EXHIBIT 10.9
FOIL SUPPLY AGREEMENT
between
NOVELIS DEUTSCHLAND GMBH
(as Supplier)
and
ALCAN PACKAGING RORSCHACH AG
(as Purchaser)
IN CONNECTION WITH ALCAN'S OPERATIONS AT RORSCHACH, SWITZERLAND
DATED DECEMBER ___, 2004, WITH EFFECT AS OF THE EFFECTIVE DATE
TABLE OF CONTENTS
PAGE
----
1. DEFINITIONS AND INTERPRETATION............................................................................ 1
2. PURCHASE AND SUPPLY....................................................................................... 6
3. SUPPLY OBLIGATIONS........................................................................................ 8
4. TEMPORARY PLANT CLOSURE................................................................................... 9
5. FORCE MAJEURE............................................................................................. 9
6. PRICE AND PAYMENT......................................................................................... 10
7. QUALITY, WARRANTIES AND DISCLAIMERS....................................................................... 11
8. ASSIGNMENT................................................................................................ 12
9. EARLY TERMINATION......................................................................................... 12
10. REPRESENTATIONS AND WARRANTIES............................................................................ 13
11. CONFIDENTIALITY........................................................................................... 14
12. DISPUTE RESOLUTION........................................................................................ 15
13. MISCELLANEOUS............................................................................................. 16
Annex A - Conversion Prices
Annex B - TOP 20 Specifications
Annex C - NON-TOP 20 Specifications
FOIL SUPPLY AGREEMENT
THIS AGREEMENT is dated December ____, 2004, with effect as of the Effective
Date.
BETWEEN: NOVELIS DEUTSCHLAND GMBH, with its registered office at
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, a limited liability
company incorporated under the laws of Germany (the "SUPPLIER");
AND: ALCAN PACKAGING RORSCHACH AG, with its registered office at
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, a limited liability company
incorporated under the laws of Switzerland (the "PURCHASER").
RECITALS:
WHEREAS Alcan Inc. and Novelis Inc. 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 Inc.
(such agreement, as amended, restated or modified from time to time, the
"SEPARATION AGREEMENT").
WHEREAS the Separated Businesses (as defined in the Separation Agreement) held
by Novelis Inc. include the manufacture by the Supplier (being a wholly owned
Subsidiary of Novelis Inc.) of rolled aluminum, in particular aluminum foil
conforming to the Specifications (as defined below), including at the Supplier's
plants located in Norf, Ludenscheid and ▇▇▇▇, Germany.
WHEREAS the business of Alcan Inc. includes, inter alia, the manufacture by the
Purchaser (being a wholly owned Subsidiary of Alcan Inc.) of packaging products
incorporating aluminum foil, at the Purchaser's plant located at Rorschach,
Switzerland.
WHEREAS the Supplier wishes to supply, and the Purchaser wishes to purchase,
subject to the terms and conditions of this Agreement, certain minimum
quantities of Foil (as defined below), as set out herein.
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 5.1.
"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 Foil Supply Agreement, including all of the
Annexes hereto.
"ALCAN GROUP" means Alcan and its Subsidiaries from time to time on and
after the Effective Date.
"APPLICABLE LAW" means any applicable law, statute, rule or regulation
of any Governmental Authority or any outstanding order, judgment,
injunction, ruling or decree by any Governmental Authority.
"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 Canton of St. Gallen, Switzerland, or in the
City of Frankfurt/Main, Germany is a legal holiday or (ii) a day on
which banks are authorized by any local law to close in the Canton of
St. Gallen, Switzerland, or in the City of Frankfurt/Main, Germany.
"CLASSIFICATION" means the classification of Foil as either TOP 20 or
NON-TOP 20.
"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.
"CONFIDENTIAL INFORMATION" has the meaning set forth in Section 11.1.
"CONSENT" means any approval, consent, ratification, waiver or other
authorization.
"CONTRACT PRICE" means the price per Tonne, payable by the Purchaser
for Foil, as determined in accordance with Section 6.
"CONVERSION PRICE" means that part of the Contract Price reflecting the
conversion by the Supplier of aluminum metal to Foil, set out in ANNEX
A in respect of each Classification of Foil.
"DATE OF DELIVERY" means the date on which Foil supplied by the
Supplier is delivered DDU at the Delivery Site.
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"DDU" means, to the extent not inconsistent with the terms of this
Agreement, DDU as defined in Incoterms 2000, published by the ICC,
Paris, France, as amended from time to time.
"DEFAULTING PARTY" has the meaning set forth in Section 9.
"DELIVERY SITE" means the Purchaser's Rorschach facility in
Switzerland, located at ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇.
"DISCOUNT" means, for any Quarter, the amount equal to 1% of the LME
Price calculated for such Quarter.
"DISPUTE" has the meaning set forth in Section 12.1.
