EXHIBIT 4.7
Agreement
on the Development and Supply of Multi-Use Plastic Crates
between
1. Schoeller Wavin Systems,Inc..................................................
- hereinafter: "SWS-INC." -
and
2. IFCO-U.S., L.L.C., Tampa, Florida...........................................
- hereinafter: "IFCO-US" -
Page 1
Contents
Preamble............................................................... 3
Part A. General..................................................... 4
I. Scope of Cooperation........................................ 4
II. Definitions................................................. 4
Part B. Development................................................. 6
I. Duties of SWS-INC........................................... 6
II. Duty to Cooperate of IFCO-US................................ 7
III. Inventions/Innovations/Intellectual Property Rights......... 7
IV. New Products and Improvements............................... 8
V. Reimbursement of Development Costs.......................... 9
Part C. Supply...................................................... 9
I. Purchase and Supply of IFCO-Products........................ 9
II. License to Certain Technology............................... 11
III. Preferable Supplier / Preferable Customer................... 11
IV. Pricing and Repurchasing.................................... 12
V. Most Favored Customer....................................... 14
VI. Payment Terms............................................... 14
VII. Specifications and Warranties............................... 15
VIII. Transfer of Risk............................................ 16
Part D. General..................................................... 16
I. Assignment.................................................. 16
II. Term........................................................ 16
III. Confidentiality............................................. 17
IV. Cooperation and Non-Compete................................. 18
V. Miscellaneous............................................... 18
Page 2
Preamble
1. On May 10, 1996, IFCO-U.S., L.L.C. ("IFCO-US") concluded a supply agreement
with Intertape Polymer Group Inc. ("IPG") under which IPG became the
exclusive supplier of rigid foldable transport produce containers for IFCO-
US. In a Contribution Agreement of March 16, 2000, IPG assigned,
transferred, delivered and conveyed all rights, title and interest in the
Supply Agreement of May 10, 1996 to SPI-U.S., Inc. ("SPI-US"), a wholly
owned subsidiary of IFCO Manufacturing, Inc. Also as of March 16, 2000,
IFCO Manufacturing, Inc. sold 100% of the issued and outstanding capital
stock in SPI-US to Schoeller Plast Industries GmbH ("SPI GmbH").
Thereafter, SPI-US was re-named to Schoeller Wavin System, Inc. ("SWS-
INC.").
SPI GmbH intends to sell, and Schoeller Wavin Systems N.V. ("SWS-N.V.")
intends to purchase 100 % of the issued and outstanding capital stock in
SWS-INC. The sale and purchase of stock is conditioned on the conclusion of
a new supply agreement between SWS-INC. and IFCO-US on terms and conditions
similar to those stipulated in the current supply agreement between
Schoeller Plast AG, a wholly owned subsidiary of SWS-N.V., and IFCO GmbH
(formerly known as IFCO International Food Container Organisation GmbH).
2. IFCO-US has its main field of business in the lease of multi-use plastic
crates and containers. IFCO-US is serving the North American Market in the
range of fresh food and dry goods. With "North American" it is meant that
the geographic destination of transport crates and/or containers is within
the United States of America ("USA") and Canada. The multi-use transport
container system used by IFCO-US has been developed in close cooperation
with SWS-INC. and its affiliates.
3. Compensation for the development work performed by SWS-INC. and its
subsidiaries shall be included in the purchase price of future orders.
Today, IFCO-US is a key customer of SWS-INC. and, vice versa, SWS-INC. is a
key supplier of IFCO-US. Rights for the system used by IFCO-US are
currently based on a license agreement between IFCO-US and IFCO
International Network Beteiligungsgesellschaft mbH (formerly known as
Schoeller International Logistics Beteiligungsgesellschaft mbH) dated March
19, 1996.
4. SWS-INC. and IFCO-US both wish to set up a successful development and
supply relationship. In particular, SWS-INC. shall develop for IFCO-US new
types of crates and shall work on improvements on existing crates. IFCO-US
shall become owner of such developments and new patents related to new
crates or further developments. The development services performed by SWS-
INC. and its subsidiaries shall be paid off by the purchase prices for
future orders over a certain period of time.
5. Nothing in this contract shall prohibit SWS-INC. from producing and selling
other products for multi-use-container pools, provided that SWS-INC. is
neither directly nor indirectly involved in the design or the development.
Page 3
NOW, THEREFORE, IFCO-US and SWS-INC. (hereinafter the "Parties") agree as
follows:
Part A. General
I. Scope of Cooperation
1. SWS-INC. shall further develop and improve the multi-use transport
container system for pooling applications for third party logistics by
order of IFCO-US, in accordance with specifications agreed among the
Parties from time to time. The multi-use transport container system is
intended for use for fresh food, in particular fruits, vegetables, fish and
meat.
2. SWS-INC. shall develop and improve multi-use transport containers for
pooling applications for third party logistics for dry goods in accordance
with specifications agreed among the Parties from time to time.
3. SWS-INC. shall transfer intellectual property rights related to New
Products or developments pursuant to this Agreement or on order of IFCO-US.
For a period of ten years, however, IFCO-US will exclusively order any New
Products from SWS-INC., only, subject to the terms and conditions of this
Agreement.
II. Definitions
For purposes of this Agreement, the following terms shall have the meanings
assigned to them below:
"Affiliate" means legally independent enterprises that in their internal
relationship are majority owned enterprises and enterprises with majority
interests ((S) 16 AktG (German Stock Corporations Act)), dependent and
governing ((S) 17 AktG), enterprises of the same group ((S) 18 AktG),
enterprises holding interests in one another ((S) 19 AktG) or parties of a
profit and loss share agreement ((S)(S) 291, 192 AktG).
"Breakage Rates" means the breakage rates set forth in Exhibit 1 for the
IFCO-Products marketed by IFCO-US at the time this Agreement is signed,
plus amendments thereto agreed upon by the Parties hereto from time to
time, as the case may be, e.g. for New Products or changes in IFCO-
Products.
"Comparable Product" has the meaning subscribed for it in Section C.III.1.
Page 4
"Contractual Patents" means the patents set forth in Exhibit 2, such lists
being amended from time to time in accordance with Section B.III.4.
"Cost Plus Formula" means the formula set forth in Section C.IV.1.d.
