Exhibit 10.3
MOLTEN METAL SUPPLY AGREEMENT
between
NOVELIS INC.
(as Purchaser)
and
ALCAN INC.
(as Supplier)
FOR THE SUPPLY OF MOLTEN METAL TO PURCHASER'S SAGUENAY WORKS FACILITY
DATED DECEMBER ____, 2004, WITH EFFECT AS OF THE EFFECTIVE DATE
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION....................................... 1
2. MOLTEN METAL......................................................... 6
3. FORCE MAJEURE........................................................ 11
4. ASSIGNMENT........................................................... 13
5. TERM AND TERMINATION................................................. 13
6. EVENTS OF DEFAULT.................................................... 14
7. REPRESENTATIONS AND WARRANTIES....................................... 15
8. CONFIDENTIALITY...................................................... 15
9. DISPUTE RESOLUTION................................................... 15
10. MISCELLANEOUS........................................................ 16
SCHEDULES
1 Contract Tonnage and Estimated Weekly Shipping Schedule for Contract Year 1
2 Saguenay Smelters
MOLTEN 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").
WHEREAS the Supplier wishes to supply, and the Purchaser wishes to purchase,
subject to the terms and conditions of this Agreement, Molten Metal (as defined
below) required by the Purchaser at the Purchaser's Saguenay Works facility.
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
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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 Molten 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.
"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 2.6(b). As an example, the Aluminum Price for the month of
April will be based on aluminum prices published during the month of
March.
"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.
"BASE CONTRACT TONNAGE" means:
(i) in respect of Contract Year 1, *** Tonnes;
(ii) in respect of Contract Year 2, *** Tonnes; and
(iii) in respect of Contract Year 3 and each subsequent Contract
Year, *** Tonnes,
subject to any reduction in accordance with Section 2.4(b).
"▇▇▇▇ OF LADING DATE" means the date of the ▇▇▇▇ of lading representing
Molten 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).
*** 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.
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"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.
"CONTRACT PRICE" for each Tonne of Molten Metal sold and purchased
hereunder in any month shall be:
(i) in respect of each month occurring in Contract Year *** to
Contract Year *** (inclusive), the Midwest Price minus the LME
Discount, minus the Molten Metal Discount;
(ii) in respect of each month occurring in Contract Year *** to
Contract Year *** (inclusive), such price as may be agreed
by the Purchaser and the Supplier by good faith negotiations
during Contract Year ***, and in the absence of such
agreement, the Midwest Price calculated for such month minus
the Molten Metal Discount; and
(iii) in respect of each month occurring subsequent to Contract Year
***, such price as may be agreed as a result of good faith
negotiations in connection with any extension of the Term
pursuant to Section 5.3 hereof.
Such amount shall be rounded upwards to the nearest Dollar.
"CONTRACT TONNAGE" has the meaning set forth in Section 2.3(c).
"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.
"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.
*** 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.
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"DEFAULTING PARTY" has the meaning set forth in Section 6.
"DELIVERY SITE" means the Purchaser's Saguenay Works facility located
at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇.
"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.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.
"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" means the London Metal Exchange.
"LME DISCOUNT" means, (i) for each of Contract Year *** to Contract
Year ***, inclusive, ***% of the Aluminum Price; (ii) for each of
Contract Year *** to Contract Year ***, inclusive, such amount as may
be agreed by the Purchaser and the Supplier as a result of good faith
negotiations that shall take place in Contract Year *** and, in the
absence of such agreement, zero (0); and (iii) for any Contract Year
from and after Contract Year ***, such amount as may be agreed by the
Purchaser and the Supplier in good faith negotiations in connection
with any extension of the Term pursuant to Section 5.3.
"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 2.6(b). As an example, the Midwest Price
*** 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.
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for the month of April will be based on metal prices published during
the month of March.
"MOLTEN METAL" means P1020 aluminum metal in molten form.
"MOLTEN METAL DISCOUNT" means, (i) for each of Contract Year *** to
Contract Year ***, inclusive, $***; (ii) for each of Contract Year ***
to Contract Year ***, inclusive, such amount as may be agreed by the
Purchaser and the Supplier as a result of good faith negotiations that
shall take place in Contract Year ***; in the absence of such
agreement, the Molten Metal Discount for Contract Years *** to ***
shall be the Molten Metal Discount for the preceding Contract Year
multiplied by a factor equal to ***; and (iii) for any Contract Year
from and after Contract Year ***, such amount as may be agreed by the
Purchaser and the Supplier as a result of good faith negotiations in
connection with any extension of the Term pursuant to Section 5.3.
"NOVELIS" means Novelis Inc.
"NOVELIS GROUP" means Novelis Inc. and its Affiliates 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.
"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.
"PURCHASER" has the meaning set forth in the Preamble to this
Agreement.
"SAGUENAY SMELTER" means those aluminum smelters of the Supplier
identified in Schedule 2.
"SAGUENAY WORKS" means the Purchaser's light gauge rolled products
facility at ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇.
"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.
*** 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.
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"SPECIFICATIONS" means such specifications for Molten Metal as may be
proposed from time to time in accordance with Section 2.7.
"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.
"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.
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. MOLTEN 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 Delivery Site" the quantities of Molten
Metal determined in accordance with this Agreement.
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(b) The Supplier shall supply Molten Metal produced by the
Supplier from a Saguenay Smelter of the Supplier's choosing or
from such other sources and locations as may be agreed.
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 Delivery Site" the quantities of Molten Metal determined in
accordance with this Agreement.
2.3 QUANTITIES OF MOLTEN METAL REQUIRED BY THE PURCHASER
(a) The Purchaser agrees to purchase and the Supplier agrees to
supply, in each Contract Year, Contract Tonnage of no more
than the Base Contract Tonnage applicable for such Contract
Year and no less than eighty percent (80%) of the Base
Contract Tonnage applicable for such Contract Year. The
purchase and supply, as applicable, by the Parties, of any
greater quantity shall be subject to further agreement of the
Parties, at each Party's discretion.
(b) The Parties shall use Commercially Reasonable Efforts to
arrange for shipping and delivery schedules to be
approximately evenly spread on a daily and weekly basis
throughout each Contract Year.
(c) On or before October 31 in each Contract Year, the Purchaser
shall submit to the Supplier a notice setting forth the annual
quantity of Molten Metal required for the next succeeding
Contract Year (the "CONTRACT TONNAGE" for such Contract Year),
which shall be no less than 80% of the Base Contract Tonnage
applicable to the next succeeding Contract Year, and no more
than the Base Contract Tonnage for such Contract Year, and an
estimated shipping schedule and quantities of Molten Metal to
be purchased in each week of such Contract Year; in
establishing such shipping schedule, the Purchaser shall
endeavour to divide the Contract Tonnage as evenly as possible
for delivery throughout each day and each week in the Contract
Year. The Contract Tonnage for Contract Year 1, and the
estimated shipping schedule and quantities of Molten Metal to
be delivered in each week during Contract Year 1, are set out
in SCHEDULE 1 hereto.
2.4 OTHER TERMS AFFECTING QUANTITY
(a) Throughout the Term of this Agreement, the Purchaser shall be
entitled to request reductions in the amount of Molten Metal
to be delivered in any week by the Supplier hereunder by
notice to the Supplier, and the Supplier shall adjust its
shipments so as to provide such reduced amount in such week,
provided such reduction is made in connection with either (i)
a planned maintenance shutdown of the Purchaser's facilities
at Saguenay Works or (ii) a statutory holiday falling in such
week, and the Parties have agreed on the
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timing for any such maintenance shut down or variation in
quantity. The Parties shall use their Commercially Reasonable
Efforts to reach agreement under this Section 2.4(a) with a
view to avoiding production disruptions or inventory buildup.
Any reduction of weekly supply pursuant to this Section 2.4(a)
shall not affect the obligations of the Purchaser and the
Supplier under Section 2.3(a).
(b) The quantity of Molten Metal which the Purchaser agrees to
purchase and the Supplier agrees to supply hereunder shall be
subject to reduction in the event the Supplier provides notice
to the Purchaser that one or more of the Saguenay Smelters
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 Saguenay Smelter would be
uneconomic or otherwise unviable for the Supplier or non
value-maximizing for the Supplier. The 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
Contract Tonnage multiplied by the annual reduction capacity
of the Saguenay Smelters (or Smelter) that has (or have) been
shut down, and divided by the total annual production capacity
of all Saguenay Smelters before giving effect to the shut
down.
(c) Subject to the Parties' obligations to purchase and supply, as
applicable, the Contract Tonnage in each Contract Year on the
terms of this Section 2, the Parties shall consult at least
once a week in order to agree on the quantities of Molten
Metal to be supplied on a daily basis. The Supplier will use
Commercially Reasonable Efforts to allocate Molten Metal
produced by the Supplier on a fair basis between the Purchaser
and facilities of the Supplier or its Affiliates that require
Molten Metal.