"DOLLARS" means the lawful currency of the United States of America.
"EC DUTY PAID PREMIUM" means, for any Quarter, the arithmetic average
of the daily published "EC DUTY PAID PREMIUM" prices, as published in
Metal Bulletin on each day during the Quarter preceding such Quarter,
expressed in Dollars.
"EFFECTIVE DATE" means the date on which the Supplier becomes a
Subsidiary of Arcustarget Inc. which date is expected, as of the date
of this Agreement, to be on or before December 31, 2004.
"ESCALATION NOTICE" has the meaning set out in Section 12.2.
"EURO" means the lawful currency of the member states of the European
Union that adopted a single currency in accordance with the Treaty
Establishing the European Community, as amended by the Treaty on
European Union.
"EVENT OF DEFAULT" has the meaning set forth in Section 9.
"FIRM ORDERS" has the meaning set forth in Section 2.7.
"FOIL" means aluminum foil conforming to the Specifications, produced
by the Supplier at any of the Supplier Facilities.
"FORCE MAJEURE" has the meaning set forth in Section 5.2.
"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.
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"LME PRICE" means, for each Quarter, the arithmetic average LME 3 month
seller's and buyer's price for Primary High Grade Aluminum, as
published in Metal Bulletin on each day during the Quarter preceding
such Quarter, expressed in Dollars. As an example, the LME Price for
the Quarter commencing January 1, 2005 will be based on aluminum prices
published during the Quarter commencing October 1, 2004.
"LOCAL MARKET PREMIUM" means an amount equal to Dollars 18.00 per
Tonne.
"METAL PRICE" means, subject to the application of Section 6.2, in
respect of the supply of Foil made in any Quarter, the aggregate of (i)
the LME Price for such Quarter, plus (ii) the EC Duty Paid Premium for
such Quarter, and minus (iii) the Discount for such Quarter.
"MONTH" means each calendar month throughout the Term of this
Agreement.
"MONTHLY FORECAST" has the meaning set out in Section 2.5.
"NON-TOP 20 SPECIFICATIONS" means specifications for NON-TOP 20
aluminum foil as set out in ANNEX C.
"NOVELIS GROUP" means Novelis and its Affiliates from time to time on
and after the Effective Date.
"OTIF" has the meaning set forth in Section 3.4.
"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.
"PURCHASER" has the meaning set forth in the Preamble to this
Agreement.
"PURCHASER'S BUDGET" has the meaning set out in Section 2.4.
"QUARTER" means each period of 3 Months commencing on each of January
1, April 1, July 1 and October 1.
"REPRESENTATIVES" means, with respect to any Person, any of such
Person's directors, officers, employees, agents, consultants, advisors,
accountants or attorneys.
"SALES TAXES" means any sales, use, consumption, goods and services,
value added or similar tax, duty or charge imposed pursuant to
Applicable Law.
"SEPARATION AGREEMENT" has the meaning set out in the Preamble to this
Agreement.
"SPECIFICATIONS" means the TOP 20 Specifications or the NON-TOP 20
Specifications, as applicable.
"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.
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"SUPPLIER" has the meaning set forth in the Preamble to this Agreement.
"SUPPLIER FACILITIES" means the production facilities of the Supplier
located at Norf, Ludenscheid and ▇▇▇▇, Germany.
"TERM" has the meaning set forth in Section 1.4.
"TERMINATING PARTY" has the meaning set forth in Section 9.
"THIRD PARTY" means a Person that is not a Party to this Agreement,
other than a member of Alcan Group or a member of Novelis Group.
"THIRD PARTY CLAIM" has the meaning set forth in the Separation
Agreement.
"TOP 20 SPECIFICATIONS" means the specifications for TOP 20 aluminum
foil as set out in ANNEX B.
"TONNE" means 1,000 kilograms.
"WEEKLY FORECAST" has the meaning set forth in Section 2.6.
"YEAR" means each period of 12 consecutive Months throughout the Term
of this Agreement, commencing on January 1 of each calendar year,
provided that the first Year of this Agreement shall commence on the
Effective Date and shall terminate on December 31, 2005.
"YEARLY PURCHASE AMOUNT" has the meaning set out in Section 3.1.
1.2 CURRENCY
All references to currency herein are to Euros, unless otherwise
specified.
1.3 EFFECTIVENESS
This Agreement shall come into effect on the Effective Date. The
Supplier's obligations to supply Foil and the Purchaser's obligations
to purchase Foil under this Agreement shall commence on the Effective
Date.
1.4 TERM
The term of this Agreement (the "TERM") shall be from the Effective
Date until the date which is the five (5) year anniversary thereof,
unless terminated earlier as contemplated in Section 1.5.
1.5 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 5.6 as a result of Force Majeure; or
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(d) upon the occurrence of an Event of Default, in accordance with
Section 9.