"Data" has the meaning subscribed for it in Section B.II.1.
"Developed Invention" means all Development Results that are protectable as
an intellectual property right, in particular as a patent.
"Development Results" means all technical knowledge, documentation,
information and other results (for the avoidance of doubt, such results
shall comprise inventions, improvements and/or innovations that are
protectable as an intellectual property right, in particular as a patent)
of SWS-INC.'s development for and on behalf of IFCO-US, as described in
Section B, including New Products, improvements and innovations to IFCO-
Products and New Products and inventions within the range of the multi-use
and/or returnable packaging systems, but without know-how relating to the
production process.
"IFCO-Products" means the multi-use transport crates for fresh food and dry
goods that can be used in pools for third party logistics to be supplied by
SWS-INC. to IFCO-US under license of the Contractual Patents, including but
not limited to the products listed in Exhibit 3, as amended by New Products
from time to time pursuant to Section B.IV.2. of this Agreement or as
otherwise amended by mutual agreement of the Parties, as the case may be.
"Introduction Period" has the meaning subscribed for it in Section C.IV.2.
"License Agreement" has the meaning ascribed to it in Section C.II.
"Manufacturing Costs" has the meaning subscribed for it in Section
C.IV.1.b.
"Minimum Resisting Period" means the time period the Products shall resist
to breakage in accordance with Section C.VII.2., such time being agreed
upon the Parties from time to time for New Products. For all Products
marketed by IFCO-US at the time this Agreement is signed, the Minimum
Resisting Period shall be a period of sixty (60) months, except for crates
that can be identified as participating on a time based lease where the
Minimum Resisting Period shall be one (1) year.
"New Products" has the meaning subscribed for it in Section B.IV.1.
"North America" means the USA and Canada in the geographical sense.
"North American Market" shall have the meaning subscribed for it in the
Preamble under no. 2.
Page 5
"Person" means any individual, partnership, corporation, trust, association
or other entity.
"Plan" means the annual purchase and supply plan to be agreed between the
Parties in accordance with Section C.I.2. on a rolling forecast basis.
"Products" means any IFCO-Products or New Products.
"Production Costs" has the meaning subscribed for it in Section C.IV.1.d.
"Purchase Price" means the price for IFCO-Products.
"Raw Material Price" has the meaning subscribed for it in Section C.IV.1.b.
"Repurchase Price" has the meaning subscribed for it in Section C.IV.3.
"Specifications" means the technical description of the IFCO-Products, as
provisionary contained in Exhibit 3a and provided in more detail by SWS-
INC. within 120 days after the signing of this Agreement and accepted by
IFCO-US, and as amended for New Products from time to time in accordance
with Section 6.
"Term of this Agreement" has the meaning ascribed to it in Section D.II.
"Third Party IFCO Product" has the meaning subscribed in Section C.III.1.
Part B. Development
I. Duties of SWS-INC.
1. SWS-INC. hereby commits itself to diligently seek improvements to IFCO-
Products and to deliver without undue delay the Development Results to
IFCO-US.
2. SWS-INC. furthermore commits itself to develop diligently potential
innovations and/or additional IFCO-Products for use in pools of returnable
crates for fresh food and dry goods in accordance with specifications
agreed upon the parties from time to time.
3. During the development, SWS-INC. shall pursue the goals of lightweight
construction, recyclability as well as the greatest possible stability and
durability.
4. SWS-INC. shall, without undue delay, inform IFCO-US on possible
improvements, innovations and the current development results. For the
Page 6
avoidance of doubt, the obligation for confidentiality, as provided in
Section D.III. shall apply.
II. Duty to Cooperate of IFCO-US
1. IFCO-US shall provide to SWS-INC. for its own use in writing any
information, documents, technical specifications, new requirements,
potential innovations or applications and experience reports that can
potentially lead to improvements of IFCO-Products. For the avoidance of
doubt, the obligation for confidentiality provided by Section D.III. shall
apply for such Data (hereinafter "Data") which IFCO-US possesses and which
is necessary for the performance of the development.
2. IFCO-US shall reasonably assist SWS-INC. in the development of new design
proposals.
3. IFCO-US shall not contract with any third party or place any order with a
third party for the development of any new design proposal without the
prior written consent of SWS-INC. However, SWS-INC. shall not withhold the
written consent for undue reason or delay.
III. Inventions/Innovations/ Intellectual Property Rights
1. SWS-INC. hereby commits itself to achieve Development Results which are
unencumbered by intellectual property rights of third parties. However,
SWS-INC. shall not be obliged to carry out a particular patent research.
2. In the event third-party intellectual property rights which oppose the
Development Results be known to SWS-INC., the latter must immediately
inform IFCO-US in writing thereof after receiving such knowledge and obtain
the decision of IFCO-US regarding the use or non-use thereof. Inventions
which were made by SWS-INC. prior to the start of the development work
hereunder and which have been registered or for which intellectual property
rights have been granted must also be disclosed in writing as soon as they
become relevant in the development work performed for IFCO-US.
3. Insofar as it be necessary, for the use of the Development Results, to use
inventions which were made by SWS-INC. prior to the start of the
development work to be performed hereunder which have been registered or
for which intellectual property rights have been granted, IFCO-US shall
receive a non-exclusive royalty-free license unlimited in time, but
restricted to the use of the Development Results. The license shall include
the power to grant sublicenses in case of either IFCO-US being entitled to
use an alternate supplier in
Page 7
accordance with Sections C.I.4. or C.VII.4., but only in connection
therewith, or the Term of this Agreement has ended, including the case of
early termination. In the event of such early termination by SWS-INC. for
which IFCO-US is responsible, however, SWS-INC. shall be entitled to a
license fee in the amount of 10% of the purchase price of the respective
Product for the remainder of the original ten (10) year Term of this
Agreement. The power to grant sublicenses, however, is subject to SWS-
INC.'s prior written consent, which shall not be unreasonably withheld.
