: Steven R. Karl, General Counsel
Email: skarl@pactiv.com
Address for notices to Seller:
Reynolds Consumer Products LLC
1900 W. Field Court
Lake Forest, IL 60045
Attention: Lance Mitchell, Chief Executive Officer
Email: Lance.Mitchell@@ReynoldsBrands.com
For any notice concerning default or termination, with a copy to:
Reynolds Consumer Products LLC
1900 W. Field Court
Lake Forest, IL 60045
Attention: David Watson, General Counsel
Email: David.Watson@ReynoldsBrands.com
In witness whereof, Seller and Buyer have executed this Master Supply Agreement as of the Effective Date.
REYNOLDS CONSUMER PRODUCTS LLC, as Seller
By: /s/ Lance Mitchell
Lance Mitchell
Chief Executive Officer
PACTIV LLC, as Buyer
By: /s/ John McGrath
John McGrath
Chief Executive Officer
PURCHASE SCHEDULE
This Purchase Schedule dated November 1, 2019 (“Effective Date”) forms part of, and supplements and amends, the Master Supply Agreement dated November 1, 2019 (“Agreement”) between Reynolds Consumer Products LLC (“Seller”) and Pactiv LLC (“Buyer”). The Parties agree as follows:
1. Defined Terms. Capitalized terms and phrases not otherwise defined in this Purchase Schedule will have the same meaning ascribed to them in the Agreement. As used in this Purchase Schedule, the phrase “Affiliates” will mean the direct and indirect subsidiaries of a Party.
2. Commitment Period. This Purchase Schedule will commence on the Effective Date and will end on the earlier of: (a) December 31, 2024; or (b) an earlier termination date elected by a Party in a written notice delivered to the other Party as provided in Subsection 11(d) of the Agreement (the period of this Purchase Schedule is referred to at times as the “Commitment Period”).
3. Commitment to Purchase and Sell Products.
4. Quantities. Notwithstanding anything in this Purchase Schedule or the balance of the Agreement to the contrary:
5. Case-Fill Standard.
Example: Seller was deficient in meeting the 98% Case Fill Rate on Products A and B in a Product Category by 10,000 net raw material pounds in June 2020, 15,000 net raw material pounds in August 2020 and 20,000 net raw material pounds in October 2020. Buyer achieved Minimum Forecast Accuracy for all calendar months with the deficient Case Fill Rate. Seller supplied all ordered quantities of Products C and D in the same Product Category. In November 2020, Buyer may elect to self-manufacture or purchase from a secondary source a Monthly Deficiency Quantity of 15,000 net raw material pounds of Products A and B. Buyer would not be able to self-manufacture or purchase from a secondary source any quantity of Products C and D.
6. Pricing.
The chart below identifies the respective Price Adjustments Dates and their applicable Base Measurement Periods and Current Measurement Periods:
PRICE ADJUSTMENT DATE | QURTERLY PRICE PERIOD | BASE MEASUREMENT PERIOD | CURRENT MEASUREMENT PERIOD |
January 1 | January 1 through March 31 | June through August of prior calendar year* | September through November of prior calendar year** |
April 1 | April 1 through June 30 | September through November of prior calendar year | December of prior calendar year and January and February of current calendar year |
July 1 | July 1 through September 30 | December of prior calendar year and January and February of current calendar year | March through May of current calendar year |
October 1 | October 1 through December 31 | March through May of current calendar year | June through August of current calendar year |
* For the first price adjustment on 01/01/2020, the Base Measurement Period will be July, August and September 2019.
** For the first price adjustment on 01/01/2020, the Current Measurement Period will be October and November 2019.
[*].
7. Product Specifications and Addition, Removal and Modification of Products.
8. Manufacture, Storage and Delivery of Ordered Products.
9. Tolled Assets.
10. Miscellaneous. This Purchase Schedule, the SOPs and the main body of the Agreement constitutes the entire agreement between the Parties with respect to the purchase and sale of the Products during the Commitment Period. This Agreement supersedes all prior and simultaneous representations, discussions, negotiations, letters, proposals, agreements and understandings, whether written or oral, with respect to this same subject matter. This Purchase Schedule may be executed in any number of counterparts, each of which shall be deemed an original as against the Party whose signature appears thereon, but all of which taken together shall constitute but one and the same instrument. Offer and acceptance of this Purchase Schedule may be made by e-mail, mail or other commercially reasonable means showing the signatures of an officer of the Parties.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE AND ATTACHMENTS FOLLOW
In witness whereof, Seller and Buyer have executed this Master Supply Agreement as of the Effective Date.
