Exhibit 10.4
METAL SUPPLY AGREEMENT
between
NOVELIS INC.
(as Purchaser)
and
ALCAN INC.
(as Supplier)
FOR THE SUPPLY OF SHEET INGOT IN NORTH AMERICA
DATED DECEMBER ____, 2004, WITH EFFECT AS OF THE EFFECTIVE DATE
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION...........................................................................2
2. METAL...................................................................................................10
3. FORCE MAJEURE...........................................................................................17
4. ASSIGNMENT..............................................................................................19
5. TERM AND TERMINATION....................................................................................20
6. EVENTS OF DEFAULT.......................................................................................21
7. REPRESENTATIONS AND WARRANTIES..........................................................................22
8. CONFIDENTIALITY.........................................................................................22
9. DISPUTE RESOLUTION......................................................................................22
10. MISCELLANEOUS...........................................................................................22
SCHEDULES
1 Product Premium
2 Metal Specifications
3. Contract Year 1 Quantities
4. Shipment and Delivery Performance
METAL SUPPLY AGREEMENT
THIS AGREEMENT entered into in the City of Montreal, Province of Quebec, is
dated December ____, 2004, with effect as of the Effective Date.
BETWEEN: NOVELIS INC., a corporation incorporated under the Canada
Business Corporations Act ("NOVELIS" or the "PURCHASER");
AND: ALCAN INC., a corporation organized under the Canada Business
Corporations Act ("ALCAN" or the "SUPPLIER").
RECITALS:
WHEREAS Alcan and Novelis have entered into a Separation Agreement pursuant to
which they set out the terms and conditions relating to the separation of the
Separated Businesses from the Remaining Alcan Businesses (each as defined
therein), such that the Separated Businesses are to be held, as at the Effective
Time (as defined therein), directly or indirectly, by Novelis (such agreement,
as amended, restated or modified from time to time, the "SEPARATION AGREEMENT").
-2-
WHEREAS the Supplier wishes to supply, and the Purchaser wishes to purchase,
subject to the terms and conditions of this Agreement, Metal (as defined below)
required by the Purchaser at the Delivery Sites (as defined below).
WHEREAS the Parties have entered into this Agreement in order to set forth such
terms and conditions.
NOW THEREFORE, in consideration of the mutual agreements, covenants and other
provisions set forth in this Agreement, the Parties hereby agree as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
For the purposes of this Agreement, the following terms and expressions
and variations thereof shall, unless another meaning is clearly
required in the context, have the meanings specified or referred to in
this Section 1.1:
"AFFECTED PARTY" has the meaning set forth in Section 3.1.
"AFFILIATE" of any Person means any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with
such first Person as of the date on which or at any time during the
period for when such determination is being made. For purposes of this
definition, "CONTROL" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting
securities or other interests, by contract or otherwise and the terms
"CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.
"AGREEMENT" means this Metal Supply Agreement, including all of the
Schedules hereto.
"ALCAN" means Alcan Inc.
"ALCAN GROUP" means Alcan and its Subsidiaries from time to time on and
after the Effective Date.
"ANNUAL BASE QUANTITY" means
(i) in respect of Contract Year 1, *** Tonnes,
(ii) in respect of Contract Year 2, *** Tonnes,
(iii) in respect of Contract Year 3, *** Tonnes (or such
other quantity as may be agreed in writing by the
Parties prior to September 30, 2005,
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-3-
provided such quantity shall be greater than or equal
to *** Tonnes and less than or equal to *** Tonnes),
and
(iv) in respect of each of Contract Year 4 to Contract
Year ***, inclusive, such amount, in Tonnes, in
respect of each Contract Year, (a) as may be agreed
to by the Parties during the first 6 months of
Contract Year 2 or (b) if the Parties have failed to
reach agreement with respect to such amount during
the first 6 months of Contract Year 2, and a Party
has given 18 months notice prior to the commencement
of a Contract Year to the other Parties hereto that
it wishes to reduce the Annual Base Quantity by no
more than ***% of the then current Annual Base
Quantity, the amount so notified by such Party, or
(c) if the Parties have failed to reach agreement
during the first 6 months of Contract Year 2 and no
Party has given a notice in accordance with (b)
above, an amount which is equal to the Annual Base
Quantity in respect of the preceding Contract Year,
subject to any reduction in accordance with Section 2.1(c).
"ANNUAL ORDER QUANTITY" means,
(i) in respect of Contract Year 1, a quantity greater
than *** Tonnes and less than *** Tonnes,
(ii) in respect of Contract Year 2, a quantity greater
than *** Tonnes and less than *** Tonnes,
(iii) in respect of Contract Year 3, a quantity to be
agreed on by the Parties in writing prior to
September 30, 2005, which quantity is greater than
the Annual Base Quantity for Contract Year 3 minus
*** Tonnes and less than the Annual Base Quantity for
Contract Year 3 plus *** Tonnes, and
(iv) in respect of each Contract Year from and after
Contract Year 4, to Contract Year ***%, inclusive, a
quantity greater than *** of the Annual Base Quantity
for such Contract Year and less than or equal to ***%
of the Annual Base Quantity for such Contract Year,
which quantity, in each case, is notified by the Purchaser to
the Supplier pursuant to Section 2.6(i).
"APPLICABLE LAW" means any applicable law, rule or regulation of any
Governmental Authority or any outstanding order, judgment, injunction,
ruling or decree by any Governmental Authority.
"APPLICABLE LME DISCOUNT PERCENTAGE" means, for each of Contract Year 1
to Contract Year ***, inclusive, ***%, and for any Contract Year from
and after
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-4-
Contract Year ***, such percentage as may be agreed to by the Parties
in connection with any extension of the Term pursuant to Section 5.3.
"▇▇▇▇ OF LADING DATE" means the date of the ▇▇▇▇ of lading representing
Metal cargo to be delivered under this Agreement.
"BUSINESS CONCERN" means any corporation, company, limited liability
company, partnership, joint venture, trust, unincorporated association
or any other form of association.
"BUSINESS DAY" means any day excluding (i) Saturday, Sunday and any
other day which, in the City of Montreal (Canada) or in the City of New
York (United States), is a legal holiday, or (ii) a day on which banks
are authorized by Applicable Law to close in the city of Montreal
(Canada) or in the city of New York (United States).