2. PURCHASE AND SUPPLY
2.1 The Purchaser agrees to purchase Foil from the Supplier, and the
Supplier agrees to sell Foil to the Purchaser, all in accordance with
and subject to the terms of this Agreement.
2.2 All deliveries of Foil pursuant to this Agreement shall be governed by
the terms of this Agreement and shall be made DDU Incoterms 2000
(provided it is not inconsistent herewith); the place of delivery will
be the Delivery Site, unless otherwise indicated in the Firm Order in
respect of such delivery, in which case the place of delivery shall be
the location indicated in such Firm Order.
2.3 The range of Foil Classifications purchased and supplied hereunder
shall consist of the following:
Type Description
---- -----------
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TOP 20 o Foil specifications manufactured by the Supplier in a reiterative manner
o Specification consisting of a standard set of technical properties (alloy, temper,
width, gauge) for Foilstock in upstream processes allowing the Supplier to
manufacture maximum variety (width, gauge) of specifications for the Purchaser
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Non - TOP o Foil specifications manufactured by the Supplier on a non-reiterative manner
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Other o Trials, special products and any other
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2.4 No later than August 30 in each Year, the Purchaser will provide to the
Supplier an annual Foil purchase budget (the "PURCHASER'S BUDGET") for
the following Year. The Purchaser's Budget shall identify the volume,
in Tonnes, of Foil to be supplied by the Supplier to the Purchaser in
the following Year. The Purchaser's Budget for the Year commencing on
the Effective Date is *** Tonnes. The Purchaser hereby undertakes to
place Firm Orders in each Year in respect of a quantity of Foil which
is not less than 93% and not more than 107% of the Purchaser's Budget
for such Year.
2.5 The Purchaser shall provide to the Supplier, on the last Business Day
of each Month, a forecast, in Tonnes, of the Foil requirements of the
Purchaser for the next succeeding 4 Months (the "MONTHLY FORECAST").
The Purchaser shall utilize its Commercially Reasonable Efforts to make
such forecasts accurate, but shall not be bound by such forecasts. The
Purchaser undertakes to place Firm Orders for quantities of Foil in
each Month which are within the range identified below for such Month,
in each case by reference to the latest Monthly Forecast delivered in
respect of such Month:
Month 4 Month 3 Month 2 Month 1
---------------------- -------------------- --------------------- --------------------
+/-8% of the Monthly +/-7% of the +/-6% of the +/-5% of the
Forecast Monthly Forecast Monthly Forecast Monthly Forecast
---------------------- -------------------- --------------------- --------------------
*** 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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2.6 The Purchaser shall provide to the Supplier, on the last Business Day
of each week, a forecast, in Tonnes, of the Foil Conforming to TOP 20
Specifications requirements of the Purchaser for the seventh (7th)
succeeding week (and, in case of the first such forecast delivered
during the Term of this Agreement, also for each of the six (6) weeks
next succeeding the week in which such forecast is delivered) (the
"WEEKLY FORECAST"). The Purchaser shall use its Commercially Reasonable
Efforts to make such forecasts accurate, but shall not be bound by such
forecasts.
2.7 The Purchaser shall provide to the Supplier, on the first Business Day
of each week, firm orders (the "FIRM ORDERS") for:
(a) the quantity of Foil conforming to TOP 20 Specifications to be
delivered hereunder in the third (3rd) succeeding week (and,
in case of the first Firm Order delivered hereunder, the
quantity to be delivered in each of the two (2) weeks next
following the week in which the Firm Order is delivered), and
(b) the quantity of Foil conforming to the NON-TOP 20
Specifications to be delivered hereunder in the seventh (7th)
succeeding week (and, in case of the first Firm Order
delivered hereunder, the quantity to be delivered in each of
the six (6) weeks next following the week in which the Firm
Order is delivered).
The Purchaser shall be bound to purchase from the Supplier the
quantities of Foil identified in such Firm Orders. Each Firm Order
shall include a delivery schedule and delivery plan in respect of the
Foil to be delivered in such week, and shall identify the place of
delivery if it is to be different from the Delivery Site. The Firm
Orders delivered pursuant to this Section 2.7 shall be used as the
basis for delivery performance evaluation in accordance with Section
3.4.
2.8 The Purchaser shall allocate the amount that is purchased in each Month
as evenly as possible in the Firm Orders delivered in respect of each
week in such Month.
2.9 Deliveries shall be made during normal working hours, being 07.00 -
16.00 EST or European Summer Time, at the Delivery Site. If the
Purchaser requires delivery outside such normal working hours, the
Supplier shall use its Commercially Reasonable Efforts to supply Foil
as requested by the Purchaser.
2.10 Title and risk of damage to, and loss of, Foil shall pass to the
Purchaser upon DDU delivery at the Delivery Site.