REYNOLDS CONSUMER PRODUCTS LLC, as Seller
By: /s/ Lance Mitchell
Lance Mitchell
Chief Executive Officer
PACTIV LLC, as Buyer
By: /s/ John McGrath
John McGrath
Chief Executive Officer
List of Attachments
Attachment 1 – Products and Initial Prices
Attachment 2 – Seller Manufacturing and Warehouse Facilities
Attachment 3 – Tolled Assets of Buyer in Seller Manufacturing Facilities
NON-COMPETE RESTRICTIONS DATED NOVEMBER 1, 2019
BETWEEN REYNOLDS CONSUMER PRODUCTS LLC AND PACTIV LLC
1. These Non-Compete Restrictions will form part of and supplement the Master Supply Agreement dated November 1, 2019 between Reynolds, as Seller, and Pactiv LLC, as Buyer, and the Master Supply Agreement dated November 1, 2019 between Pactiv, as Seller, and Reynolds, as Buyer (each an “MSA” and collectively the “MSAs”). Capitalized terms and phrases not otherwise defined in these Non-Compete Restrictions will have the same meaning ascribed to them in the respective MSAs. As used in these Non-Compete Restrictions, the phrase “Affiliate” means a direct or indirect subsidiary of a Party. A breach of these Non-Compete Restrictions by a Party or its Affiliate will represent a material breach of the MSAs. These Non-Compete Restrictions will commence on November 1, 2019 and end on the expiration or earlier termination of each of the MSAs.
2. The Parties and their respective Affiliates supply goods to some of the same customers in the United States of America, Canada and Mexico, but, because of their different business models, the Parties and their respective Affiliates do not currently compete with one another in the sale of those goods.
3. During the Term of the respective MSAs, Pactiv and its Affiliates will not sell products that Pactiv and its Affiliates sell Reynolds and its Affiliates under an MSA, nor goods that compete with those products, directly or through a distributor or other arrangement with a third-party, to groceries, supermarkets, convenience stores, mass merchants (including sales to Amazon and other e-commerce sites of goods for resale in individual consumer quantities bearing UPC codes on the exterior of the packaging), club stores (excluding Restaurant Depot, Smart & Final and Gordon Foodservice Marketplace or club store customers with similar business models) and other retail establishments in the United States of America and Canada for resale to consumers in those countries. Notwithstanding the preceding sentence, Pactiv and its Affiliates may manufacture goods in Mexico similar to the products that Pactiv and its Affiliates sell Reynolds and its Affiliates under an MSA, either directly or through a distributor or other arrangement with a third-party, and sell those goods to HEB and its affiliates in the United States of America and Canada for resale to consumers in those countries.
4. During the Term of the respective MSAs, Reynolds and its Affiliates will not sell products purchased under an MSA from Pactiv and its Affiliates, nor goods that compete with those products, either directly or through a distributor or other arrangement with a third-party, to businesses that operate restaurants and foodservice establishments, groceries, supermarkets, convenience stores, mass merchants (including sales to Amazon and other e-commerce sites of goods for resale in full case quantities bearing UPC codes on the exterior of the case), club stores and other retail establishments, and egg, meat, poultry, fish, produce, deli, bakery and other food suppliers and processors in the United States of America, Canada and Mexico for use by those businesses in preparing, packaging, selling or serving food for sale to consumers in those countries. By way of clarification, the preceding sentence will not preclude Reynolds and its Affiliates from selling Hefty tableware foam products that Pactiv and its Affiliates manufacture for Reynolds for its sale to Smart & Final and its affiliates in the United States of America.
5. During the Term of the respective MSAs, Reynolds and its Affiliates will not sell products that Reynolds and its Affiliates sell Pactiv and its Affiliates under an MSA, nor goods that compete with those products, directly or through a distributor or other arrangement with a third-party, to businesses that operate restaurants and foodservice establishments, groceries, supermarkets, convenience stores, mass merchants (including sales to Amazon and other e-commerce sites of goods for resale in full case quantities bearing UPC codes on the exterior of the case), club stores and other retail establishments, and egg, meat, poultry, fish, produce, deli, bakery and other food suppliers and processors in the United States of America, Canada and Mexico for use by those businesses in preparing, packaging, selling or serving food for sale to consumers in those countries.