"COMMERCIALLY REASONABLE EFFORTS" means the efforts that a reasonable
and prudent Person desirous of achieving a business result would use in
similar circumstances to ensure that such result is achieved as
expeditiously as possible in the context of commercial relations of the
type contemplated in this Agreement; provided, however, that an
obligation to use Commercially Reasonable Efforts under this Agreement
does not require the Person subject to that obligation to assume any
material obligations or pay any material amounts to a Third Party or
take actions that would reduce the benefits intended to be obtained by
such Person under this Agreement.
"CONSENT" means any approval, consent, ratification, waiver or other
authorization.
"CONSULTATION PERIOD" has the meaning set forth in Section 2.5.
"CONTRACT PRICE" means, for each Tonne of Metal sold and purchased
hereunder in any month, the aggregate of the following:
(i) the Midwest Price calculated for such month,
(ii) minus the Applicable LME Discount Percentage of the
LME 3-Month Aluminum Price for such month,
(iii) plus the Product Premium in effect in such month,
(iv) minus the Logistics Discount/Premium Amount
applicable in such month (in case of supply to
Oswego) or plus the Logistics Discount/Premium Amount
applicable in such month (in case of supply to
▇▇▇▇▇),
(v) plus the Cut Premium, if any, applicable to such
Metal, and
(vi) plus the Small Quantity Premium, if any, applicable
to such Metal;
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-5-
such amount shall be rounded upwards to the nearest Dollar.
"CONTRACT YEAR" means (a) initially the period commencing on the
Effective Date and ending on the last day of the calendar year in which
the Effective Date occurs (such initial period being "CONTRACT YEAR 1")
and (b) thereafter, each successive period consisting of twelve
calendar months (the first such period being "CONTRACT YEAR 2"),
provided that the final Contract Year shall end on the last day of the
Term.
"CPT" means, to the extent not inconsistent with the provisions of this
Agreement, CPT as defined in Incoterms 2000, published by the ICC,
Paris, France, as amended from time to time.
"CUT PREMIUM" means, in respect of each Tonne of Metal supplied
hereunder, an amount equal to (i) $*** per Tonne for one butt, or (ii)
$*** per Tonne for two butts; provided that Cut Premium is only
applicable if the Purchaser has requested, in the Firm Order relating
to the applicable supply of Metal, that the Supplier remove butts of
the supplied Metal.
"DEFAULT INTEREST RATE" means the greater of ***% per annum or the
Prime Rate plus ***% per annum, but in no event shall the Default
Interest Rate exceed the maximum rate of interest permitted by
Applicable Law.
"DEFAULTING PARTY" has the meaning set forth in Section 6.
"DELIVERY SITE" means any of the following facilities of the Purchaser,
as specified, in respect of each shipment of Metal hereunder in the
Firm Orders provided by the Purchaser hereunder:
(i) Oswego Plant, Oswego, New York;
(ii) ▇▇▇▇▇ Aluminum, Russelville, Kentucky; or
(iii) such other facilities of the Purchaser as may be
agreed to by the Supplier.
"DISPUTES" has the meaning set forth in Section 9.1.
"DOLLARS" or "$" means the lawful currency of the United States of
America.
"EFFECTIVE DATE" means the "Effective Date" as defined in the
Separation Agreement.
"ESTIMATED ANNUAL CAPACITY" has the meaning set out in Section
2.4(b)(i), subject to any adjustment pursuant to Section 2.5.
"ESTIMATED ANNUAL ORDER QUANTITY" has the meaning set out in Section
2.3(b)(i), subject to any adjustment pursuant to Section 2.5.
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-6-
"ESTIMATED MONTHLY CAPACITY" has the meaning set out in Section
2.4(b)(ii), subject to any adjustment pursuant to Section 2.5.
"ESTIMATED MONTHLY CAPACITY UPDATE" has the meaning set forth in
Section 2.7(a).
"ESTIMATED MONTHLY DEMAND" has the meaning set out in Section
2.3(b)(ii), subject to any adjustment pursuant to Section 2.5, Section
2.6(ii) or Section 2.7(b)(ii).
"EVENT OF DEFAULT" has the meaning set forth in Section 6.
"FIRM ORDER" has the meaning set forth in Section 2.7(b)(i).
"FORCE MAJEURE" has the meaning set forth in Section 3.2.
"GOVERNMENTAL AUTHORITY" means any court, arbitration panel,
governmental or regulatory authority, agency, stock exchange,
commission or body.
"GOVERNMENTAL AUTHORIZATION" means any Consent, license, certificate,
franchise, registration or permit issued, granted, given or otherwise
made available by, or under the authority of, any Governmental
Authority or pursuant to any Applicable Law.
"ICC" means the International Chamber of Commerce.
"INCOTERMS 2000" means the set of international rules updated in the
year 2000 for the interpretation of the most commonly used trade terms
for foreign trade, as published by the ICC.
"LIABILITIES" has the meaning set forth in the Separation Agreement.
"LME 3-MONTH ALUMINUM PRICE" for any calendar month means the
arithmetic average LME 3-Month seller's price for primary high grade
aluminum, as published in Metal Bulletin on each day during the
calendar month preceding such calendar month or as otherwise determined
pursuant to Section 2.10(b). For avoidance of doubt, the LME 3-Month
Aluminum Price for the month of April will be based on aluminum prices
published during the month of March.
"LME" means the London Metal Exchange.
"LOGISTICS DISCOUNT/PREMIUM AMOUNT" means, for each of Contract Year 1
to Contract Year ***, inclusive, (i) in respect of any supply to
Oswego, a discount of $*** per Tonne and (ii) in respect of any
supply to ▇▇▇▇▇, a surcharge of $*** per Tonne, and for any Contract
Year from and after Contract Year ***, such amount as may be agreed to
by the Parties in connection with any extension of the Term pursuant to
Section 5.3.
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-7-
"MAXIMUM ANNUAL SUPPLY OBLIGATION" means:
(i) in respect of Contract Year 1, *** Tonnes,
(ii) in respect of Contract Year 2, *** Tonnes,
(iii) in respect of Contract Year 3, *** Tonnes, and
(iv) in respect of each Contract Year from and after
Contract Year 4 to Contract Year ***, inclusive, the
maximum amount of the permitted range of the Annual
Order Quantity for such Contract Year.
"METAL" means aluminum sheet ingot having the specifications set forth
in SCHEDULE 2.
"MIDWEST PRICE" for any calendar month means the arithmetic average of
the mid-west transaction prices for primary high grade aluminum, as
published in Metals Week on each day during the calendar month
preceding such calendar month or as otherwise determined pursuant to
Section 2.10(b). As an example, the Midwest Price for the month of
April will be based on metal prices published during the month of
March.