4. In the event of a Developed Invention, SWS-INC. shall immediately have the
related patent(s) or other intellectual property right(s) registered or
otherwise protected in jurisdictions within North America at the expense of
IFCO-US. In particular, IFCO-US shall be exclusively entitled to any North
American patent derived from any IFCO-Product or Contractual Patent or for
a New Product. Any such new patent shall become a Contractual Patent. In
the event that IFCO-US so acquires a patent or other intellectual property
right for a Developed Invention or New Product, it shall grant to SWS-INC.
an exclusive license free of charge to manufacture the New Product for
IFCO-US based on said Developed Invention or said New Product, only for the
Term of this Agreement.
5. In the event that IFCO-US otherwise acquires a patent for a new product,
and is not entitled to use an alternate supplier in accordance with
Sections C.I.4., C.III.1. or C.VII.4., it shall grant to SWS-INC. an
exclusive license free of charge to use such patent for the manufacture of
said new product for IFCO-US, only for the Term of this Agreement;
provided, however, that the component of the Purchase Price according to
Section C.IV.1d (iiic) will be adjusted downwards to reflect a fair and
adequate portion of the research and development costs related to such
intellectual property right, which have not been incurred by SWS-INC.
6. During the Term of this Agreement, pursuant to any license granted to SWS-
INC. in Sections B.III.4 or B.III.5, SWS-INC. shall be entitled to use such
patents or other intellectual property rights, free of charge, for the
production of products for third parties that are not in any way
competitive to IFCO-US; provided, however, that the component of the
Purchase Price according to Section C.IV.1d (iiic) will be adjusted
downwards to reflect a fair and adequate portion of the research and
development costs related to such intellectual property right. If and when
such patent will be used for third party products, SWS-INC. shall without
undue delay inform IFCO-US of the use. At the end of the Term of this
Agreement (for the respective IFCO-Product), the license of SWS-INC. shall
become non-exclusive.
IV. New Products and Improvements
1. "New Products" are all products, that are either (i) products developed by
SWS-INC. for and on behalf of IFCO-US that are additional to IFCO-Products,
e.g.
Page 8
products having characteristics (other than size, colour and/or weight)
different from IFCO-Products, such characteristics being particularly
developed for certain goods or a certain range of goods, or (ii) products
(including, but not limited to IFCO-Products) improved by a Developed
Invention.
2. IFCO-US shall have the right to purchase New Products exclusively from SWS-
INC. and to market and sell New Products. New Products shall be governed by
the terms of this Agreement and incorporated in the term "IFCO-Products"
once IFCO-US has given notice in writing that it intends to market and sell
said New Product, provided, however, that such notice has been given
without undue delay and no later than three (3) months after a respective
offer (in writing) by SWS-INC. The foregoing notwithstanding, SWS-INC.
shall have the right to market New Products on a non-exclusive basis to
third parties, without paying any fees to IFCO-US, in the event that IFCO-
US fails to market such New Products successfully in accordance with the
mutually agreed marketing plan for the respective New Products within the
forty-eight (48) months immediately following their actual commercial
introduction. SWS-INC. shall fully cooperate with IFCO-US and undertake its
best efforts that IFCO-US will achieve the market plan.
3. If IFCO-US has, nevertheless, failed to meet the market plan, SWS-INC.
shall also be entitled to buy out all respective inventory of IFCO-US
relating to said New Product and to indemnify IFCO-US for all costs
occurred in connection with the marketing of said New Product. If SWS-INC.
exercises the above-mentioned right, the respective New Product shall no
longer be an IFCO-Product.
V. Reimbursement of Development Costs
The service charge for SWS-INC.'s development services shall be compensated
in terms of the Purchase Prices pursuant to Section C.IV. hereof. The
Parties acknowledge that, as a result, IFCO-US shall not directly pay any
amount for SWS-INC.'s development services, including, without limitation,
if and to the extent that (i) SWS-INC.'s development does not result in New
Products, or (ii) IFCO-US has not accepted to market such New Product.
Part C. Supply
I. Purchase and Supply of IFCO-Products
1. During the Term of this Agreement, subject to this Part C, SWS-INC. for the
North American Market will be the exclusive supplier for the IFCO-Products
to
Page 9
IFCO-US, and IFCO-US shall acquire the IFCO-Products from SWS-INC.
exclusively. SWS-INC. shall not, at any time during the Term of this
Agreement, offer to sell, market or sell any of the IFCO-Products to any
Person other than IFCO-US without the express prior written consent of
IFCO-US.
2. Prior to the beginning of each calendar year during the Term of this
Agreement, the Parties shall agree on a purchase and supply plan for the
IFCO-Products in the next calendar year (the "Plan"). Within the sixty (60)
day period immediately following the signing of this Agreement by the
Parties, the Parties shall agree in writing upon the Plan for calendar year
2000 and 2001. As long as the new plan is not in place, the provisions of
the last agreed Plan shall continue to apply. IFCO-US shall use all
reasonable efforts to purchase on a regular basis in accordance with the
Plan then in effect and advise SWS-INC. as early as practicable of any
expected deviations from such Plan. SWS-INC. shall deliver the IFCO-
Products ordered by IFCO-US in accordance with the Plan. The Parties
acknowledge that the Plan for any particular year represents a good faith
estimate of IFCO-US's projected requirements and does not constitute a
commitment of the part of IFCO-US to purchase all of such quantities. If
SWS-Inc. fails in material respect to perform its obligations under the
Plan (whether as to quantity or meeting the mutually agreed requirement,
then IFCO-US shall be entitled to seek an alternative source of supply of
IFCO-Products.
3. Actual orders shall be evidenced by an IFCO-US purchase order. IFCO-US
shall submit a written purchase order to SWS-INC. at least thirty (30)
calendar days prior to the shipment date specified in such purchase order.
The purchase order shall constitute a firm commitment by IFCO-US to
purchase the IFCO-Products in accordance with the terms of this Agreement.
The purchase order will include all information required by SWS-INC. to
perform the order. Any changes to the purchase orders must be in writing,
signed by IFCO-US and confirmed by SWS-INC.
4. In the event that SWS-INC. cannot fulfil any purchase order although such
order is according to the Plan, or if such order is not included in the
Plan and SWS-INC. has failed to use its best efforts to fulfil such order.