6. During the Term of the respective MSAs, Pactiv and its Affiliates will not sell products purchased under an MSA from Reynolds and its Affiliates, nor goods that compete with those products, either directly or through a distributor or other arrangement with a third-party, to groceries, supermarkets, convenience stores, mass merchants (including sales to Amazon and other e-commerce sites of goods for resale in
individual consumer quantities bearing UPC codes on the exterior of the packaging), club stores (excluding Restaurant Depot, Smart & Final and Gordon Foodservice Marketplace or club store customers with similar business models) and other retail establishments in the United States of America and Canada for resale to consumers in those countries.
7. During the Term of the respective MSAs, Reynolds and its Affiliates will not sell cutlery, plates, containers, straws and cups made from plastic, paper or any other raw material aside from aluminum, either directly or through a distributor or other arrangement with a third-party, to (a) HEB and its affiliates in the United States of America and Canada for resale to consumers in those countries, or (b) groceries, supermarkets, convenience stores, mass merchants, club stores and other retail establishments in Mexico for resale to consumers in Mexico (“Mexico Retailers”). By way of clarification, the preceding sentence will not preclude Reynolds and its Affiliates from selling: (i) cutlery, plates, containers, straws and cups that Pactiv and its Affiliates manufacture for Reynolds for its sale to HEB and its affiliates in the United States of America and Canada and resale by HEB and its affiliates to consumers in those countries, or (ii) goods other than such cutlery, plates, containers, straws and cups to HEB and its affiliates in the United States of America and Canada, and Mexico Retailers in Mexico, for resale to consumers in the respective countries.
8. Notwithstanding the restrictions in the prior Section, if Reynolds or its Affiliate receive an opportunity with a Reynolds multinational customer to sell cutlery, plates, containers, straws and cups made from plastic, paper or any other raw material aside from aluminum, either directly or through a distributor or other arrangement with a third-party, to a Mexico Retailer owned, controlled and operated by the Reynolds multinational customer for resale to consumers in Mexico and Pactiv or its Affiliate is not currently selling the product(s) in question, directly or indirectly, to that Mexico Retailer (a “New Business Opportunity”), Reynolds will offer Pactiv the opportunity to supply the product(s) for the New Business Opportunity. In such a circumstance, the Parties will engage in a good faith negotiation and attempt to agree on the pricing and other terms for the purchase and sale of the product(s) in question for the New Business Opportunity. If the Parties are able to agree on the pricing and other terms for the purchase and sale of the product(s) in question for the New Business Opportunity, the Parties will sign a Purchase Schedule to the MSA under which Pactiv is Seller and Reynolds is Buyer memorializing the agreement for Pactiv to supply the product(s) for the New Business Opportunity. If the Parties are unable to agree on the pricing and other terms for the purchase and sale of the product(s) in question within thirty (30) days of Pactiv receiving notice from Reynolds of the New Business Opportunity, then Reynolds may elect to self-manufacture the product(s) in question for the New Business Opportunity or source those product(s) from a competing supplier for the New Business Opportunity. If Reynolds receives and wishes to accept an offer from a competing supplier to supply the product(s) in question for the New Business Opportunity and the competing offer is for a higher price than Pactiv’s last best offer to Reynolds, Pactiv will have a right of first refusal to match the pricing in the competitor’s offer and supply the product(s) for the New Business Opportunity. Before Reynolds or its Affiliate accepts a competitor’s offer to supply the product(s) in question for the New Business Opportunity, Reynolds will present Pactiv with a true, accurate and complete copy of the competitor’s offer. Pactiv will have thirty (30) days from receipt of the competitor’s offer in which to exercise Pactiv’s right of first refusal under this Section. If Pactiv’s exercises its right of first refusal by notifying Reynolds within the thirty (30) days period, the Parties will sign a Purchase Schedule to the MSA under which Pactiv is Seller and Reynolds is Buyer for the supply of product(s) for the New Business Opportunity at the pricing in the competitor’s offer. If Pactiv does not exercise its right of first refusal by notifying Reynolds within the thirty (30) days period, Reynolds may accept the competitor’s offer and purchase the product(s) in question from the competitor solely for the purpose of reselling them to the Mexico Retailer for the New Business Opportunity. Nothing in this Section will permit Reynolds or its Affiliates to sell cutlery, plates, containers, straws and cups made from plastic, paper or any other raw material aside from aluminum, either directly or through a distributor or other arrangement with a third-party, to businesses that operate restaurants and foodservice establishments, groceries, supermarkets, convenience stores, mass merchants, club stores and other retail establishments, and egg, meat, poultry, fish, produce, deli, bakery and other food suppliers and processors for use by those businesses in preparing, packaging, selling or serving food for sale to consumers in Mexico.