"MINIMUM ANNUAL PURCHASE QUANTITY" means:
(i) in respect of Contract Year 1, *** Tonnes,
(ii) in respect of Contract Year 2, *** Tonnes,
(iii) in respect of Contract Year 3, *** Tonnes, and
(iv) in respect of each Contract Year from and after
Contract Year 4 to Contract Year ***, inclusive, the
minimum amount of the permitted range of the Annual
Order Quantity for such Contract Year.
"MONTH M1" has the meaning set forth in Section 2.7(b)(i).
"MONTHLY OFFTAKE QUOTE" has the meaning set out in Section 2.7(b).
"NOVELIS" means Novelis Inc.
"NOVELIS GROUP" means Novelis Inc. and its Subsidiaries from time to
time on and after the Effective Date.
"PARTY" means each of the Purchaser and the Supplier as a party to this
Agreement and "PARTIES" means both of them.
"PERSON" means any individual, Business Concern or Governmental
Authority.
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-8-
"PRIME RATE" means the floating rate of interest established from time
to time by the Royal Bank of Canada (the "BANK") as the reference rate
of interest the Bank will use to determine rates of interest payable by
its borrowers for commercial loans denominated in Dollars and made by
the Bank to such borrowers in Canada and designated by the Bank as its
"prime rate" and which shall change from time to time as changed by the
Bank.
"PRODUCT PREMIUM" means,
(i) in respect of Metal supplied hereunder from and after
January 1, 2005 to June 30, 2005, the premiums set
out in SCHEDULE 1;
(ii) in respect of Metal supplied hereunder during the
period from and after July 1, 2005 to June 30, 2006,
the premium identified in paragraph (i) above,
subject to adjustment in accordance with the
mechanism described in the second part of SCHEDULE 1,
and
(iii) in respect of Metal supplied hereunder at any time
from and after July 1, 2006, such amount, as adjusted
on July 1 in each Contract Year by adding to the then
applicable Product Premium an amount equal to such
percentage of the then applicable Product Premium as
is equal to 1/2 the percentage variation in the US
CPI that has taken place between January 1 and
December 31 in the immediately preceding calendar
year,
provided that Product Premium payable in respect of Metal in the 5XXX
alloy series will be adjusted on January 1, 2005, July 1, 2005 and
January 1, 2006 based on actual magnesium prices paid by the Supplier
during the six month period immediately preceding the date of
adjustment (subject to the application of Section 2.10(c).
"PURCHASER" has the meaning set forth in the Preamble to this
Agreement.
"SALES TAX" means any sales, use, consumption, goods and services,
value added or similar tax, duty or charge imposed by a Governmental
Authority pursuant to Applicable Law.
"SEPARATION AGREEMENT" has the meaning set out in the Preamble to this
Agreement.
"SMALL QUANTITY PREMIUM" means an amount equal to $*** per Tonne,
payable in respect of supplies hereunder where the alloy size
combination ordered by the Purchaser in any Firm Order is under the
lesser of 100 Tonnes or one furnace load.
"SPECIFICATIONS" means specifications for Metal as set out in SCHEDULE
2.
"SUBSIDIARY" of any Person means any corporation, partnership, limited
liability entity, joint venture or other organization, whether
incorporated or unincorporated, of
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-9-
which a majority of the total voting power of capital stock or other
interests entitled (without the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof, is at the
time owned or controlled, directly or indirectly, by such Person.
"SUPPLIER" has the meaning set forth in the Preamble to this Agreement.
"SUPPLIER FACILITIES" means the facilities of the Supplier located in
any of the following locations, to be selected at the Supplier's
option:
(i) Laterriere,
(ii) Grand Baie,
(iii) Becancour,
(iv) Kitimat,
(v) or such other locations as may be agreed to by the
Purchaser in accordance with Section 2.1(b).
"SUPPLY SCHEDULE" means in respect of each Contract Year, the notice of
Estimated Annual Capacity for such Contract Year and Estimated Monthly
Capacity in respect of each calendar month therein, delivered by the
Supplier pursuant to Section 2.4(b).
"TERM" has the meaning set forth in Section 5.2.
"TERMINATING PARTY" has the meaning set forth in Section 6.
"THIRD PARTY" means a Person that is not a Party to this Agreement,
other than a member or an Affiliate of Alcan Group or a member or an
Affiliate of Novelis Group.
"THIRD PARTY CLAIM" has the meaning set forth in the Separation
Agreement.
"TONNE" means 1,000 kilograms.
"US CPI" means the Consumer Price Index for All Urban Consumers, as
published monthly by the Bureau of Labor Statistics of the U.S.
Department of Labor.
1.2 CURRENCY
All references to currency herein are to Dollars unless otherwise
specified.
-10-
1.3 VIENNA CONVENTION
The Parties agree that the terms of the United Nations Convention
(Vienna Convention) on Contracts for the International Sale of Goods
(1980) shall not apply to this Agreement or the obligations of the
Parties hereunder.
2. METAL
2.1 SUPPLY AND SALE BY THE SUPPLIER
(a) Subject to the terms and conditions of this Agreement,
beginning on the Effective Date and continuing throughout the
Term of this Agreement, the Supplier shall supply and sell to
the Purchaser "CPT the applicable Delivery Site" the
quantities of Metal determined in accordance with this
Agreement.
(b) The Supplier shall supply Metal from a Supplier Facility of
the Supplier's choosing or from such other sources and
locations as may be agreed by the Parties. If the Supplier
wishes at any time to deliver Metal hereunder to the Purchaser
from a source other than the facilities named in the
definition of "Supplier Facilities" herein, it may do so
provided such Metal complies with the Specifications and the
Purchaser has confirmed in writing that the source of such
Metal is acceptable to it. The Purchaser shall act reasonably
in providing such confirmation.
(c) The quantity of Metal which the Purchaser agrees to purchase
and the Supplier agrees to supply hereunder shall be subject
to reduction on a pro rata basis in the event the Supplier
provides notice to the Purchaser that one of the Supplier
Facilities owned by the Supplier has been temporarily or
permanently shut down by the Supplier, provided such shut down
has occurred as a result of a good faith decision by the
Supplier that the continued operation of such Supplier
Facility would be uneconomic or otherwise unviable or non
value-maximizing for the Supplier. This reduction shall be for
such quantity as may be agreed by the Parties and, failing
agreement, shall be for such quantity as is equal to the
Estimated Annual Capacity for the applicable Contract Year
multiplied by the annual reduction capacity of the Supplier
Facilities that have been shut down, and divided by the total
annual production capacity of all Supplier Facilities before
giving effect to the shutdown.