IFCO-US, at its option, may have such purchase orders filled by an
alternate supplier and SWS-INC. shall cooperate with and assist IFCO-US as
IFCO-US may reasonably request. SWS-INC. shall notify IFCO-US without undue
delay of its inability to perform the order. SWS-INC. hereby acknowledges
and agrees that (i) IFCO-US requires a reliable source of supply of the
IFCO-Products, and (ii) under the circumstances described above in this
Section C.I.4., IFCO will require that an alternate supplier be available
immediately. Therefore, within sixty (60) days after the signing of this
Agreement by the Parties, SWS-INC. will assist IFCO-US in the
identification or selection of an alternate supplier to act as a standby.
To the extent that SWS-INC. fails in material respect to perform its
obligations under the Plan (whether as to quantity or meeting the mutually
agreed requirements), and IFCO-US is entitled pursuant to this Section
C.I.4 to purchase IFCO-Products from an alternate supplier, IFCO-US, in
order to obtain such alternate supply, shall be entitled to place an order
for the minimum
Page 10
volume that is commercially reasonable under the applicable facts and
circumstances.
II. License to Certain Technology
If any of the Contractual Patents originally set forth in Exhibit 2 are
registered in the name of SWS-INC. or any Affiliate of SWS-INC., SWS-INC.
shall immediately cause any such Contractual Patent to be assigned and
transferred to IFCO-US. IFCO-US shall provide to SWS-INC. a royalty-free
license, unlimited in time, to practice and use the Contractual Patents to
manufacture and sell the IFCO-Products, which license shall be (i) for the
Term of this Agreement exclusive and (ii) after the Term of this Agreement,
non-exclusive, and shall be in accordance with the License Agreement
attached hereto as Exhibit 4 (the "License Agreement"). In the event,
however, that IFCO-US is entitled to use an alternate supplier in
accordance with Sections C.1.4, C.III.1 or C.VII.4, then, notwithstanding
the exclusive nature of the license, IFCO-US shall be entitled to license
the appropriate Contractual Patents or other intellectual property rights
to produce the IFCO-Products to the alternate supplier selected by IFCO-US,
such license being restricted, however, to the production of the respective
orders.
III. Preferable Supplier / Preferable Customer
1. If IFCO-US is interested to buy from a third party a new product for the
use in its multi-use-transport-crate pool for fresh food and dry goods
applications in third party logistics on a rental basis such product being
either (i) a product additional to IFCO-Products, e.g. a product having a
characteristic (other than size, colour and/or weight) different to IFCO-
Products, such characteristics being particularly developed for certain
goods or a certain range of goods, or (ii) a product improved by a third
party intellectual property right ("Third Party IFCO Product"), IFCO-US
shall notify SWS-INC. in writing of such intention and the terms and
conditions of the offer of such third party prior to the conclusion of any
binding commitments. Within a period of one (1) month after receipt of the
aforementioned notice, SWS-INC. shall be entitled to notify IFCO-US that
SWS-INC. is willing to deliver said Third Party IFCO Product (and has or
will be able to acquire all necessary rights to manufacture and deliver
said Third Party IFCO Product) or a competitive product with
specifications, characteristics and features comparable to the Third Party
Product as shall be reasonably determined by IFCO-US ("Comparable
Product"). Upon such notice by SWS-INC., the Third Party IFCO Product or
the Comparable Product shall become an IFCO-Product and SWS-INC. shall
deliver such IFCO-Product under the terms and conditions offered by the
third party for its Third Party IFCO Product, unless the product of SWS-
Inc. is superior as mutually agreed, starting three (3) months after the
respective notice by SWS-INC., at the latest.
Page 11
2. If SWS-INC. does not give the notice pursuant to Section C.III.1. within the
time period provided, IFCO-US shall be free to order the Third Party IFCO
Product from the third party.
3. If SWS-INC. gives notice to IFCO-US, within the aforementioned time period,
that SWS-INC. is currently unable to deliver the Third Party IFCO Product or
a Comparable Product but is interested in the supply, then IFCO-US shall be
entitled to order the Third Party IFCO Product from the third party.
Notwithstanding the above, IFCO-US shall use its best efforts, in
conjunction with the efforts of SWS-INC., to negotiate terms and conditions
between SWS-INC. and the third party that would allow SWS to take up such
production after twenty-four (24) months of supply by the third party and to
assist SWS-INC. to minimize the costs related to taking up such production.
Also, if SWS-INC. has successfully negotiated such terms and conditions with
the third party, SWS-INC. shall be entitled to request IFCO-US to have the
supply responsibility transferred from the third party to SWS-INC. at the
end of the twenty-four (24) month period on terms at least comparable to
those provided to IFCO-US by the third party; provided, however, that SWS-
INC. has given at least three (3) months notice to IFCO-U.S. and the third
party prior to the end of such twenty-four (24) month period. If the supply
responsibility is so transferred to SWS-INC., the Third Party IFCO Product
or a Comparable Product shall become an IFCO-Product, and SWS-INC. shall be
exclusively entitled, but also obligated to deliver, such new IFCO-Product
to IFCO-US thereafter for the Term of this Agreement.
4. SWS-INC. hereby grants a right of first refusal to IFCO-US for all products
that will be used in the multi-use transport pool for fresh food and dry
goods applications in third party logistics. If such products or packages
will be accepted by IFCO-US, they shall become an IFCO-Product,
respectively.
5. Notwithstanding the above SWS-INC. shall always be entitled to subcontract.
IV. Pricing and Repurchasing
1. The "Purchase Prices", freight to customer included shall be:
a) Until the end of the calendar year 2000 , SWS-INC. shall sell IFCO-
Products to IFCO-US at a price not greater than 2.25 US$/kg.
b) For calendar years 2001 through 2004, the purchase prices of the IFCO-
Products under this Agreement shall be as set forth in Exhibit 5 hereto.