9. During the Term of the respective MSAs, Pactiv and its Affiliates will not sell aluminum foil or aluminum containers, either directly or through a distributor or other arrangement with a third-party, to Mexico
Retailers for resale to consumers in Mexico. By way of clarification, the preceding sentence will not preclude Seller and its Affiliates from selling goods other than such aluminum foil or aluminum containers to Mexico Retailers for resale to consumers in Mexico.
10. Except as provided in the prior Sections, nothing in these Restrictions or the MSAs will preclude or restrain the Parties and their Affiliates from being able to competing with one another in the United States of America, Canada, Mexico or any other country.
In witness whereof, Reynolds and Pactiv have executed these Non-Compete Restrictions as of November 1, 2019.
REYNOLDS CONSUMER PRODUCTS LLC PACTIV LLC
By: /s/ Lance Mitchell By: /s/ John McGrath
Lance Mitchell John McGrath
Chief Executive Officer Chief Executive Officer
Attachment 1
Products and Initial Prices
The Raw Material column in the attached chart uses the following acronyms to describe the primary raw material used to manufacture a product:
Seller will obtain average monthly market prices for each Raw Material from the following Raw Material Publications for use in calculating the price adjustments under this Purchase Schedule:
If organization that has been issuing the Raw Material Publication for a Raw Material relied upon by the Parties to determine quarterly price adjustments of Products under this Purchase Schedule announces that the organization will cease publishing such information or ceases publishing such information or otherwise materially changes the manner, method and frequency of collecting, analyzing, determining and publishing such information or the Raw Material Publication otherwise no longer reasonably reflects increases or decreases in the market price of the Raw Material, either Party may request a modification to this price adjustment mechanism by delivering written notice to the other Party. The Parties will negotiate in good faith and attempt to agree upon the modified price adjustment mechanism within thirty (30) days of the date of receipt of the request. If the Parties are unable to agree on the modified price adjustment mechanism by the end of the thirty (30) day negotiation period, either Party may elect to resolve the Dispute through mediation or litigation as provided in Section 11 of the Agreement. Until the Parties sign a written
amendment to this Agreement with a mutually acceptable modified price adjustment mechanism or until the Dispute over the modification to the price adjustment mechanism is resolved by entry of a final, unappealed and unappealable order of a court of competent jurisdiction, Seller may increase or decrease the price of a Product based on the change in the average actual monthly price per pound of the Raw Material of the Product over the applicable Base Measurement Period from the average actual monthly price per pound of the Raw Material of the Product over the applicable Current Measurement Period. Seller will not have to disclose its actual Raw Material costs to Buyer in such a circumstance. Upon request of Buyer, Seller will allow an independent auditor mutually acceptable to the Parties to review the actual Raw Material costs of Seller on a confidential basis for the relevant measurement period to confirm the accuracy of Seller’s calculation of the price adjustment.
Product Category | Product Number | Product Description | Seller Stock Product, Buyer Branded Product or Buyer Proprietary Product | Units Per Case | Raw Material Type | Net Raw Material Weight per Case in Pounds | Price Per Case in USD for Deliveries 11/01/2019 through 12/31/2019 | Annual Price Increase Percentage |
[*] | [*] | [*] | [*] | [*] | [*] | [*] | [*] | [*] |
HIPS Products: Notwithstanding anything in this Purchase Schedule or the Agreement to the contrary:
PET Products: Notwithstanding anything in this Purchase Schedule or the Agreement to the contrary:
End of Attachment
Attachment 2
Seller Manufacturing Facilities and Warehouse Facilities
Manufacturing Facility | Maximum Monthly Quantity of Product Category at Manufacturing Facility Available for Buyer in Net Raw Material Pounds (assumes similar product mix to product mix in 2019) |
Reynolds Consumer Products 777 Wheeling Road Wheeling, IL 60090 (847) 215-3230 | Pactiv Finished Goods: [*] lbs. |
Reynolds Consumer Products Louisville Foil Plant 2827 Hale Ave Louisville, KY 40211 (502) 775-4333 | Food Service Rolls (Bulk Rolls): [*] lbs. Interfold Product: [*] lbs. |
Select HIPS Products and PET Products may also be manufactured at Seller’s manufacturing facility in Huntersville, NC for Buyer. Please see last page of Attachment 1 for further details.
End of Attachment
Attachment 3
Tolled Assets of Buyer in Manufacturing Facilities of Seller
Tolled Asset Number | Tolled Asset Description | Manufacturing Facility |
[*] | [*] | [*] |
Buyer also has Tolled Assets in Seller’s manufacturing facility in Hunterville, NC. Buyer will be removing and relocating these Tolled Assets in 2020.
End of Attachment
AMENDMENT TO PURCHASE SCHEDULE
This Amendment dated as of January 15, 2022, to the Purchase Schedule dated November 1, 2019 to the Master Supply Agreement dated November 1, 2019 (“Agreement”) between Reynolds Consumer Products LLC (“Seller”) and Pactiv LLC (“Buyer”). The Parties agree as follows:
1. Capitalized terms and phrases not otherwise defined in this Amendment will have the same meaning ascribed to them in the Agreement (including the Purchase Schedule).
2. Section 6.b. is modified to add the following paragraph:
Notwithstanding anything hereinabove to the contrary, for the first calendar quarter of 2022 only, the Price Adjustment Date will be February 1, 2022. The Quarterly Price Period, the Base Measurement Period and the Current Measurement Period will not change. On or before February 15, 2022, the Parties shall agree upon a true-up adjustment amount for the period from January 1, 2022 through January 31, 2022. The true-up adjustment amount shall be the difference between (i) the price per case for a Product from January 1, 2022 through January 31, 2022 and (ii) what the price per case for a Product would have been had the Price Adjustment Date been January 1, 2022.
3. Section 6.c. is deleted in its entirety and replaced with the following:
Annual Price Increase. On January 1, 2020 and on January 1 of each subsequent calendar year of the Commitment Period, the price per case of a Product will be increased by the percentage in the “Annual Price Increase Percentage” column for the Product in the chart in Attachment 1; provided, however, that for the period from January 1, 2022 to December 31, 2022, the price per case of a Product will not be increased as provided above.
4. Except as set forth above, the terms of the Agreement, including the Purchase Schedule, remain in full force and effect.
5. This amendment may be executed in several counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by electronic signature, facsimile or scanned pages shall be effective as delivery of a manually executed counterpart to this amendment.
IN WITNESS WHEREOF, the Parties have executed this amendment as of the 15th day of January, 2022.
Pactiv LLC
By: /s/ Michael J. King
Name: Michael King
Title: Chief Executive Officer
Reynolds Consumer Products LLC
By: /s/ Lance Mitchell
Name: Lance Mitchell
Title: Chief Executive Officer
SECOND AMENDMENT TO PURCHASE SCHEDULE
This Second Amendment (the “Second Amendment”), dated as of March 31, 2023, amends that certain Purchase Schedule dated November 1, 2019 to the Master Supply Agreement dated November 1, 2019 (“Agreement”), as amended by that certain Amendment to Purchase Schedule dated January 15, 2022 (“First Amendment”), between Reynolds Consumer Products LLC (“Seller”) and Pactiv LLC (“Buyer”). The Parties agree as follows:
1. Definitions. Capitalized terms and phrases not otherwise defined in this Second Amendment will have the same meaning ascribed to them in the Agreement, including the Purchase Schedule.
2. Elimination of SOP References. Section 3 of the Agreement is hereby deleted, and all references to the SOPs in the Agreement shall be removed. The following references to the SOPs are removed from the Purchase Schedule:
a. “the SOPs” from Section 3(a)
b. Section 4(a)(3) to be deleted in its entirety;
c. “in the SOPs” from line 8 of Section 5(b);
d. “the SOPs” from line 11 and line 15 of Section 7(d); and
e. “the SOPs” from line 1 of Section 10.
3. Term Extension. Section 2 of the Purchase Schedule is amended and restated in its entirety as follows:
This Purchase Schedule will commence on the Effective Date and will end on the earlier of (a) December 31, 2024; or (b) an earlier termination date elected by a Party in a written notice delivered to the other Party as provided in Section 11(d) of the Agreement (the period of this Purchase Schedule is referred to at times as the “Commitment Period”), except that the Commitment Period with respect to aluminum Products sold by Seller to Buyer shall instead extend until the earlier of: (a) December 31, 2027; or (b) the earlier termination date elected by a Party in a written notice delivered to the other Party as provided in Section 11(d) of the Agreement.