2.2 PURCHASE BY THE PURCHASER
Subject to the terms and conditions of this Agreement, beginning on the
Effective Date and continuing throughout the Term of this Agreement,
the Purchaser shall purchase and take delivery from the Supplier "CPT
the applicable Delivery Site" the quantities of Metal determined in
accordance with this Agreement.
-11-
2.3 NOTIFICATION OF ESTIMATED QUANTITIES OF METAL REQUIRED BY THE PURCHASER
(a) The Purchaser agrees to purchase and the Supplier agrees to
supply, in each Contract Year, in accordance with the terms
hereof, a quantity of Metal which is no less than the Minimum
Annual Purchase Quantity for such Contract Year.
(b) With respect to the purchase of Metal hereunder in any
Contract Year, the Purchaser shall provide to the Supplier no
later than on September 1 of the Contract Year preceding such
Contract Year:
(i) an estimate, in Tonnes, of the Annual Order Quantity
(the "ESTIMATED ANNUAL ORDER QUANTITY" for such
Contract Year); and
(ii) an estimate, in Tonnes, of the quantity of Metal
required for each month in such Contract Year (the
"ESTIMATED MONTHLY DEMAND"), provided (1) the amount
for each month shall be less than or equal to ***% of
the Estimated Annual Order Quantity for such Contract
Year divided by 12, and greater than or equal to ***%
(or, for no more than 2 months, ***%), of the
Estimated Annual Order Quantity divided by 12, and
(2) the aggregate of the Estimated Monthly Demand
amounts for all months in such Contract Year shall
equal the Estimated Annual Order Quantity notified
pursuant to paragraph (i) above.
The Estimated Annual Order Quantity for Contract Year 1 and
the Estimated Monthly Demand for each month in Contract Year
1, are set out in SCHEDULE 3.
2.4 NOTIFICATION OF ESTIMATED QUANTITIES OF METAL SUPPLIED BY THE SUPPLIER
(a) The Supplier shall have no obligation to supply Metal in a
Contract Year in excess of the Maximum Annual Supply
Obligation for such Contract Year, unless otherwise agreed by
the Parties hereto.
(b) With respect to the supply of Metal hereunder in any Contract
Year, the Supplier shall provide to the Purchaser no later
than September 15 of the Contract Year preceding such Contract
Year:
(i) an estimate, in Tonnes, of the Supplier's supply
capacity of Metal for such Contract Year (the
"ESTIMATED ANNUAL CAPACITY"), which amount shall be
greater than or equal to the Maximum Annual Supply
Obligation for such Contract Year, and
(ii) an estimate, in Tonnes, of the Supplier's supply
capacity of Metal for each month in such Contract
Year (the "ESTIMATED MONTHLY CAPACITY"), provided
that the Estimated Monthly Capacity in respect of
each month shall be equal to or greater than the
Estimated Monthly Demand for such month notified by
the Purchaser in accordance with Section 2.3(b)(ii).
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-12-
In determining the Estimated Annual Capacity and the Estimated
Monthly Capacity, in each case, the Supplier shall take into
account actual operating days in the relevant Contract Year or
month, as applicable (taking into account planned shutdowns of
the Supplier Facilities), existing commitments of the Supplier
for supply to other Persons, and seasonal factors affecting
the Supplier's capacity.
The Estimated Annual Capacity for Contract Year 1 and the
Estimated Monthly Capacity for each month in Contract Year 1
are set out in SCHEDULE 3.
2.5 CHANGES TO ESTIMATES
In respect of the purchase and supply of Metal hereunder in any
Contract Year, the Purchaser and Supplier agree to consult during the
period September 1 to October 31 in the year preceding such Contract
Year (the "CONSULTATION PERIOD") with respect to offtake and capacity
issues effecting the estimates of purchase requirements and supply
capacity provided by the Purchaser and Supplier, respectively, pursuant
to Sections 2.3 and 2.4. During such Consultation Period the Purchaser
may propose to purchase a quantity of Metal in such Contract Year in
excess of the Maximum Annual Supply Obligation for such Contract Year
and/or to modify the Estimated Annual Order Quantity or Estimated
Monthly Demand amounts notified by the Purchaser in respect of such
Contract Year, provided that the Supplier shall be under no obligation
to agree to such proposal by the Purchaser. During such Consultation
Period the Supplier may propose a revised Supply Schedule provided that
the Purchaser shall be under no obligation to agree to such revised
Supply Schedule, and the Supplier shall be under no obligation to
comply with the terms of such revised Supply Schedule, unless the
Parties agree to such changes. The Parties shall consult and negotiate
in good faith during the Consultation Period with respect to any such
matters proposed by the Purchaser or Supplier, as applicable, and will
discuss planned maintenance shutdowns at any of the Delivery Sites or
the Supplier Facilities and if possible, schedule down-time events
relating to such plant maintenance shutdowns for times which are
mutually agreeable to the Purchaser and the Supplier with a view to
avoiding production disruption at the Supplier Facilities or inventory
build-ups at any of the Supplier Facilities or the Delivery Sites.
2.6 NOTIFICATION OF ANNUAL ORDER QUANTITY
In respect of the purchase and supply of Metal hereunder in any
Contract Year, the Purchaser shall deliver to the Supplier on or before
October 31 in the year preceding such Contract Year, a notice setting
forth:
(i) the firm Annual Order Quantity for such Contract
Year, which shall be no less than the Minimum Annual
Purchase Quantity calculated for such Contract Year,
and
-13-
(ii) the Estimated Monthly Demand (which may be updated
from the amount notified pursuant to Section
2.3(b)(ii)) for each month in such Contract Year
provided (1) such amount in respect of each month
shall be less than or equal to ***% of the Annual
Order Quantity for such Contract Year divided by 12,
and greater than or equal to ***% (or ***% for no
more than 2 months) of the Annual Order Quantity for
such Contract Year divided by 12, and (2) such
amount in respect of any month does not exceed the
Estimated Monthly Capacity notified by the Supplier
in respect of such month pursuant to Section
2.4(b)(ii) (as such amount may be adjusted pursuant
to Section 2.5).