2.5 SUPPLIER'S SHIPPING OBLIGATIONS
(a) The Supplier shall supply to the Purchaser, in accordance with
the terms hereof, in each week, such quantity of Molten Metal
as is identified by the Purchaser in respect of such week in a
notice pursuant to Section 2.3(c) hereof, subject to any
reduction in accordance with Section 2.4.
(b) Notwithstanding the provisions of Incoterms 2000 and Section
2.10, the Supplier acknowledges its responsibility to make all
necessary arrangements for the transportation of Molten 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 Molten
Metal under this Agreement. In doing this, the Supplier shall
use Commercially Reasonable Efforts to obtain the most
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
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Reasonable Efforts to ensure that such transportation is
suitable for delivering Molten Metal to the Delivery Site.
2.6 PRICE
(a) The price payable by the Purchaser to the Supplier for each
Tonne of Molten 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 Molten
Metal shall be the ▇▇▇▇ of Lading Date.
(b) In the event that (i) the 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 Aluminum Price, the Parties shall meet with a
view to agreeing on an alternative publication or, as
applicable, an alternative 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 2.6. The
decision of the Chairman or his nominee shall be final and
binding on the Parties.
2.7 QUALITY
(a) Molten Metal supplied under this Agreement shall comply with
the definition of "Molten Metal" set forth in Section 1.1. The
Supplier shall use Commercially Reasonable Efforts to notify
the Purchaser prior to shipment of any Molten Metal that does
not meet this description. The Purchaser shall not be required
to accept delivery of any Molten Metal that does not meet this
description. If the Purchaser does not accept delivery of
Molten Metal not meeting this description, the Supplier's
obligation shall be limited to the assumption of all costs for
return of such Molten Metal to the Supplier, and for the
delivery of replacement Molten Metal to the Purchaser. All
other express or implied warranties, conditions and other
terms relating to Molten 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) The Purchaser may from time to time propose that Molten Metal
to be supplied hereunder comply with additional
specifications. The Supplier shall use Commercially Reasonable
Efforts to agree to such proposed modifications or additions.
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(c) The Parties shall cooperate in good faith to develop a plan
for addressing sodium content issues in Molten Metal supplied
from the Supplier's ▇▇▇▇ ▇▇▇▇▇▇▇ by June 30, 2005.
2.8 PAYMENT
(a) The Purchaser shall pay the Supplier in full for each shipment
of Molten Metal 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 Molten Metal does
not meet the description of Molten Metal as defined in this
Agreement 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 Molten
Metal complies with the requirements of this Agreement, the
Purchaser shall pay the invoice and, if payment is overdue
pursuant to Section 2.8(a), interest in accordance with
Section 2.8(c).
(c) If any payment required to be made pursuant to Section 2.8(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 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 Molten 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.
2.9 DELIVERY
Molten Metal shall be delivered CPT the Delivery Site. The delivery of
Molten Metal pursuant to this Section 2.9 shall be governed by
Incoterms 2000, as amended from time to time.
2.10 TITLE AND RISK OF LOSS
Title to and risk of damage to and loss of Molten Metal shall pass to
the Purchaser as the Molten Metal is delivered by the Supplier to the
carrier.
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2.11 PURCHASER AS PRINCIPAL
The Purchaser warrants that all Molten Metal to be purchased hereunder
shall be purchased for Purchaser's own consumption. The Purchaser
agrees that it shall not re-sell or otherwise make available to any
Person any Molten 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 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 Molten 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
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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 Molten 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 Molten 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, Molten Metal
of similar quality in substitution for the Molten 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 Molten 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
Molten Metal pursuant to the terms above.
In the absence of any agreement by the Parties, failure to deliver or
accept delivery of Molten 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 Molten 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 *** 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 *** consecutive
calendar months, then the Purchaser shall have the right to
terminate 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.
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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;
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 full force and 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.
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5.3 EXTENSION
One year prior to the expiration of the Term, the Parties may, upon the
request of either 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 of Molten Metal to be
purchased and supplied hereunder and pricing to apply in such further
period). 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;
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(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
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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 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:
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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, 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
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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.
10.9 SURVIVAL
The obligations of the Parties under Sections 2.6, 2.7, 2.8, 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.
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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 Molten 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 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 Molten Metal Supply
Agreement to be executed by their duly authorized representatives.
NOVELIS INC.
By:
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Name:
Title:
By:
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Name:
Title:
ALCAN INC.
By:
-----------------------------------
Name:
Title:
By:
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Name:
Title: