EXECUTION COPY
(METAL SUPPLY AGREEMENT #3
SHEET INGOT - NORTH AMERICA)
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 JANUARY 5, 2005 WITH EFFECT AS OF THE EFFECTIVE DATE]
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION...................................... 2
2. METAL............................................................... 10
3. FORCE MAJEURE....................................................... 19
4. ASSIGNMENT.......................................................... 20
5. TERM AND TERMINATION................................................ 21
6. EVENTS OF DEFAULT................................................... 22
7. REPRESENTATIONS AND WARRANTIES...................................... 23
8. CONFIDENTIALITY..................................................... 23
9. DISPUTE RESOLUTION.................................................. 23
10. MISCELLANEOUS....................................................... 24
SCHEDULES
1. Product Premiums
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 January ____, 2005, 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,
----------
*** 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-
(iii) in respect of Contract Year 3, *** Tonnes (or such other
quantity as may be specified in writing by Novelis prior to
September 30, 2005, provided such quantity shall be greater than
or equal to *** Tonnes and less than or equal to *** Tonnes), and
(iv) It is anticipated that the Parties will reach agreement on a new
supply agreement superseding this agreement, effective starting
the end of Contract Year 3. If the Parties fail to reach such an
agreement, this contract will continue to be in force through the
end of Contract Year ***, with the Annual Base Quantity for
Contract Years *** being equal to the Annual Base Quantity of the
prior Contract Year less a possible reduction equal to *** of the
Contract Year 3 Annual Base Quantity. This reduction of Annual
Base Quantity for Contract Years *** can be triggered
unilaterally by either Party by providing written notice no later
than 18 months prior to the start of the relevant Contract Year.
As an example, if the Annual Base Quantity for Contract Year *** is ***
Tonnes, then the Annual Base Quantity for Contract Year *** will be equal
to *** Tonnes unless either Supplier or Purchaser notifies the other Party
by June 30 of Contract Year *** that it is triggering a reduction of ***
Tonnes (***% of the Annual Base Quantity for Contract Year ***). In the
latter case, the Annual Base Quantity for Contract Year *** would become
*** Tonnes, 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 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,
----------
*** 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-
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 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,
----------
*** 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-
(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;
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) $*** per Tonne
for two butts; provided that Cut Premium is only applicable if the
Purchaser has requested, in the Firm Order relating to the applicable
supply of Metal, that the Supplier remove butts of the supplied Metal.
"DEFAULT INTEREST RATE" means the rate of interest charged by the Supplier
from time to time on late payments in accordance with Supplier's normal
commercial practice as indicated on invoices issued by Supplier to
Purchaser hereunder.
"DEFAULTING PARTY" has the meaning set forth in Section 6.
"DELIVERY SITE" means any of the following facilities of the Purchaser, as
specified, in respect of each shipment of Metal hereunder in the Firm
Orders provided by the Purchaser hereunder:
(i) Oswego Plant, Oswego, New York;
(ii) ▇▇▇▇▇ Aluminum, Russelville, Kentucky; or
(iii) such other facilities of the Purchaser as may be agreed to by
the Supplier.
----------
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
-6-
"DISPUTES" has the meaning set forth in Section 9.1.
"DOLLARS" or "$" 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.
"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
-7-
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.
"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, 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, 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,
----------
*** 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-
(iii) in respect of Contract Year 3, Annual Base Quantity for Contract
Year 3 less ***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.
"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 PPI
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.
----------
*** 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-
"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 payable in respect of supplies
hereunder where the alloy size combination ordered by the Purchaser in any
Firm Order is less than 100 Tonnes, as set out below:
For order sizes from *** $***/Tonne
For order sizes from *** $***/Tonne
For order sizes from *** $***/Tonne
The minimum order size shall be one cast, subject to satisfactory
minimization by Purchaser of Firm Orders less than 100 Tonnes of items
ordered less frequently than once a month.
"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 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) Grande-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).
----------
*** 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.
-10-
"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 PPI" means the Producer Price Index for industrial commodities, 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.
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.
-11-
(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.
Annual Base Quantity for the relevant Contract Years and other related
volume levels will be adjusted accordingly. Any reduction pursuant to
this section 2.1(c) in the Supplier's obligation to supply Metal shall
only take effect 18 months after Supplier has provided notice thereof
to Purchaser.
Likewise, should the Purchaser decide to shut down any of its
facilities being supplied under this Agreement, Purchaser will be
entitled to reduce Annual Base Quantities in a similar manner and with
the same 18-month notice to Supplier.
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.
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
-12-
(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).
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.
----------
*** 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.
-13-
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
(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
----------
*** 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-
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 ***% (or ***% for no
more than 2 months) of the Annual Order Quantity for the Contract
Year in which Month M1 takes place divided by 12, and 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
----------
*** 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-
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).
----------
*** 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.
-16-
(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. 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 consult with 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,
may 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,
Russellville, Kentucky, may made by either rail or truck in
accordance with current practice. Changes to current practice
require mutual agreement.
(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.
-17-
(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 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.
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, in accordance with
Supplier's commercial invoice, for each shipment of Metal meeting the
Specifications set out in Schedule 2 or otherwise accepted by
Purchaser. Payment shall be made every 14 days commencing February 14,
2005 (each a "Payment Date"), or if such day is not a Business Day,
then on the immediately following Business Day. Payment shall be made
on each Payment Date in respect of all invoices issued not later than
31 days prior to such payment date and not previously paid, with
invoices issued after such date being payable on the next following
Payment 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
-18-
the Specifications set out in SCHEDULE 2, the Purchaser shall pay the
invoice and, if payment is overdue pursuant to Section 2.12(a) above,
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 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 or by
ACH 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.
-19-
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 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.
-20-
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.
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.
-21-
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;
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 ***, unless terminated earlier or extended pursuant to the provisions
of this Agreement.
----------
*** 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.
-22-
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.
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;
-23-
(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
(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
-24-
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 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
-25-
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.
10.3 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, including matters of validity, construction,
effect, enforceability, performance and remedies.
10.4 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.
10.5 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.
-26-
10.6 CONFLICTS
In case of any conflict or inconsistency between this Agreement and the
Separation Agreement, this Agreement shall prevail.
10.7 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.
10.8 SURVIVAL
The obligations of the Parties under Sections 2.10, 2.11, 2.12, 8, 9, 10.3
and 10.8 and liability for the breach of any obligation contained herein
shall survive the expiration or earlier termination of this Agreement.
10.9 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.
10.10 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.
10.11 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.
-27-
10.12 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.
10.13 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.
10.14 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 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.]
IN WITNESS WHEREOF, the Parties hereto have caused this Metal Supply Agreement
to be executed by their duly authorized representatives.
NOVELIS INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name:
------------------------------
Title:
-----------------------------
ALCAN INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name:
------------------------------
Title:
-----------------------------