2.7 MONTHLY QUANTITY MANAGEMENT
(a) Throughout the Term of this Agreement, by the first day of
each month (and if such day is not a Business Day, on the
Business Day immediately preceding such day), the Supplier
shall notify the Purchaser of its updated Estimated Monthly
Capacity for each month (including the month in which such
notice is delivered) of the then current Contract Year (such
amount referred to as the "ESTIMATED MONTHLY CAPACITY
UPDATE"), which Estimated Monthly Capacity Update:
(i) shall not be subject to adjustment in excess of +/-
5% by the Supplier in respect of the first three
months in respect of which such notice is sent, such
that the amount notified in respect of such months
may not be reduced or increased by more than 5% in
subsequent Estimated Monthly Capacity Updates
delivered under this Section 2.7;
(ii) shall be an indicative amount for each of the
remaining months in the then current Contract Year
included in such notification, which amount may be
modified in future Estimated Monthly Capacity Updates
delivered pursuant to this Section 2.7; and
(iii) shall be, in respect of each month, equal to or
greater than the Estimated Monthly Demand most
recently notified by the Purchaser in respect of such
month pursuant to Section 2.6 (subject to any
adjustment pursuant to Section 2.5).
(b) Throughout the Term of this Agreement by the 15th day of each
month (and if such day is not a Business Day, on the Business
Day immediately preceding such 15th day), the Purchaser shall
provide to the Supplier a notice (referred to as the "MONTHLY
OFFTAKE QUOTE") setting forth the following:
(i) the quantity of Metal which the Purchaser commits to
purchase hereunder in the next succeeding month
("MONTH M1"), which quantity, shall be greater than
or equal to ***% of the Annual Order Quantity for the
Contract Year in which Month M1 takes place divided
by 12, and
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-14-
less than or equal to ***% of the Annual Order
Quantity for the Contract Year in which Month M1
takes place divided by 12, and identifying the
Delivery Site or Delivery Sites to which such Metal
should be delivered (which notification in respect of
Month M1 is referred to herein as the "FIRM ORDER"
for such month), and the Purchaser hereby agrees that
it shall purchase from the Supplier in Month M1 a
quantity of Metal which is no less than ***% of the
quantity identified in the Firm Order, and no more
than ***% than the quantity identified in such Firm
Order;
(ii) an updated Estimated Monthly Demand for each month
subsequent to Month M1 occurring in the Contract Year
in which Month M1 occurs, which updated amount:
(1) shall be greater than or equal to ***% (or
***% for no more than 2 months) of the
Annual Order Quantity for the Contract Year
in which such month takes place divided by
12, and less than or equal to ***% of the
Annual Order Quantity for the Contract Year
in which such month takes place divided by
12; and
(2) when aggregated with all quantities of Metal
actually purchased by the Purchaser
hereunder in all months prior to Month M1
occurring in the same Contract Year, shall
be no less than the Minimum Annual Purchase
Quantity in respect of such Contract Year,
provided that the Firm Order for Month M1 and each Estimated
Monthly Demand for each subsequent month shall be no more than
the Estimated Monthly Capacity Update most recently notified
by the Supplier in respect of such month.
2.8 WEEKLY QUANTITY MANAGEMENT
The Parties shall cooperate in coordinating capacity demand and
shipments within each calendar month. Supplier's weekly capacity shall,
absent normal course capacity constraints, be within the range of ***%
to ***% of 1/4 of the Estimated Monthly Capacity Update last provided
by the Supplier hereunder in respect of the month containing the
relevant week.
2.9 SUPPLIER'S SHIPPING OBLIGATIONS
(a) The Supplier shall supply to the Purchaser, in accordance with
the terms hereof, in each month, such quantity of Metal as is
identified by the Purchaser in respect of such calendar month
in the Firm Order for such month delivered by the Purchaser in
accordance with Section 2.7(b)(i).
(b) Notwithstanding the provisions of Incoterms 2000 and Section
2.13, the Supplier acknowledges its responsibility to make all
necessary arrangements for the transportation of Metal to the
Delivery Site on behalf of the Purchaser.
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-15-
The Supplier shall act as the disclosed agent of the Purchaser
in entering into contracts for hiring carriers for the
shipment of Metal under this Agreement. In doing this, the
Supplier shall use Commercially Reasonable Efforts to obtain
competitive freight rates and shall obtain approval from the
Purchaser before entering into any long term contracts for
hiring carriers on behalf of the Purchaser. The Supplier shall
use Commercially Reasonable Efforts to ensure that such
transportation is suitable for delivering the Metal to the
Delivery Site.
(c) The Supplier undertakes to maintain the same practices and
levels of service in respect of shipments of Metal hereunder
consistent with its past and current practices. The Supplier
undertakes to ensure that any shipments of Metal supplied
hereunder:
(i) to the Purchaser's facilities at Oswego Plant,
Oswego, New York, shall be made by rail to an
intermediate point (which may be Brockville,
Ontario), with onward shipment to such Delivery Site
by truck; and
(ii) to the Purchaser's facilities at the ▇▇▇▇▇ Aluminum
Plant, Russelville, Kentucky, are made by either rail
or truck, at the Supplier's option.
(d) Matters regarding shipment and delivery performance hereunder
shall be governed by the provisions of SCHEDULE 4.
2.10 PRICE
(a) The price payable by the Purchaser to the Supplier for each
Tonne of Metal sold and purchased pursuant to Sections 2.1 and
2.2 shall be the Contract Price. The date used for calculating
the Contract Price for any shipment of Metal shall be the ▇▇▇▇
of Lading Date.
(b) In the event that (i) LME ceases or suspends trading in
aluminum, (ii) Metal Week ceases to be published or ceases to
publish the relevant reference price for determining the
Midwest Price, or (iii) Metal Bulletin ceases to be published
or ceases publication of the relevant reference price for
determining the LME 3-Month Aluminum Price, the Parties shall
meet with a view to agreeing on an alternative publication or,
as applicable, reference price. If the Parties fail to reach
an agreement within sixty (60) days of any Party having
notified the other to enter into discussions to agree to an
alternative publication or reference price, then the Chairman
of the LME in London, England or his nominee shall be
requested to select a suitable reference in lieu thereof and
an appropriate amendment to the terms of this Section 2.10.
The decision of the Chairman or his nominee shall be final and
binding on the Parties.
(c) The Purchaser shall be entitled to request a review by an
independent external auditor of the Supplier's cost data used
to calculate adjustments made to the Product Premium based on
actual magnesium prices paid by the Supplier, which review
shall be carried out on a confidential basis with no
disclosure of
-16-
such cost data to the Purchaser. Subject to the Supplier being
satisfied, acting reasonably, with the arrangements in place
to ensure the confidentiality of the cost data disclosed to
such external auditors, the Supplier shall make such data
available to such external auditors to enable such review.