The Purchase Price shall be adjusted if raw material prices including
pigments (the "Raw Material Price") on a calendar year average fall by
more than 15% or increase by more than 15% based on an industrial
index (such as ▇▇▇▇▇▇ Polymer Service). The calculation set forth in
Exhibit 5 is based on a Raw
Page 12
Material price of 0.87 US$/kg. An adjustment will also take place if the
total aggregate manufacturing costs (the "Manufacturing Costs") decrease
or increase more than 15% on a calendar year average basis. SWS-INC.
shall be required to prove such changes of cost by using industry
publications of indices. Any adjustment made shall be applied to the
price per kg proportionately.
c) Upon demand by IFCO-US, starting on 2008 Purchase Prices for the IFCO-
Products, other than those IFCO-Products for which the Introduction
Period has not yet expired, shall be calculated based on the Cost Plus
Formula (the "Cost Plus Formula") as defined in para. d) below. If this
demand to use the Cost Plus Formula is exercised by IFCO-US, prices for
IFCO-Products for the interim years 2005 to 2007 shall be calculated on
a graduated declining price schedule ranging from the fixed price in the
year 2004 as defined in para. b) to the Cost Plus Formula price in 2008.
The calculation basis for IFCO-Product Prices for the years 2005 to 2007
are illustrated in the Matrix attached as Exhibit 6.
d) For purposes of this Agreement, Cost Plus Formula means the market price
calculated using
(i) the average comparable custom moulding cost/kg in the North
American Market (to be reviewed on an annual basis by the
Parties) plus
(ii) raw material cost/kg plus
(iii) mutually agreed upon costs/kg for
a) production management
b) cleaning and transportation
c) reasonable and verifiable research and development costs
directly attributable to the respective IFCO-Products
- all the above costs in para. (i) to (iii) shall be
collectively referred to as "Production Costs" -
plus a profit margin of eight percent (8%) of the Production Costs.
e) The option under para. c) must be exercised between January 1, 2001 and
December 31, 2004. In the event IFCO-US does not exercise this option
during this period, the prices charged in 2004 pursuant to para. b)
shall continue to be applicable for the years 2005 and onward.
2. Notwithstanding the above, the Purchase Price of New Products to be
delivered by SWS-INC. to IFCO-US in the period agreed upon in the marketing
plan (the ,,Introduction Period,,) will be mutually agreed upon prior to
their commercial introduction and will include consideration of the
respective research and development costs. At the end of the Introduction
Period, for a period of four (4) calendar years the Purchase Price for such
New Product shall be determined in accordance with a matrix substantially
similar to the matrix contained in
Page 13
Exhibit 5 and adjusted in accordance with the procedure described in para
C.IV.1.b). The purchase price for the following three (3) calendar years
shall be calculated in accordance with the Cost Plus Formula on a gradually
declining basis as set forth in Section C.IV.1c, second sentence,
concerning the interim years. After these three years the prices shall be
calculated based on the Cost Plus Formula.
3. SWS-INC. shall repurchase from IFCO-US all recyclable materials from
defective or broken IFCO-Products produced by SWS-Inc. at a price (the
"Repurchase Price") of 0.87 US$/kg, provided these recyclable materials can
be used by SWS-INC. for the production of newly recycled products for IFCO-
US or other customers of SWS-INC. The Repurchase Price shall be adjusted at
any time, if the annual year average prices for the new raw material on the
market falls more than 15% below or increases more than 15% over the
Repurchase Price prior to such adjustment. In the event that SWS-INC.
cannot use the material for the production of newly recycled products for
IFCO-US or other customers of SWS-INC., then SWS-INC. shall repurchase such
regenerative materials at the then highest available price quoted in the
market for the relevant quantity in lieu of the price referred to herein
above. This obligation of SWS-INC. to repurchase excludes and covers all
other claims of IFCO-US concerning defects in quality against SWS-INC. with
the exception of the rejection rights pursuant to Section C.VII.
4. The prices indicated in above Section C.IV. shall be understood with VAT
still to be added in the respective amount provided by law.
V. Most Favored Customer
If during the Term of this Agreement, SWS-INC. offers to sell or sells any
IFCO-Product to any other customer at a price, terms and/or on contractual
conditions more favorable than those extended to IFCO-US, SWS-INC. shall
without undue delay notify IFCO-US of such more favorable price, term
and/or contractual conditions. Subject to the acceptance of IFCO-US, the
same more favorable price, terms and/or contractual conditions shall be
contents of this Agreement retroactively to the date they were offered to
the other customers. Nothing in this Section C.V. shall be deemed to
release SWS-INC. from its exclusive obligations to IFCO-US.
VI. Payment Terms
SWS-INC. shall invoice IFCO-US for IFCO-Products delivered to or picked-up
by or on behalf of IFCO-US at SWS-INC.'s normal invoicing intervals and
Page 14
payment shall be due within thirty (30) days of IFCO-US's receipt of the
applicable invoice. In the event that 60 days after production, which
production is based on a relevant purchase order from IFCO-US, no delivery
has taken place to IFCO-US, SWS-Inc. will invoice this production, and
IFCO-US will pay within 30 days after receipt of the applicable invoice.
VII. Specifications and Warranties
1. SWS-INC. warrants that the IFCO-Products supplied by SWS-INC. to IFCO-US
pursuant to this Agreement shall conform to the requirements as mutually
agreed. SWS-INC. shall deliver to IFCO-US within 120 days after the signing
of this Agreement detailed specifications (based on the requirements from
IFCO-US) to the IFCO-Products currently purchased by IFCO-US that shall,
upon acceptance by IFCO-US, become part of the Specifications. Also, SWS-
INC. shall deliver to IFCO-US such detailed specifications for every New
Product that will be marketed by IFCO-US prior to its agreed upon
commercial introduction, which shall, upon acceptance by IFCO-US, become
part of the Specifications.
2. SWS-INC. warrants that the IFCO-Products supplied by SWS-INC. to IFCO-US
pursuant to this Agreement shall conform, for the Minimum Resisting Period,
to the Breakage Rates (which take into consideration normal wear and tear)
during the Term of this Agreement as set forth in Exhibit 1. Testing
procedures will be jointly defined to check the conformance of manufactured
products with the requirements specified by IFCO-US, including, without
limitation, the Specifications, prior to delivery to IFCO-US. In addition,
SWS-INC. will work closely with IFCO-US to further strengthen the
durability of the IFCO-Products so that today's breakage rate resulting
from false handling will be reduced.
3. IFCO-US shall have the right to reject and not accept any delivery of IFCO-
Products that fails to meet the Specifications. IFCO-US's right of
rejection shall be exercised by delivery of written notice to SWS-INC.,
identifying the rejected products and the reason for rejection, provided
that any such rejection notice with respect to detectable defects by their
nature or by taking samples, shall be valid only if received by SWS-INC.
within fourteen (14) working days after delivery of the rejected IFCO-
Products. At IFCO-US's option, SWS-INC. shall use its best efforts, within
a reasonable amount of time after its receipt of any such notice of
rejection from IFCO-US, to correct the nonconformity and commence to ship
to IFCO Products meeting the Specifications. At IFCO-US's option, if IFCO-
US rejects the IFCO-Products, upon return thereof to SWS-INC. IFCO-US shall
receive a credit for the applicable invoice(s) to IFCO-US, or shall have
the right to demand the replacement of rejected IFCO-Products free of
charge. At SWS-INC.'s request, IFCO-US shall return all rejected IFCO-
Products to SWS-INC. at SWS-INC.'s sole cost and expense.
Page 15
4. SWS-INC. agrees to indemnify and hold IFCO-US harmless from and against
any and all claims relating to third party property infringements which
IFCO-US may suffer or incur relating to or arising out of, directly or
indirectly, the manufacture of the IFCO-Products. SWS-INC.'s obligation
to indemnify and hold harmless IFCO-US shall be limited to the
compensation of third party claims. Furthermore, if the claim of the
third party concerns an intellectual property right SWS-INC. shall use
its best efforts to get the third party intellectual property licensed at
reasonable expenses. If the grant of such license should not be possible,
SWS-INC. shall use its best efforts to change the respective product so
that the third party property right is no longer required. If and only if
such changes to a IFCO-Product are impossible, IFCO-US may have the
product supplied by the third party.
VIII. Transfer of Risk
Title and risks shall pass to IFCO-US upon the delivery of the IFCO-
Products to IFCO-US or at IFCO-US's designated delivery location FOB.
Part D. General
I. Assignment
Without the prior written consent of the other party, this Agreement
shall only be assignable to an Affiliate of the assigning Party and only
under the condition that in case of such assignment the assigning Party
guarantees the performance of the Agreement by the assignee.
II. Term
1. Except as provided otherwise herein, this Agreement shall commence on
March 22, 2000 and end on December 31, 2010 (the "Term of this
Agreement").
2. IFCO-US shall also be entitled to request SWS-INC. that the Term of this
Agreement be extended by an additional ten (10) years term with respect
to any and/or all of the Products, even for single ones. The same applies
for an extension of the Term of this Agreement after the expiration of
the original ten (10) years term for New Products. In any case of
extension according to this Section D.II.2., the Purchase Price for each
IFCO-Product where the Term of this Agreement will be extended, as the
case may be, at the end of the original Term of this Agreement for each
respective Product shall reduce by such
Page 16
portion of the Purchase Price that according to the Cost-Plus-Formula is
paid for research and development as provided by Section C.IV.1.d.(iii,
c)
3. Regardless of any extension of the Term of this Agreement, the
obligations set forth in Section B. shall terminate on December 31, 2010.
4. In addition to any other rights or remedies of the Parties set forth in
this Agreement, this Agreement may be terminated by either party for good
cause in which case the Term of this Agreement shall end for all
products. The Parties agree that a reason for termination due to good
cause shall be in particular if
a) bankruptcy proceedings have been opened against the shareholder, or
the opening of bankruptcy proceedings is denied due to lack of
assets,
b) a receiver or custodian is appointed for the other Party's business,
or
c) a material portion of the other Party's business is subject to
attachment or similar process and such attachment is in the process
of being realized.
5. In any event that either Party validly exercises a right for termination,
except SWS-INC. has terminated for good cause for which IFCO-US is
responsible, SWS-INC. shall fully cooperate and assist IFCO-US, including
providing a reasonable number of person hours, to effectuate the transfer
of all manufacturing technology relating to the IFCO-Products to an
alternate manufacturer designated by IFCO-US and accepted by SWS-INC.
This acceptance of SWS-INC. shall not be unreasonably withheld,
conditioned or delayed. In addition, effective as of the date of
termination, SWS-INC. shall sell and convey all rights in and to all
moulds used in the production of the IFCO-Products to IFCO at the lesser
of (i) fair market value determined by a neutral auditing company
mutually satisfactory to both Parties, or (ii) book value, in each case
as of the date of such sale and transfer.
III. Confidentiality
Each Party hereto agrees for the benefit of the other Party, its
successors and assigns, to maintain as confidential and secret all
information, technical data or knowledge relating to the IFCO-Products or
to the development of new IFCO-Products and except as expressly permitted
in this Agreement or otherwise required by law or regulation, not to use
or disclose any of such information, data or knowledge without the
written consent of the other Party. Any information, knowledge or
technical data which already is generally published and publicly
available at the time of disclosure or thereafter becomes generally
published and publicly available without violation of the other Party's
rights under this Section, and any information which was already in the
receiving Party's possession, as evidenced by written documentation,
prior to the disclosure of such information to the receiving Party by the
disclosing Party,
Page 17
shall not be deemed confidential for purposes of this Section. The
provisions of this Section shall survive expiration or termination of
this Agreement for a period of two (2) years after the effective date of
such termination.
IV. Cooperation and Non-Compete
1. The Parties agree fully to cooperate in good faith with regard to this
Agreement and their obligations constituted herein.
2. During the Term of this Agreement and, if this Agreement is terminated
for cause by IFCO-US for which SWS-INC. is responsible, for two (2) years
thereafter, without the prior written consent of IFCO-US, SWS-INC. shall
not permit any Affiliate or any of its successors in interest neither
directly nor indirectly (whether as a joint venturer, shareholder,
licensor, lessor, seller of bulk assets, agent, principal, independent
contractor or otherwise), to manufacture, furnish, assemble, print,
market, sell or distribute to any third party within North America any
IFCO-Product on its own behalf or on the behalf of a third party. In the
event SWS-INC. breaches this obligation, IFCO-US at its sole option may
either request SWS-INC. to pay liquidated damages in the amount of $US
250,000 or seek its actual damages.
3. For the Term of this Agreement and, if this Agreement is terminated for
good cause by SWS-INC. for which IFCO-US is responsible, for a period of
two (2) years thereafter, IFCO-US and its Affiliates will desist from
hiring any current employees of SWS-INC. or SWS-INC.'s Affiliates, and
neither IFCO-US nor its Affiliates shall encourage such employees to seek
employment with IFCO-US or its Affiliates. If IFCO-US nevertheless
knowingly hires any employee of SWS-INC. or its Affiliates in a leading
position or any employee having a particular know-how, SWS-INC. at its
sole option may either request an amount of $US 250,000 for education of
said employee or seek its actual damage.
4. For the Term of this Agreement and, if this Agreement is terminated for
good cause by IFCO-US for which SWS-INC. is responsible, for a period of
two (2) years thereafter, SWS-INC. and its Affiliates will desist from
hiring any current employees of IFCO-US or IFCO's Affiliates, and neither
SWS-INC. nor its Affiliates shall encourage such employees to seek
employment with SWS-INC. or its Affiliates. If SWS-INC. nevertheless
knowingly hires any employee of IFCO-US or its Affiliates in a leading
position or any employee having particular know-how, IFCO-US at its sole
option may either request an amount of $US 250,000 for education of said
employee or seek its actual damage.
V. Miscellaneous
Page 18
1. Notices. All notices with legal effect under this Agreement shall be in
writing and shall be made by hand delivery, facsimile, overnight mail or
registered mail, postage prepaid, return receipt requested, to the
following addresses:
(a) If to SWS-INC., to:
c/o Schoeller Wavin Systems Services GmbH
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone Number: ▇▇▇▇-▇▇ ▇▇ ▇▇▇ ▇
Facsimile Number: ▇▇▇▇-▇▇ ▇▇ ▇▇▇ ▇▇▇
Attention: Mr. Stefan Eylert
(b) If to IFCO-US, to:
▇/▇ ▇▇▇▇-▇.▇., ▇.▇.▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Telephone Number: ▇▇▇-▇▇▇ ▇▇▇ ▇▇▇▇
Facsimile Number: ▇▇▇-▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
With a copy to: ▇▇▇ ▇▇▇▇▇▇▇
or to such other address, facsimile number or addressee as shall be
furnished by a Party by notice sent writing in accordance with the
provisions of this Section D.V.1; and such notice shall be deemed to have
been given or made as of the date so delivered, if delivered personally;
when receipt is acknowledged, if sent by facsimile; one business day after
being sent, if sent by overnight mail for next morning delivery; and four
business days after so mailed, if sent by registered or certified mail.
2. Amendments. Any amendment or supplement to this Agreement, including this
clause, shall be effective only if it is in writing and signed by all of
the Parties hereto.
3. Entire Agreement. This Agreement contains the entire agreement between the
Parties pertaining to the subject matter hereof and supersedes all prior
agreements between the Parties with respect to such matters.
4. Effect of Invalidity of Certain Provisions. If any term or provision of
this Agreement shall be ineffective or unenforceable the Parties shall
agree on a
Page 19
valid provision which comes economically closest to the invalid provision
that shall replace such provision and this Agreement taken as a whole,
without rendering invalid or unenforceable the remaining terms and
provisions of this Agreement. In particular, if any provision should be
prohibited by North American or European antitrust law, then the Parties
shall mutually agree on a valid alternative which approximates as closely
as possible the economic objective of such prohibited provision and
together with the valid and enforceable part of this Agreement comes as
closely as possible to the economic contents, rights and obligations of
this Agreement, taken as a whole and including the invalid provisions. If
the rights of IFCO-US with regard to Developed Inventions and intellectual
property rights developed under Section B. of this Agreement should be
invalid, then IFCO-US shall be entitled for reimbursement of such portions
of purchase prices paid by IFCO-US for the development of such intellectual
property rights in the past, to the extent such intellectual property
rights were of importance with regard to the Purchase Prices for IFCO-
Products, except if SWS-INC. will notwithstanding of the invalidity of the
respective provision transfer the intellectual property rights to IFCO-US
waiving all rights for retransfer. Also, the Purchase Prices as of such day
shall reduce with the Cost Plus Formula no longer containing development
costs.
5. Descriptive Headings. The headings in this Agreement were included for
convenience of reference only and shall not affect in any way the meaning
or interpretation of this Agreement.
6. Language of Agreement. This Agreement is executed in English.
7. Applicable Law; Arbitration. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Florida, USA,
without giving effect to the conflict of laws principles thereof.
Notwithstanding this principle, the definition "Affiliated" (Section A.II.)
shall be determined pursuant to German Stock Corporation Law. All disputes
arising out of or in connection with this Agreement and its performance,
including its validity, shall be finally settled according to the
International Arbitration Rules of the American Arbitration Association
(AAA) without recourse to the ordinary courts of law. The Arbitration
Tribunal may also decide on the validity of this arbitration rule. The
language of the proceedings shall be English. The venue of the Arbitration
Tribunal shall be Tampa, Florida, USA.
8. This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute but one and the same instrument. Facsimile transmission of any
signed original document and/or retransmission of any signed facsimile
transmission will be deemed the same as delivery of an original. At the
request of any Party, the Parties will confirm facsimile transmission by
signing a duplicate original document.
Page 20
Executed as of September 27, 2000 to be effective as of March 22, 2000.
SCHOELLER WAVIN SYSTEMS, INC. IFCO-U.S., L.L.C.
By: /s/ Stefan Eylert By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------- -------------------------------
Name: Stefan Eylert Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------- ----------------------------
Title: President Title: President
------------------------ ---------------------------
Page 21
Exhibit 1
---------
Breakage Rates
1. Existing fleet (all current designs)
As reported by IFCO-US current breakage rates exceed 5%. It has been agreed upon
that through relevant training of IFCO-US' and customer's staff a reduction in
breakage will be achievable.
2. Crates Currently Being Produced
At the end of August 2000 a design change will be presented to IFCO-US. For all
crates based on old design produced after the effective date of the Agreement, a
maximum breakage rate of 4% is allowed. Any breakage in excess of 4% on the
crates will be reimbursed to IFCO-US on a full replacement basis (i.e., new
crate to replace broken crate). The breakage up to 4% will be reimbursed
determined by the price for recycled crates as specified in Section C.IV.3 of
the Agreement.
3. Crates with New Design
All crates with new design will have a maximum breakage rate of 1%. Any
breakage in excess of 1% will be reimbursed to IFCO-US on a replacement basis.
The breakage up to 1% will be reimbursed by the price for recycled crates as
specified in Section C.IV.3 of the Agreement.
4. Breakage Rate
The breakage rate has to be monitored at least on a weekly base by IFCO-US
operations. A relevant root cause analysis shall be included. SWS-INC. shall
receive monthly a copy of the newest analysis. This shall serve as one tool for
joint decisions on further design improvements.
5. Excessive Wear and Tear
IFCO-US will be responsible for damage to crates resulting from excessive abuse.
Normal wear and tear is included in the breakage rates set forth above. The
Parties will agree on standard handling procedures for the crates.
6. Delivery Test Specifications
Within 3 months after signing the Agreement, a set of test procedures will be
jointly developed and mutually agreed upon by SWS-INC. and IFCO-US. Products
will be tested according to these procedures prior to shipment.
Exhibit 2
Contractual Patents
US-Patent 5,398,834
US-Patent 5,850,936
US-Patent 6,073,790
21.09.00
Exhibit 3
List of current crates produced in the United States
610 - 1 P
613 - 1 P
616 - 1 P
618 - 1 P
618 - 1 Exp.
623 - 2 E
623 - P
628 - P
633 - P
-1-
Exhibit 4
---------
LICENSE AGREEMENT
THIS LICENSE AGREEMENT, is made and entered into as of .....................,
among IFCO-U.S., L.L.C. ("IFCO-US"), a company organized under the laws of
Delaware with offices at: Lincoln Center Suite 711, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, and Schoeller Wavin Systems, Inc. ("SWS"), a company
organized under the laws of Delaware with offices at: Lincoln Center Suite 711,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇. IFCO-US and SWS are sometimes
referred to hereinafter individually as "Party" and collectively as the
"Parties".
Preamble
--------
IFCO-US is holder of the Contractual Patents relating to the construction of
multi-use transport crates. SWS is an experienced manufacturer of retail grocery
containers. IFCO-US desires to have SWS manufacture retail grocery containers
using the Contractual Patents, which IFCO-US shall market and sell, and SWS is
willing to supply such products exclusively to IFCO-US. The conditions of such
supply are set forth in an Agreement on the Development and Supply of Multi-Use
Plastic Crates entered into between the Parties as of .......................,
and with retroactive effect as of ............................. ("Supply
Agreement"), of which this License Agreement is an integrated part. By this
License Agreement, IFCO-US grants to SWS a license under the Contractual Patents
to practice and use the Contractual Patents to manufacture such products on the
terms and conditions set forth herein.
NOW, THEREFORE, the Parties hereto, intending to be legally bound hereby, agree
as follows:
1. Definitions
-----------
For purposes of this Agreement, the following terms shall have the meanings
assigned to them below:
a. "IFCO-Products" means the multi-use transport crates for fresh food
and dry goods that can be used in pools for third party logistics to
be manufactured by SWS using the Contractual Patents owned by IFCO-US.
b. "Contractual Patents" means the patents as set forth in Exhibit 1
hereto, such Exhibit being amended from time to time in accordance
with the Supply Agreement.
c. "License" shall have the meaning ascribed to it in Section 2.a.
2. Grant of License
----------------
a. IFCO-US hereby grants SWS a license under the Contractual Patents to
-2-
practice and use the Contractual Patents on the terms and conditions
set forth herein ("License"). The License is limited to the
manufacturing of the IFCO-Products (as defined in the Supply
Agreement) as provided by the Supply Agreement.
b. The License shall be unlimited in time.
c. During the term of the Supply Agreement, the License shall be
exclusive to SWS; provided, however, that IFCO-US shall be entitled to
grant a license under the Contractual Patents to a third party if
IFCO-US is entitled to use a supplier other than SWS pursuant to the
terms of the Supply Agreement, but only in connection therewith.
d. After the termination of the Supply Agreement, the License shall be
non-exclusive to IFCO-US.
e. SWS shall not manufacture or deliver the IFCO-Products under the
Contractual Patents for any third party other than IFCO-US without the
express prior written consent of IFCO-US.
3. Marking
-------
SWS will ▇▇▇▇ the IFCO-Products with "manufactured under the license of
IFCO". SWS shall not have the right to add its own company name or its own
trademark.
4. License Fee
-----------
The license is royalty free as far as the IFCO-Products are destined for
IFCO-US.
5. Term
----
This Agreement comes into force as of the date first written above and
expires, with respect to any particular Contractual Patent, on the earlier
of (i) the expiry date, as extended or renewed, of the Contractual Patent
or (ii) any successful challenge to the validity of the Contractual Patent.
6. Miscellaneous
-------------
The provisions of the Supply Agreement shall apply as well to this License
Agreement. In case of contradiction, the provisions of the Supply Agreement
prevail.
[Remainder of page intentionally left blank.]
-3-
IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of
the date first above written.
SCHOELLER WAVIN SYSTEMS, INC. IFCO-U.S., L.L.C.
By:____________________________ By:___________________________
Name:__________________________ Name:_________________________
Title:_________________________ Title:________________________
Exhibit 5
Prices for IFCO Crates
-----------------------------------------------------------------------------
Crate weight weight US price
lb kg US$
@$2,25/kg
-----------------------------------------------------------------------------
610 2.30 1.0455 2.35
-----------------------------------------------------------------------------
613 2.50 1.1364 2.56
-----------------------------------------------------------------------------
616 2.90 1.3182 2.97
-----------------------------------------------------------------------------
618P 3.20 1.4545 3.28
-----------------------------------------------------------------------------
618Export 3.20 1.4545 3.28
-----------------------------------------------------------------------------
623 (old) 3.90 1.7727 3.99
-----------------------------------------------------------------------------
623 (new) 4.78 2.1727 4.89
-----------------------------------------------------------------------------
628 (new) 5.50 2.5000 5.63
-----------------------------------------------------------------------------
633 (new) 6.25 2.8409 6.40
-----------------------------------------------------------------------------
Exhibit 6
[GRAPH]
a) Price 2,25 US$/kg
b1), b2) price adjustments if required
c) Volume based price decrease
Minimum volumes 2005: 15 million
2006: 16 million
2007: 17 million
d) Price based on cost plus formula