2.11 The Purchaser shall use its Commercially Reasonable Efforts to minimize
the turn-around time of the Supplier's transportation to the Delivery
Site. The Purchaser shall ensure that all Foil delivered to the
Delivery Site shall be unloaded within one Business Day, unless
otherwise agreed by the Parties.
2.12 At the request of the Supplier, the Purchaser's Budget may be audited
and verified by an external auditor, which shall be
PricewaterhouseCoopers, Switzerland, unless otherwise agreed by the
Parties, which audit and verification shall take place at the expense
of the Purchaser, provided it takes place no more than once per year.
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3. SUPPLY OBLIGATIONS
3.1 The "YEARLY PURCHASE AMOUNT" for each Year shall be as follows:
(a) during the Year commencing on the Effective Date, 95% of the
Purchaser's Budget for such Year;
(b) during the Year commencing January 1, 2006, 94% of the
Purchaser's Budget for such Year;
(c) during the Year commencing January 1, 2007, 93% of the
Purchaser's Budget for such Year;
(d) during the Year commencing January 1, 2008, 92% of the
Purchaser's Budget for such Year; and
(e) during the Year commencing January 1, 2009, 90% of the
Purchaser's Budget for such Year.
3.2 The Supplier shall be obligated hereunder to deliver, in response to
Firm Orders received from the Purchaser, an aggregate quantity of Foil
in each Year which is not less than the Yearly Purchase Amount for such
Year.
3.3 The Supplier shall be obligated to deliver, in response to Firm Orders
received from the Purchaser, a quantity of Foil in each Month which is
within the range identified in respect of such Month in Section 2.5, by
reference to the latest Monthly Forecast for such Month delivered by
the Purchaser pursuant to Section 2.5.
3.4 Each week, the Supplier's performance shall be evaluated on the basis
of the percentage (%) of the deliveries made on an "on time in full"
("OTIF") basis. The Supplier is obligated to provide delivery
performance of 90% OTIF. If the Supplier achieves a delivery
performance below 90% OTIF over a period of 3 (three) consecutive
Months, the Purchaser is entitled to require the Supplier, by written
notice, to hold at the Supplier's premises a "safety stock" of 100
Tonnes of Foil having Specifications identified by the Purchaser in
such notice, and the Supplier shall ensure that it maintains such
quantity of such Foil at its premises at all times after receiving such
notice from the Purchaser.
3.5 (a) The Supplier shall be responsible for sourcing the aluminum
ingots or sheet aluminum required for production of Foil to be
supplied to the Purchaser hereunder, provided that the
Purchaser may, but shall not be obligated to, provide notice
to the Supplier at least eight (8) weeks prior to a scheduled
delivery of Foil hereunder (a "SCHEDULED DELIVERY") that it
shall provide, or shall arrange for Alcan Inc. or any of its
Affiliates to provide, aluminum remelt ingot of quality
99.7%/A7E/P1020, to the Supplier for use in production of Foil
to be delivered as part of such Scheduled Delivery.
(b) In calculating the Contract Price payable for the Scheduled
Delivery, the Metal Price component of the Contract Price
shall be equal to zero for the quantity of ingot which the
Purchaser actually supplied or arranged to have supplied to
the Supplier in accordance with Section 3.5(a).
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(c) Failure by the Purchaser to arrange for delivery to the
Supplier any quantity of aluminum ingot shall not relieve the
Supplier from any of its obligations hereunder, including the
obligation to supply the agreed quantity of Foil to the
Purchaser.
4. TEMPORARY PLANT CLOSURE
4.1 Where the Supplier plans a temporary maintenance closure of, or a
period of reduced production at, the plant from which Foil is sourced
(or any part of such plant or any individual production unit) and which
may affect the Supplier's ability to supply Foil to the Purchaser in
accordance with the Supplier's obligations hereunder, it shall notify
the Purchaser accordingly not less than 7 (seven) weeks in advance. The
Supplier and the Purchaser will agree an action plan to avoid any
bottleneck in the supply of Foil to the Purchaser.
4.2 During any period of temporary closure or reduced production as
envisaged in this Section 4, the Supplier shall supply Foil to the
Purchaser on a preferential basis.
5. FORCE MAJEURE
5.1 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).
5.2 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, or any other event beyond the
reasonable control of a Party hereto whether or not similar to the
events or occurrences enumerated above. In no circumstances shall
problems with making payments constitute Force Majeure.
5.3 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
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its obligations under this Agreement. The Affected Party shall use
Commercially Reasonable Efforts steps 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.
5.4 PRO RATA ALLOCATION
If the Supplier's supply of Foil to be delivered to the Purchaser is
stopped or disrupted by an event of Force Majeure, the Supplier shall
allocate its available supplies of Foil, 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, Foil in substitution for Foil 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.
5.5 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 Foil 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
aluminum foil pursuant to the terms above.
In the absence of any agreement by the Parties, failure to deliver or
accept delivery of Foil which is excused by or results from the
operation of the foregoing provisions of this Section 5 shall not
extend the Term of this Agreement and the quantities of Foil to be sold
and purchased under this Agreement shall be reduced by the quantities
affected by such failure.
5.6 TERMINATION
(a) If an event of Force Majeure where the Affected Party is the
Supplier shall continue for more than ninety (90) days, then
the Purchaser shall have the right to terminate this
Agreement.
(b) If an event of Force Majeure where the Affected Party is the
Purchaser shall continue for more than ninety (90) days, then
the Supplier shall have the right to terminate this Agreement.
6. PRICE AND PAYMENT
6.1 The Contract Price for Foil purchased and supplied under this Agreement
in each of Years 1, 2 and 3 shall be the aggregate of the Metal Price,
the Conversion Price and the Local Market Premium applicable to such
Foil and, in each of Year 4 and 5 shall be agreed to by the Parties
prior to commencement of Year 4.
6.2 In respect of any supply of Foil hereunder which has been made
utilizing aluminum ingot supplied by Alcan or any of its Affiliates to
the Supplier in accordance with
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Section 3.5, the Metal Price applicable to such Foil shall be equal to
zero, and the Contract Price payable in respect of such Foil shall be
the Conversion Price applicable to such Foil.
6.3 Within ten (10) days following each delivery of Foil, the Supplier
shall submit to the Purchaser an invoice in respect thereof. An invoice
submitted by facsimile shall be regarded as a valid invoice for
purposes of this Agreement. All invoices shall be denominated in Euros.
For purposes of converting any portion of the Contract Price that may
be denominated in U.S. Dollars to Euros, the exchange rate to be used
shall be the rate applicable on the date of the invoice as published by
Metal Bulletin on such day.
6.4 All invoices submitted pursuant to Section 6.3 shall be paid in Euros
no later than 30 days after the date of the invoice. Payment shall be
made to the Supplier's bank account, details of which shall be provided
by the Supplier to the Purchaser from time to time in writing.
6.5 In addition to the Contract Price calculated pursuant to Section 6.1,
the Purchaser shall pay to the Supplier all applicable Sales Taxes,
which shall be identified and invoiced in the invoices delivered
pursuant to Section 6.3.
7. QUALITY, WARRANTIES AND DISCLAIMERS
7.1 The Supplier warrants for a period of 18 months from the date of
delivery that all Foil supplied hereunder shall conform to the
Specifications.
7.2 The Purchaser may request a change of the Specifications upon a minimum
of 3 (three) Months written notice to the Supplier, which notice
includes an updated form of ANNEX B and ANNEX C containing the proposed
revised Specifications. The Supplier will use all its Commercially
Reasonable Efforts to accommodate such change provided that it is
technically possible. In this event, the Conversion Price shall be
adjusted, with the agreement of the Purchaser and the Supplier, to
reflect the resulting increase or decrease in the costs to the Supplier
of conversion resulting from producing Foil to such amended
Specifications. If the Purchaser and the Supplier are unable to agree
on the amount of such increase or reduction in the Conversion Price
within 30 days after submission by the Supplier to the Purchaser of a
proposal for such increase or reduction, the Supplier shall provide to
the Purchaser detailed calculations of the cost savings or increase to
the Purchaser. The Purchaser shall consider such calculation in good
faith and either adopt or reject such calculation by notice to the
Supplier within 30 days after receipt of such calculations. Upon
agreement by the Parties, this Agreement shall be deemed amended by
replacing ANNEX B and ANNEX C with the updated form of ANNEX B and
ANNEX C provided by the Purchaser and replacing ANNEX A with an updated
ANNEX A setting out the new Conversion Prices agreed to by the
Purchaser and the Supplier, all such amendments to be effective on the
date of first supply hereunder of Foil conforming to the amended new
Specifications. If the Parties do not reach an agreement, the current
ANNEX B and ANNEX C shall remain unmodified and continue to be
applicable.
7.3 The Purchaser shall visually inspect the Foil promptly following
delivery, and notify the Supplier within fourteen (14 ) days thereafter
of any defects that were or should have been apparent from such
inspection.
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7.4 Where the Supplier has supplied the Purchaser with Foil which does not
conform to the Specifications and (if applicable) the Purchaser has
given notice in accordance with Section 7.3, the Supplier will either
replace the defective Foil with Foil conforming to the Specifications
at no extra charge (and will collect the defective Foil at its own
expense), or will refund the Contract Price (along with any applicable
taxes or other charges paid in respect thereof) paid by the Purchaser
for the defective Foil. Where the Supplier has otherwise breached its
supply obligations under Section 3, the Purchaser shall be entitled to
a compensation payment in an amount equal to the difference between the
Contract Price applicable to the supplies of Foil in question, and the
best reasonably available price at which it is able to obtain
substitute Foil (including the difference in any transport costs and
import duties borne by the Purchaser). In addition, the Purchaser shall
be entitled to compensation:
(a) for the difference between the price paid for unusable Foil
and its scrap value, and
(b) for the cost to such Purchaser of its machinery downtime
directly resulting from such breach up to a maximum amount of
twice the invoiced value of the supplied Foil.