(d) The Supplier shall use Commercially Reasonable Efforts to
review its costing practices with a view to reducing the alloy
size combination to less than one furnace load.
2.11 QUALITY
(a) Metal supplied under this Agreement shall comply with the
Specifications set forth in SCHEDULE 2. The Supplier shall use
Commercially Reasonable Efforts to notify the Purchaser prior
to shipment of any Metal that does not meet Specifications.
The Purchaser shall not be required to accept delivery of any
Metal that does not meet Specifications. If the Purchaser does
not accept delivery of Metal not meeting Specifications, the
Supplier's obligation shall be limited to the assumption of
all costs for return of such Metal to the Supplier, and for
the delivery of replacement Metal to the Purchaser. All other
express or implied warranties, conditions and other terms
relating to Metal hereunder, including warranties relating to
merchantability or fitness for a particular purpose, are
hereby excluded to the fullest extent permitted by Applicable
Law.
(b) If the Specifications for Metal supplied by the Supplier
change, the Supplier may propose that the Specifications set
forth in SCHEDULE 2 be amended to reflect such changes. If the
revised Specifications do not result in increased costs for
the processing of such Metal by the Purchaser, the Purchaser
shall not unreasonably withhold or delay its consent to such
changed specifications.
2.12 PAYMENT
(a) The Purchaser shall pay the Supplier in full for each shipment
of Metal meeting the Specifications set out in SCHEDULE 2 or
otherwise accepted by the Purchaser in accordance with the
Supplier's commercial invoice within thirty (30) days of the
▇▇▇▇ of Lading Date.
(b) If the Purchaser believes that a shipment of Metal does not
meet the Specifications set out in SCHEDULE 2 and has rejected
such shipment in a timely manner in accordance with the terms
hereof, it need not pay the invoice. However, if the Purchaser
subsequently accepts that the Metal complies with the
Specifications set out in SCHEDULE 2, the Purchaser shall pay
the invoice and, if payment is overdue pursuant to Section
2.12(a), interest in accordance with Section 2.12(c).
(c) If any payment required to be made pursuant to Section 2.12(a)
above is overdue, the full amount shall bear interest at a
rate per annum equal to the
-17-
Default Interest Rate calculated on the actual number of days
elapsed, accrued from and excluding the date on which such
payment was due, up to and including the actual date of
receipt of payment in the nominated bank or banking account.
(d) All amounts paid to the Supplier or the Purchaser hereunder
shall be paid in Dollars by wire transfer in immediately
available funds to the account specified by the Supplier or
Purchaser, as applicable, by notice from time to time by one
Party to the other hereunder.
(e) If any Party fails to purchase or supply, as applicable, any
quantity of Metal in any month as required under the terms of
this Agreement, such Party shall be liable to the other Party
for all direct damages, losses and costs resulting from such
failure, provided that such other Party shall use its
Commercially Reasonable Efforts to mitigate such damages,
losses and costs.
2.13 DELIVERY
Metal shall be delivered CPT the Delivery Site identified in each Firm
Order. The delivery of Metal pursuant to this Section 2.13 shall be
governed by Incoterms 2000, as amended from time to time.
2.14 TITLE AND RISK OF LOSS
Title to and risk of damage to and loss of Metal shall pass to the
Purchaser as the Metal is delivered by the Supplier to the carrier.
2.15 PURCHASER AS PRINCIPAL
Purchaser warrants that all Metal to be purchased hereunder shall be
purchased for Purchaser's own consumption. Purchaser agrees that it
shall not re-sell or otherwise make available to any Person any Metal
purchased from the Supplier hereunder, other than in respect of
transactions undertaken in small quantities by the Purchaser to balance
purchases or Purchaser's metal position.
3. FORCE MAJEURE
3.1 EFFECT OF FORCE MAJEURE
No Party shall be liable for any loss or damage that arises directly or
indirectly through or as a result of any delay in the fulfilment of or
failure to fulfil its obligations in whole or in part (other than the
payment of money as may be owed by a Party) under this Agreement where
the delay or failure is due to Force Majeure. The obligations of the
Party affected by the event of Force Majeure (the "AFFECTED PARTY")
shall be suspended, to the extent that those obligations are affected
by the event of Force Majeure, from the date the Affected Party first
gives notice in respect
-18-
of that event of Force Majeure until cessation of that event of Force
Majeure (or the consequences thereof).
3.2 DEFINITION
"FORCE MAJEURE" shall mean any act, occurrence or omission (or other
event), subsequent to the commencement of the Term hereof, which is
beyond the reasonable control of the Affected Party including, but not
limited to: fires, explosions, accidents, strikes, lockouts or labour
disturbances, floods, droughts, earthquakes, epidemics, seizures of
cargo, wars (whether or not declared), civil commotion, acts of God or
the public enemy, action of any government, legislature, court or other
Governmental Authority, action by any authority, representative or
organisation exercising or claiming to exercise powers of a government
or Governmental Authority, compliance with Applicable Law, blockades,
power failures or curtailments, inadequacy or shortages or curtailments
or cessation of supplies of raw materials or other supplies, failure or
breakdown of equipment of facilities, the invocation of Force Majeure
by any party to an agreement under which any Party's operations are
affected, and any declaration of Force Majeure by the facility
producing the Metal, or any other event beyond the reasonable control
of the Parties whether or not similar to the events or occurrences
enumerated above. In no circumstances shall problems with making
payments constitute Force Majeure.
3.3 NOTICE
Upon the occurrence of an event of Force Majeure, the Affected Party
shall promptly give notice to the other Party hereto setting forth the
details of the event of Force Majeure and an estimate of the likely
duration of the Affected Party's inability to fulfil its obligations
under this Agreement. The Affected Party shall use Commercially
Reasonable Efforts to remove the said cause or causes and to resume,
with the shortest possible delay, compliance with its obligations under
this Agreement provided that the Affected Party shall not be required
to settle any strike, lockout or labour dispute on terms not acceptable
to it. When the said cause or causes have ceased to exist, the Affected
Party shall promptly give notice to the other Party that such cause or
causes have ceased to exist.