4. Revised COLAs. Section 6(c) is deleted in its entirety and replaced with the following:
Cost of Living Adjustments for the Period through April 30, 2023. [*].
Payment for Third Party Aluminum Purchases by Buyer. The true up referred to above will be reduced by a credit of $[*], representing Seller paying to Buyer $[*] towards the $[*] spent by Buyer for the purchase of aluminum from third parties during the 2022 calendar year.
New Prices Beginning May 1, 2023. Attachment 4 to the Second Amendment to this Purchase Schedule sets forth the prices that shall apply for the sale of Products hereunder on and after May 1, 2023. [*].
Non Raw Material Price Adjustments Beginning [*]. Beginning [*], there will be [*] non-raw material price adjustments [*].
[*]. If the Parties are not able to agree on appropriate revisions to the Agreement following such discussions, then Seller shall have the right to terminate the Agreement on 30 days’ prior written notice if such negotiations do not produce an appropriate solution, in its sole discretion, within six months. Upon such termination, the only remaining liability of each Party to the other shall be for accrued and unpaid purchase price of Products delivered hereunder prior to such termination.
The chart below identifies the respective Adjustments Dates, Base Periods and Current Periods for non-Raw Material price adjustments:
ADJUSTMENT DATE | PRICE PERIOD | BASE PERIOD | CURRENT PERIOD |
[*] | [*] | [*] | [*] |
[*] | [*] | [*] | [*] |
Supplemental Price Adjustment. [*].
5. New Aluminum Production Schedule. Attachment 2 to this Second Amendment replaces Attachment 2 to the Agreement, with respect to polystyrene foam production as identified by product category by plant location.
6. Additional Aluminum Terms. Subject to the terms and conditions of the Agreement, including the limitations and exclusions in Section 4 of the Purchase Schedule, (i) during 2023, Buyer is required to purchase [*]% of its requirements of aluminum container Products and [*]% of its requirements of aluminum interfold/roll Products from Seller (provided, that aluminum container Products purchased from a third party vendor and used solely in connection with the qualification of such vendor and not for resale shall not be subject to this limitation), (ii) during 2024, Buyer is required to purchase [*]% of its requirements of aluminum container products and [*]% of its requirements of aluminum interfold/roll Products from Seller and (iii) during 2025 and subsequent years, Buyer is required to purchase [*]% of its requirements of aluminum interfold/roll Products from Seller ([*]), but Buyer reserves the right to purchase additional amounts of aluminum products beyond the amounts set forth on Attachment 2 from third parties or to self-manufacture; provided, however, Buyer shall be responsible for any raw materials, work in progress or finished goods inventory that are unique to the aluminum Products forecasted for purchase by Buyer (collectively, “WIP”). Buyer shall provide Seller with six months’ prior written notice if, in any given calendar year during the Commitment Period, it intends to purchase a materially lower share of its needs of any given Product category from Seller hereunder than it did during the prior year. Following any such reduction, Seller’s ongoing obligation to supply Buyer’s requirements shall be commensurately reduced for the remainder of the Commitment Period. Buyer shall provide Seller with nine months’ prior written notice if, in any given calendar year, it intends to purchase less than 50% of its requirements of aluminum container Products from Seller hereunder, and the Parties shall meet and discuss in good faith revisions to the pricing of Products hereunder to address absorption losses by Seller. If the Parties are not able to agree on appropriate revisions to the Agreement following repricing discussions under the immediately preceding sentence, then Seller shall have the right to terminate the Agreement on 180 days’ prior written notice if such negotiations do not produce an appropriate solution, in its sole discretion, within 60 days. Upon such termination, the only remaining liability of each Party to the other shall be for unpaid purchase price of Products delivered hereunder, and for WIP as provided above, in each case accrued prior to such termination.
7. Corrections to Attachments. On or before April 14, 2023, either Party may request changes to any of the Attachments to this Second Amendment if, in the reasonable opinion of the requesting Party, such changes are necessary to correct an error or clarify an ambiguity in the Attachments. The changes shall be effective if the non-requesting Party consents, but such consent may not be unreasonably withheld, conditioned or delayed.
8. No Other Modifications. Except as set forth above and in the First Amendment to the Restrictions, the terms of the Agreement, including the Purchase Schedule, as amended, remain in full force and effect.
9. Counterparts. This Second Amendment may be executed in several counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Second Amendment by electronic signature, facsimile or scanned pages shall be effective as delivery of a manually executed counterpart to this amendment.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties have executed this Second Amendment the 31st day of March, 2023.
Pactiv LLC
By: /s/ Michael J. King
Name: Michael King
Title: Chief Executive Officer
Reynolds Consumer Products LLC
By: /s/ V. Lance Mitchell
Name: Lance Mitchell
Title: Chief Executive Officer
ATTACHMENT 1
COLA TRUE-UP
Product | Increased Price Per Case | Credit Per Case for March and April 2023 |
See attached Excel. | As set forth under column H, entitled “Total” under tab “Attachment #1 RCP.” | As set forth under column H, entitled “Total” under tab “Attachment #1 RCP Credit.” |
Pursuant to Item 601(a)(5) of Regulation S-K under the Securities Exchange Act of 1934, as amended, the Excel file referred to in the above table has not been filed.
ATTACHMENT 2
ALUMINUM PRODUCTION AS IDENTIFIED BY PRODUCT CATEGORY BY PLANT LOCATION
See Attached Excel.
Attachment 2
Seller Manufacturing Facilities and Warehouse Facilities
Manufacturing Facility | Maximum Monthly Quantity of Product Category at Manufacturing Facility Available for Buyer in Net Raw Material Pounds (assumes similar product mix to product mix in 2019) |
Reynolds Consumer Products 777 Wheeling Road Wheeling, IL 60090 (847) 215-3230 | Pactiv Container Finished Goods: [*] lbs. per month |
Reynolds Consumer Products Louisville Foil Plant 2827 Hale Ave Louisville, KY 40211 (502) 775-4333 | Food Service Rolls (Bulk Rolls): [*] lbs. per month Interfold Product: [*] lbs. per month |
ATTACHMENT 3
NON-RAW MATERIAL COST ADJUSTMENT
[*]
ATTACHMENT 4
NEW PRICE SHEET
Product | New Price |
See attached Excel. | As set forth under column H, entitled “May 2023 Pricing” under tab “Attachment #4 RCP.” |
Pursuant to Item 601(a)(5) of Regulation S-K under the Securities Exchange Act of 1934, as amended, the Excel referred to in the above table has not been filed.
FIRST AMENDMENT TO NON-COMPETE RESTRICTIONS DATED NOVEMBER 1, 2019
BETWEEN REYNOLDS CONSUMER PRODUCTS LLC AND PACTIV LLC
This First Amendment is entered into as of March 31, 2023 and amends that certain set of Non-Compete Restrictions dated November 1, 2019 between Reynolds Consumer Products LLC and Pactiv LLC (“Restrictions”), which supplement that certain Master Supply Agreement dated November 1, 2019 between Pactiv, as Seller, and Reynolds, as Buyer, and that certain Master Supply Agreement dated November 1, 2019 between Reynolds, as Seller, and Pactiv, as Buyer (collectively the “MSAs”). The Parties agree as follows:
1. Capitalized terms and phrases not otherwise defined in this Amendment will have the same meaning ascribed to them in the Restrictions and the MSAs.
2. The following paragraph is added as a new Section 11 to the Restrictions:
11. Effective January 1, 2025, the Restrictions will apply only to [*] Products sold by Pactiv LLC or its Affiliates to Reynolds Consumer Products LLC or its Affiliates and [*] Products sold by Reynolds Consumer Products LLC to Pactiv LLC. Effective January 1, 2023, the Restrictions will not apply to PLA substrate Products sold by Pactiv LLC or its Affiliates to Reynolds Consumer Products LLC.
3. Except as set forth above, the terms of the MSAs, including the Purchase Schedule, and the Restrictions remain in full force and effect.
4. This First Amendment may be executed in several counterparts, each of which shall be deemed an original and all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this First Amendment by electronic signature, facsimile or scanned pages shall be effective as delivery of a manually executed counterpart to this amendment.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties have executed this First Amendment with an effective date of the 31st day of March 2023.
Pactiv LLC
By: /s/ Michael J. King
Name: Michael King
Title: Chief Executive Officer
Reynolds Consumer Products LLC
By: /s/ V. Lance Mitchell
Name: Lance Mitchell
Title: Chief Executive Officer