7.5 Notwithstanding any other provisions in this Agreement, the Supplier
will be liable for, and shall indemnify the Purchaser in respect of,
all Liabilities in respect of death or personal injury to any person to
the extent that this results from the negligent supply of Foil not
conforming to the Specifications.
7.6 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 which is
subject to any indemnification or reimbursement pursuant to this
Agreement.
8. ASSIGNMENT
No Party shall assign or transfer this Agreement, in whole or in part,
or any interest or obligation arising under this Agreement, without the
prior written consent of the other Party.
9. EARLY TERMINATION
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 sixty (60) 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
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(60) days after receipt of notice from the non-defaulting
Party specifying the default with reasonable detail and
demanding that it be cured, provided that if such breach is
not capable of being cured within sixty (60) days after
receipt of such notice and the Party in default has diligently
pursued efforts to cure the default within the sixty (60) day
period, no Event of Default under this paragraph (b) shall
occur;
(c) in case of the Purchaser, Alcan Inc., or in case of the
Supplier, Novelis Inc., breaches any representation or
warranty, or fails to perform or comply with any covenant,
provision, undertaking or obligation in or of the Separation
Agreement;
(d) 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
(e) proceedings are commenced by or against such Party under the
laws of any jurisdiction relating to reorganization,
arrangement or compromise.
10. REPRESENTATIONS AND WARRANTIES
10.1 REPRESENTATIONS AND WARRANTIES
Each Party represents and warrants to and in favour of the other Party
as follows and acknowledges that the other Party is relying upon such
representations and warranties in connection with the matters
contemplated by this Agreement:
(a) it is duly incorporated and organized and is validly existing
under the laws of its jurisdiction of incorporation and has
the corporate power and authority to own its assets and to
conduct its businesses and to perform its obligations
hereunder;
(b) the execution and delivery of this Agreement by it and the
completion by it of the transactions contemplated herein, do
not and will not result in the breach of, or violate any term
or provision of, its articles or by-laws;
(c) it is not subject to any outstanding injunction, judgment or
order of any Governmental Authority which would prevent or
materially delay the transactions contemplated by this
Agreement; there are no civil, criminal or administrative
claims, actions, suits, demands, proceedings, hearings or
investigations pending or, to the Party's knowledge,
threatened, at law, in equity or otherwise, in, before, or by,
any Governmental Authority which (if successful) would prevent
or materially delay the consummation of the transactions
contemplated by this Agreement;
(d) no dissolution, winding up, bankruptcy, liquidation or similar
proceeding has been commenced, or is pending or proposed, in
respect of it; and
(e) the execution and delivery of this Agreement and the
completion of the transactions contemplated herein, have been
duly approved by its Managing
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Director and this Agreement constitutes legal, valid and
binding obligations of such Party enforceable against it in
accordance with its terms, subject to legislation relating to
bankruptcy, insolvency, reorganization and other similar
legislation of general application and other laws affecting
the enforcement of creditors' rights generally, to general
principles of equity and limitations upon the enforcement of
indemnification for fines or penalties imposed by law and to
the discretionary power of the courts as regards specific
performance or injunctive relief.
11. CONFIDENTIALITY
11.1 Subject to Section 11.3, each of the Parties shall hold, and shall
cause its respective Affiliates (whether now an Affiliate or hereafter
becoming an Affiliate) and its Representatives to hold, in strict
confidence, with at least the same degree of care that it applies to
its own confidential and proprietary information, all confidential and
proprietary information concerning the other Party and its respective
Affiliates (whether now an Affiliate or hereafter becoming an
Affiliate) that is either in its possession or is furnished by such
other Party or Affiliates (whether now an Affiliate or hereafter
becoming an Affiliate) of any such Party or its Representatives at any
time pursuant to this Agreement or the transactions contemplated hereby
(any such information referred to herein as "CONFIDENTIAL
INFORMATION"), and shall not use any such Confidential Information
other than for such purposes as shall be expressly permitted hereunder.
Notwithstanding the foregoing, Confidential Information shall not
include information that is or was:
(i) in the public domain through no fault of such Party or any of
its Affiliates (whether now an Affiliate or hereafter becoming
an Affiliate) or any of its respective Representatives,
(ii) lawfully acquired by such Party or any of its Affiliates
(whether now an Affiliate or hereafter becoming an Affiliate)
from a Third Party not bound by a confidentiality obligation,
or
(iii) independently generated or developed by Persons who do not
have access to, or descriptions of, any such confidential or
proprietary information of the other Party (or any of its
Affiliates (whether now an Affiliate or hereafter becoming an
Affiliate)).
11.2 Each Party agrees not to release or disclose, or permit to be released
or disclosed, any Confidential Information to any other Person, except
its Representatives who need to know such Confidential Information (who
shall be advised of their obligations hereunder with respect to such
Confidential Information), except in compliance with Section 11.3.
11.3 In the event that any Party or any of its Affiliates (whether now an
Affiliate or hereafter becoming an Affiliate) either determines on the
advice of its counsel that it is required to disclose any Confidential
Information pursuant to Applicable Law or receives any demand under
lawful process or from any Governmental Authority to disclose or
provide Confidential Information of the other Party (or any Affiliate
(whether now an Affiliate or hereafter becoming an Affiliate) of such
other Party), such Party shall, to the extent permitted by Applicable
Law, notify the other Party prior to it or its Affiliates (whether now
an Affiliate or hereafter becoming an Affiliate) disclosing or
providing
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such Confidential Information, and shall use its Commercially
Reasonable Efforts to cooperate at the expense of the requesting Party
in seeking any reasonable protective arrangements requested by such
other Party. Subject to the foregoing, the Person that receives such
request may thereafter disclose or provide such Confidential
Information to the extent (but only to the extent) required by such
Applicable Law (as so advised by legal counsel) or by lawful process or
by such Governmental Authority and shall promptly provide the Person
that receives such request with a copy of the Confidential Information
so disclosed, in the same form and format as disclosed, together with a
list of all Persons to whom such Confidential Information was
disclosed.
12. DISPUTE RESOLUTION
12.1 DISPUTES
The provisions of this Section 12 shall govern all disputes,
controversies or claims (whether arising in contract, delict, tort or
otherwise) between the Parties that may arise out of, or relate to, or
arise under or in connection with, this Agreement or the transactions
contemplated hereby (a "DISPUTE").
12.2 NEGOTIATION
The Parties hereby undertake to attempt in good faith to resolve any
Dispute by way of negotiation between senior executives of the Parties
who have authority to settle such Dispute. In furtherance of the
foregoing, any Party may initiate the negotiation by way of a notice
(an "ESCALATION NOTICE") demanding an in-person meeting involving
representatives of the Parties at a senior level of management of the
Parties (or if the Parties agree, of the appropriate strategic business
unit or division within such Party). A copy of any Escalation Notice
shall be given to the Chief Legal Officer of each Party (which copy
shall state that it is an Escalation Notice pursuant to this
Agreement). Any agenda, location or procedures for such negotiation may
be established by the Parties from time to time; provided, however,
that the negotiations shall be completed within thirty (30) days of the
date of the Escalation Notice or within such longer period as the
Parties may agree in writing prior to the expiration of the initial
thirty-day period.
12.3 ARBITRATION
(a) Any Dispute which has not been resolved by negotiation as
provided herein within thirty (30) days of the date of the
Escalation Notice or such extended period as may be agreed to
by the Parties, shall be referred to and finally resolved by
arbitration in accordance with the Arbitration Rules of the
ICC then in force.
(b) The arbitral tribunal shall consist of three arbitrators. The
place of arbitration shall be Zurich, Switzerland. The
language of the arbitration, and all communications in respect
thereof, shall be in English.
(c) The costs of the arbitration shall be fixed by the arbitral
tribunal and shall be borne by the unsuccessful Party, unless
the arbitral tribunal, in its discretion, determines a
different apportionment, taking all relevant circumstances
into account. The costs of arbitration include: (i) the fees
and disbursements of the arbitrators, (ii) reasonable travel
and other expenses of witnesses; (iii) the reasonable fees and
expenses of expert witnesses; and (iv) the costs of legal
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representation and assistance, to the extent that the arbitral
tribunal determines that the amount of such costs is
reasonable.
(d) The arbitral tribunal shall endeavour to issue its award
within sixty (60) days of the last hearing of the substantive
issues in dispute between the Parties; however, the arbitral
tribunal shall not lose jurisdiction if it fails to respect
this delay. The arbitral award shall be final and binding.
(e) Neither the Parties (including their auditors and insurers)
nor their counsel and any Person necessary to the conduct of
the arbitration nor the arbitrators shall disclose the
existence, content (including submissions and any evidence or
documents presented or exchanged), or results of any
arbitration hereunder without the prior written consent of the
Parties, except as required by Applicable Law or the
applicable rules of an applicable stock exchange.
12.4 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.
13. MISCELLANEOUS
13.1 CONSTRUCTION
In this Agreement and in the Annexes hereto, unless a clear contrary
intention appears:
(a) the singular number includes the plural number and vice versa;
(b) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and
assigns are not prohibited by this Agreement, and reference to
a Person in a particular capacity excludes such Person in any
other capacity or individually;
(c) reference to any gender includes each other gender;
(d) reference to any agreement, document or instrument means such
agreement, document or instrument as amended, modified,
supplemented or restated and in effect from time to time in
accordance with the terms thereof subject to compliance with
the requirements set forth herein;
(e) reference to any Applicable Law means such Applicable Law as
amended, modified, codified, replaced or re-enacted, in whole
or in part, and in effect from time to time, including rules
and regulations promulgated thereunder, and reference to any
section or other provision of any Applicable Law means that
provision of such Applicable Law from time to time in effect
and constituting the substantive amendment, modification,
codification, replacement or re-enactment of such section or
other provision;
(f) "herein", "hereby", "hereunder," "hereof," "hereto," and words
of similar import shall be deemed references to this Agreement
as a whole and not to any particular Article, Section or other
provision hereof;
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(g) "including" (and with correlative meaning "include") means
including without limiting the generality of any description
preceding such term;
(h) the Table of Contents and headings are for convenience of
reference only and shall not affect the construction or
interpretation of this Agreement;
(i) with respect to the determination of any period of time,
"from" means "from and including" and "to" means "to but
excluding"; and
(j) references to documents, instruments or agreements shall be
deemed to refer as well to all addenda, exhibits, schedules or
amendments thereto.
13.2 PAYMENT TERMS
Any amount to be paid or reimbursed by one Party to the other under
this Agreement, save as expressly provided in Sections 2, 3 and 6,
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.
13.3 NOTICES
All notices or 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:
Alcan Packaging Rorschach ▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
IF TO THE SUPPLIER, TO:
Novelis ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
Fax: o
Attention: o
Any Party may, by notice to the other Party, change the address or
fax number to which such notices are to be given.
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13.4 GOVERNING LAW
This Agreement shall be governed by and construed and interpreted in
accordance with German law, with the exclusion of any conflict of law
provisions thereof, as to all matters, including matters of validity,
construction, effect, enforceability, performance and remedies.
13.5 JUDGMENT CURRENCY
The obligations of a Party to make payments hereunder shall not be
discharged by an amount paid in any currency other than Euros, whether
pursuant to a court judgment or arbitral award or otherwise, to the
extent that the amount so paid upon conversion to Euros, and
transferred to an account indicated by the Party to receive such funds
under normal banking procedures does not yield the amount of Euros,
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 Euros, any
difference between the sum originally due in Euros, and the amount of
Euros, received upon any such conversion and transfer.
13.6 ENTIRE AGREEMENT
This Agreement and the exhibits, schedules, annexes and appendices
hereto and the specific agreements contemplated herein, 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.
13.7 CONFLICTS
In case of any conflict or inconsistency between this Agreement and the
Separation Agreement, this Agreement shall prevail.
13.8 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.
13.9 SURVIVAL
The obligations of the Parties under Sections 6, 11, 12, 13.4 and 13.9
and liability for the breach of any obligation contained herein shall
survive the expiration or earlier termination of this Agreement.
13.10 EXECUTION IN COUNTERPARTS
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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.
13.11 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.
13.12 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.
13.13 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.
13.14 TAXES, ROYALTIES AND DUTIES
Subject to Section 6.5, (i) all royalties, taxes and duties imposed or
levied on any Foil delivered hereunder shall be for the account of and
paid by the Supplier to the point of legal delivery, which shall be as
stated in Incoterms 2000 in respect of goods sold DDU, and (ii) all
royalties, taxes and duties imposed or levied on the Foil after such
delivery shall be for the account of and paid by the Purchaser.
13.15 LIMITATIONS OF LIABILITY
Except as otherwise provided herein, neither Party shall be liable to
the other Party for any indirect, collateral, incidental, special,
consequential or punitive damages arising in any way out of this
Agreement; provided, however, that the foregoing limitations shall not
limit any Party's indemnification obligations for Liabilities with
respect to Third Party Claims as set forth in Article IX of the
Separation Agreement (as if such Article was set out in full herein by
reference to the obligations of the Parties hereunder).
13.16 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.
13.17 ENGLISH LANGUAGE
All documents to be furnished or communications to be made or given
under this Agreement in connection with any Dispute shall be in the
English language or, if in another language, shall be accompanied by a
translation into English certified by the
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Party making or furnishing such documents or communications, which
translation shall be the governing version between the Parties hereto.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.]
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IN WITNESS WHEREOF, the Parties hereto have caused this Foil Supply Agreement to
be executed by their duly authorized representatives.
NOVELIS DEUTSCHLAND GMBH
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
ALCAN PACKAGING RORSCHACH AG
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
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