3.4 PRO RATA ALLOCATION
If the Supplier's supply of any Metal to be delivered to the Purchaser
is stopped or disrupted by an event of Force Majeure, the Supplier
shall have the right to allocate its available supplies of such Metal,
if any, among any or all of its existing customers whether or not under
contract, in a fair and equitable manner. In addition, where the
Supplier is the Affected Party, it may (but shall not be required to)
offer to supply, from another source, Metal of similar quality in
substitution for the Metal subject to the event of Force Majeure to
satisfy that amount which would have otherwise been sold and purchased
hereunder at a price which may be more or less than the price
hereunder.
-19-
3.5 CONSULTATION
Within thirty (30) days of the cessation of the event of Force Majeure,
the Parties shall consult with a view to reaching agreement as to the
Supplier's obligation to provide, and the Purchaser's obligation to
take delivery of, that quantity of Metal that could not be sold and
purchased hereunder because of the event of Force Majeure, provided
that any such shortfall quantity has not been replaced by substitute
Metal pursuant to the terms above.
In the absence of any agreement by the Parties, failure to deliver or
accept delivery of Metal which is excused by or results from the
operation of the foregoing provisions of this Section 3 shall not
extend the Term of this Agreement and the quantities of Metal to be
sold and purchased under this Agreement shall be reduced by the
quantities affected by such failure.
3.6 TERMINATION
(a) If an event of Force Majeure where the Affected Party is the
Purchaser shall continue for more than twelve (12) consecutive
calendar months, then the Supplier shall have the right to
terminate this Agreement.
(b) If an event of Force Majeure where the Affected Party is the
Supplier shall continue for more than twelve (12) consecutive
calendar months, then the Purchaser shall have the right to
terminate this Agreement.
4. ASSIGNMENT
4.1 PROHIBITION ON ASSIGNMENTS
No Party shall assign or transfer this Agreement, in whole or in part,
or any interest or obligation arising under this Agreement except as
permitted by Section 4.2, without the prior written consent of the
other Party.
4.2 ASSIGNMENT WITHIN ALCAN GROUP OR NOVELIS GROUP
(a) With the consent of Novelis, such consent not to be
unreasonably withheld or delayed, Alcan may elect to have one
or more of the Persons comprising the Alcan Group assume the
rights and obligations of the Supplier under this Agreement,
provided that
(i) Alcan shall remain fully liable for all obligations
of the Supplier hereunder, and
(ii) the transferee will remain at all times a member of
the Alcan Group;
-20-
any such successor to Alcan as a Supplier under this Agreement shall be
deemed to be the "SUPPLIER" for all purposes of the Agreement.
(b) With the consent of Alcan, such consent not to be unreasonably
withheld or delayed, Novelis may elect to have one or more of
the Persons comprising the Novelis Group assume the rights and
obligations of the Purchaser under this Agreement, provided
that
(i) Novelis shall remain fully liable for all obligations
of the Purchaser hereunder, and
(ii) the transferee will remain at all times a member of
the Novelis Group;
any such successor to Novelis as Purchaser under this Agreement shall
be deemed to be the "PURCHASER" for all purposes of this Agreement.
5. TERM AND TERMINATION
5.1 EFFECTIVENESS
This Agreement shall come into effect upon the Effective Date.
5.2 TERM
The term of this Agreement (the "TERM") shall be from the Effective
Date until December 31, ***, unless terminated earlier or extended
pursuant to the provisions of this Agreement.
5.3 EXTENSION
One year prior to the expiration of the Term, the Parties may, upon the
request of any Party, meet to negotiate in good faith a possible
extension of the Term for a further period on terms to be mutually
agreed (including in respect of quantities and price of Metal to be
purchased and supplied hereunder). If no such agreement is reached
between the Parties, the Agreement shall terminate upon expiry of the
Term.
5.4 TERMINATION
This Agreement shall terminate:
(a) upon expiry of the Term;
(b) upon the mutual agreement of the Parties prior to the expiry
of the Term;
(c) pursuant to Section 3.6 as a result of Force Majeure; or
(d) upon the occurrence of an Event of Default, in accordance with
Section 6.
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-21-
6. EVENTS OF DEFAULT
This Agreement may be terminated in its entirety immediately at the
option of a Party (the "TERMINATING PARTY"), in the event that an Event
of Default occurs in relation to the other Party (the "DEFAULTING
PARTY"), and such termination shall take effect immediately upon the
Terminating Party providing notice to the Defaulting Party of the
termination.
For the purposes of this Agreement, each of the following shall
individually and collectively constitute an "EVENT OF DEFAULT" with
respect to a Party:
(a) such Party defaults in payment of any payments which are due
and payable by it pursuant to this Agreement, and such default
is not cured within thirty (30) days following receipt by the
Defaulting Party of notice of such default;
(b) such Party breaches any of its material obligations pursuant
to this Agreement (other than as set out in paragraph (a)
above), and fails to cure it within sixty (60) days after
receipt of notice from the non-defaulting Party specifying the
default with reasonable detail and demanding that it be cured,
provided that if such breach is not capable of being cured
within sixty (60) days after receipt of such notice and the
Party in default has diligently pursued efforts to cure the
default within the sixty (60) day period, no Event of Default
under this paragraph (b) shall occur;
(c) such Party breaches any material representation or warranty,
or fails to perform or comply with any material covenant,
provision, undertaking or obligation in or of the Separation
Agreement;
(d) in relation to the Purchaser (1) upon the occurrence of a Non
Compete Breach (as defined in the Separation Agreement) and
the giving of notice of the termination of this Agreement by
Alcan to Novelis pursuant to Section 14.03(b) of the
Separation Agreement and pursuant to this paragraph of this
Agreement, or (2) upon the occurrence of a Change of Control
Non Compete Breach (as defined in the Separation Agreement)
and the giving of notice of the termination of this Agreement
by Alcan to Novelis pursuant to Section 14.04(e) of the
Separation Agreement, in which event the termination of this
Agreement shall be effective immediately upon Alcan providing
Novelis notice pursuant to Section 14.03(b) or Section
14.04(e) of the Separation Agreement;
(e) such Party (i) is bankrupt or insolvent or takes the benefit
of any statute in force for bankrupt or insolvent debtors, or
(ii) files a proposal or takes any action or proceeding before
any court of competent jurisdiction for dissolution,
winding-up or liquidation, or for the liquidation of its
assets, or a receiver is appointed in respect of its assets,
which order, filing or appointment is not rescinded within
sixty (60) days; or
-22-
(f) proceedings are commenced by or against such Party under the
laws of any jurisdiction relating to reorganization,
arrangement or compromise.
7. REPRESENTATIONS AND WARRANTIES
The Parties hereby reiterate for the purposes of this Agreement those
representations and warranties set forth in Article VI of the
Separation Agreement.
8. CONFIDENTIALITY
Each of the Parties shall at all times be in full compliance with its
obligations under Sections 11.07 and 11.08 (Confidentiality) of the
Separation Agreement.
9. DISPUTE RESOLUTION
9.1 DISPUTES
The Master Agreement with respect to Dispute Resolution, effective on
the Effective Date, among the Parties and other parties thereto shall
govern all disputes, controversies or claims (whether arising in
contract, delict, tort or otherwise) ("DISPUTES") between the Parties
that may arise out of, or relate to, or arise under or in connection
with, this Agreement or the transactions contemplated hereby (including
all actions taken in furtherance of the transactions contemplated
hereby), or the commercial or economic relationship of the Parties
relating hereto or thereto.
9.2 CONTINUING OBLIGATIONS
The existence of a Dispute with respect to this Agreement between the
Parties shall not relieve either Party from performance of its
obligations under this Agreement that are not the subject of such
Dispute.
10. MISCELLANEOUS
10.1 CONSTRUCTION
The terms of Section 16.04 (Construction) of the Separation Agreement
shall apply to this Agreement, mutatis mutandis, as if all references
therein to the "Agreement" were deemed to be references to this
Agreement.
10.2 PAYMENT TERMS
Any amount to be paid or reimbursed by one Party to the other under
this Agreement, save as expressly provided in Section 2, shall be paid
or reimbursed hereunder within thirty (30) days after presentation of
an invoice or a written demand therefor and
-23-
setting forth, or accompanied by, reasonable documentation or
reasonable explanation supporting such amount.
10.3 NOTICES
All notices and other communications under this Agreement shall be in
writing and shall be deemed to be duly given (a) on the date of
delivery if delivered personally, (b) on the first Business Day
following the date of dispatch if delivered by a nationally recognized
next-day courier service, (c) on the date of actual receipt if
delivered by registered or certified mail, return receipt requested,
postage prepaid or (d) if sent by facsimile transmission, when
transmitted and receipt is confirmed by telephone. All notices
hereunder shall be delivered as follows:
IF TO THE PURCHASER, TO:
NOVELIS INC.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
IF TO THE SUPPLIER, TO:
ALCAN INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Legal Officer
Any Party may, by notice to the other Party, change the address or fax
number to which such notices are to be given.
10.4 GOVERNING LAW
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the Province of Quebec and the laws of
Canada applicable therein, irrespective of conflict of laws principles
under Quebec law, as to all matters,
-24-
including matters of validity, construction, effect, enforceability,
performance and remedies.
10.5 JUDGMENT CURRENCY
The obligations of a Party to make payments hereunder shall not be
discharged by an amount paid in any currency other than Dollars,
whether pursuant to a court judgment or arbitral award or otherwise, to
the extent that the amount so paid upon conversion to Dollars and
transferred to an account indicated by the Party to receive such funds
under normal banking procedures does not yield the amount of Dollars
due, and each Party hereby, as a separate obligation and
notwithstanding any such judgment or award, agrees to indemnify the
other Party against, and to pay to such Party on demand, in Dollars,
any difference between the sum originally due in Dollars and the amount
of Dollars received upon any such conversion and transfer.
10.6 ENTIRE AGREEMENT
This Agreement, the Separation Agreement and schedules, exhibits,
annexes and appendices hereto and thereto and the specific agreements
contemplated herein or thereby, contain the entire agreement between
the Parties with respect to the subject matter hereof and supersede all
previous agreements, negotiations, discussions, writings,
understandings, commitments and conversations with respect to such
subject matter. No agreements or understandings exist between the
Parties with respect to the subject matter hereof other than those set
forth or referred to herein or therein.
10.7 CONFLICTS
In case of any conflict or inconsistency between this Agreement and the
Separation Agreement, this Agreement shall prevail.
10.8 SEVERABILITY
If any provision of this Agreement or the application thereof to any
Person or circumstance is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances or in jurisdictions other than those as to which it has
been held invalid or unenforceable, shall remain in full force and
effect and shall in no way be affected, impaired or invalidated
thereby, so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any Party.
Upon such determination, the Parties shall negotiate in good faith in
an effort to agree upon such a suitable and equitable provision to
effect the original intent of the Parties.
-25-
10.9 SURVIVAL
The obligations of the Parties under Sections 2.10, 2.11, 2.12, 8, 9,
10.4 and 10.9 and liability for the breach of any obligation contained
herein shall survive the expiration or earlier termination of this
Agreement.
10.10 EXECUTION IN COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the
Parties and delivered to the other Party.
10.11 AMENDMENTS
No provisions of this Agreement shall be deemed waived, amended,
supplemented or modified by any Party, unless such waiver, amendment,
supplement or modification is in writing and signed by the authorized
representative of the Party against whom it is sought to enforce such
waiver, amendment, supplement or modification.
10.12 WAIVERS
No failure on the part of a Party to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power
or privilege under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The
remedies provided herein are cumulative and not exclusive of any
remedies provided by Applicable Law.
10.13 NO PARTNERSHIP
Nothing contained herein or in the Agreement shall make a Party a
partner of any other Party and no Party shall hold out the other as
such.
10.14 TAXES, ROYALTIES AND DUTIES
All royalties, taxes and duties imposed or levied on any Metal
delivered hereunder (other than any taxes on the income of the
Supplier) shall be for the account of and paid by the Purchaser.
10.15 LIMITATIONS OF LIABILITY
(a) Neither Party shall be liable to the other Party for any
indirect, collateral, incidental, special, consequential or
punitive damages, lost profit or failure to realize expected
savings or other commercial or economic loss of any kind,
howsoever caused, and on any theory of liability (including
negligence) arising
-26-
in any way out of this Agreement; provided, however, that the
foregoing limitations shall not limit any Parties'
indemnification obligations for Liabilities with respect to
Third Party Claims as set forth Article IX of the Separation
Agreement (as if such Article IX was set out in full herein by
reference to the obligations of the Parties hereunder).
(b) Sections 9.04, 9.05, 9.06, 9.07 and 9.09 of the Separation
Agreement shall apply mutatis mutandis with respect to any
Liability subject to any indemnification or reimbursement
pursuant to this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]
-27-
IN WITNESS WHEREOF, the Parties hereto have caused this Metal Supply Agreement
to be executed by their duly authorized representatives.
NOVELIS INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
ALCAN INC.
-28-
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title: