Exhibit 10(v)
PET RESIN SUPPLY AGREEMENT
THIS PET RESIN SUPPLY AGREEMENT ("Agreement") is made this 28th day of
December 1995 by and among AKZO NOBEL FIBERS B.V., a company with limited
liability incorporated under the laws of The Netherlands and having its
registered office at Xxxxxxxxx 00, 0000 XX Xxxxxx ("Supplier"), and
XXXXXXX B.V., a company with limited liability incorporated under the laws
of The Netherlands and having its seat (statutaire zetel) at Emmen
("Xxxxxxx").
WHEREAS, Xxxxxxx has agreed to purchase a portion of the assets and
business of Supplier pursuant to and as described in the Agreement for the
Sale and Purchase of a Business among Xxxxxxx B.V. and Supplier dated 22
December 1995 (the "Asset Purchase Agreement");
WHEREAS, the assets so purchased by Xxxxxxx from Supplier include all of
the continuous polymerization and continuous post condensation assets at
Akzo's Emmen facility, which plant produces PET Resin;
WHEREAS, Xxxxxxx and Supplier have agreed that Xxxxxxx shall purchase
certain quantities of PET Resin manufactured at Akzo's locations at Emmen
and Oberbruch and Supplier is willing to sell such PET Resin to Xxxxxxx on
the terms and conditions set forth in this Agreement; and
WHEREAS, this Agreement is being executed and delivered at Completion
pursuant to the obligations of the parties under the Asset Purchase
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and in the Asset Purchase Agreement and with the
intention of being legally bound, Xxxxxxx and Supplier hereby agree as
follows:
Article 1. Definitions
1.1 Unless otherwise stated in this Agreement, the following terms shall
have the following meanings, the following definitions to be equally
applicable to both the singular and plural forms of any of the terms
herein defined:
"Additives": all substances other than Raw Materials used by Supplier
to produce Product on its batch polymerization units.
"Asset Purchase Agreement": as defined in the recitals of this
Agreement.
"Average Exchange Rate": the weighted arithmetic average of the daily
closing mid-point exchange rates between NLG and each Raw Material
Currency as published by the London Financial Times.
"Base Polymer": as defined in Article 2.7 hereof.
"Capital and Expense Estimate": as defined in Article 2.3 (C) hereof.
"DDP" (Delivery Duty Paid): has the meaning given to it in INCOTERMS
(1990).
"Delivery Schedule": as defined in Article 2.4 hereof.
"DMT": dimethyl terephthalate.
"EG": ethylene glycol.
"Energy Costs": the energy costs incurred by Supplier in the
manufacture of a Product, calculated pursuant to Article 2.6.
"Energy Rate Movement": the increase or decrease (stated as a
percentage) of the "P" value for the calculation of natural gas prices as
published by the Dutch Gas Board (N.V. Nederlandse Gasunie), using the "P"
value as at 31 December 1994 as the base value.
"Fixed Charge": as defined in Article 2.5 hereof.
"Fixed Costs": the fixed costs incurred by Supplier in the
manufacture of a Product, calculated pursuant to Article 2.6.
"Fixed Quote": as defined in Article 2.3 (C).
"General Rate Movement": the increase or decrease (stated as a
percentage) in general retail prices in The Netherlands as reflected in
the index figures for all households (consumentenprijsindex - alle
huishoudens) published by the Netherlands' Central Office of Statistics
(Centraal Bureau voor de Statistiek), using such index figure as at 31
December 1994 as the base figure.
"Labor Costs": the labor costs incurred by Supplier in the
manufacture of a Product, calculated pursuant to Article 2.6.
"Labor Rate Movement": the average increase or decrease (stated as a
percentage) in hourly wages for the chemical industry in The Netherlands
as reflected in the index figures therefor (indexcijfers van de
regelingslonen van volwassen werknemers; jaargemiddelde voor de lonen per
uur voor de chemische industrie) published by the Netherlands' Central
Office of Statistics (Centraal Bureau voor de Statistiek), using such
index figure as at 31 December 1994 as the base figure.
"Monthly Quantity": in respect of an order in a Delivery Schedule for
any calendar month, such total quantity of Product which results from
dividing by three hundred and sixty-five (365) and then multiplying by the
number of days in such month the total quantity of Product that must be
sold and purchased pursuant to Article 2.1 for the Year in which such
month falls.
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"NLG": Dutch Guilders.
"Other Costs": all costs incurred by Supplier in the manufacture of a
Product, other than the Energy Costs, Fixed Costs and Labor Costs of such
Product, calculated pursuant to Article 2.6.
"PET Resin": polyethylene terephthalate resin for packaging resin
purposes, including C-PET resin and A-PET resin.
"Product": PET Resin of a type and conforming to a product
specification and the associated process control limits set forth in the
attached Exhibit PS 1 (and such exhibit as it may be amended in accordance
with this Agreement).
"Product Change": as defined in Article 2.3 (B) hereof.
"Product Change Estimate": as defined in Article 2.3 (C) hereof.
"Product Change Notification": as defined in Article 2.3 (B) hereof.
"Product Change Response": as defined in Article 2.3 (C) hereof.
"Q Grade Product": a Product the manufacture of which involves the
use of a crystalliser.
"Raw Material": EG, DMT and paraxylene or any of them.
"Raw Material Charge": as defined in Article 2.5 hereof.
"Raw Material Currency": each currency in which any supplier of Raw
Materials or Additives to Supplier invoices Supplier.
"Relevant Month": the month during which Product is delivered to
Xxxxxxx pursuant to Article 5 hereof.
"RM Notification": as defined in Article 3.1 hereof.
"Specialty Grade Product": a Product of the grade XX0-000, X00-000 or
AX4-706, as listed in Exhibit PS 1, or of such other type as shall apply
pursuant to Article 2.3.
"Supplier": as defined in the opening paragraph of this Agreement.
"Ton": a metric ton of one thousand kilograms (1,000 kg).
"Xxxxxxx": as defined in the opening paragraph of this Agreement.
"Year": a calendar year.
1.2 Capitalized terms used herein without definition shall have the
meanings assigned to them in the Asset Purchase Agreement.
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Article 2 Availability of Product and Purchase and Sale of Same
2.1 Subject to the other terms of this Agreement, Supplier agrees to
manufacture at its facilities at Oberbruch, Germany and/or Emmen, The
Netherlands and to sell to Xxxxxxx, and Xxxxxxx agrees to purchase from
Supplier, for delivery in each of the Years specified below, the
quantities of Product specified in relation thereto:
1996 37,000 Tons
1997 31,000 Tons
1998 21,000 Tons
1999 11,000 Tons
2000 1,000 Tons
To determine whether the above quantities have been delivered during
the relevant Year, only quantities delivered during that Year pursuant to
this Article 2, and excluding quantities delivered pursuant to Article 4,
shall be taken into account.
Supplier may at any time change the place of production of a specific
Product type, provided that Supplier gives at least 30 days' written
notice of such change to Xxxxxxx.
2.2 Xxxxxxx shall in each Delivery Schedule elect the type or types of
Product it wishes to purchase which shall be from among the types
specified in Exhibit PS 1 or such other types as shall apply pursuant to
Article 2.3 hereof, and Supplier shall sell Product to Xxxxxxx in
accordance with such election, provided that the quantities described in
Article 2.1 in respect of each of the Years 1996, 1997, 1998, and 1999
shall not include less than 1,000 Tons nor more than 6,000 Tons of
Specialty Grade Product. If the crystalliser for any Q Grade Product
ordered by Xxxxxxx does not work Supplier may supply Xxxxxxx with such
Product without the benefit of a crystalliser, provided Supplier shall
promptly inform Xxxxxxx thereof and keep such Product in separate batches
with separate lot numbers and provided further that the non-crystallised
Product is acceptable to Xxxxxxx'x customer therefor and that Xxxxxxx may
consequently adjust the volumes of individual types of Product ordered in
the relevant Delivery Schedule; if all of the foregoing is satisfied, no
adjustment to the price to be paid by Xxxxxxx for any such non-
crystallised Product shall be made.
2.3 (A) Supplier and Xxxxxxx acknowledge that those specifications of
each Product and those process control limits for the Emmen and Oberbruch
facilities set out in the attached Exhibit PS 1 are agreed but are
incomplete. Exhibit PS 1 lists each item that remains to be agreed for
each Product. The parties hereby agree to use their best efforts to agree
the specifications and process control limits of all the incomplete items
by 31 March 1996. Upon reaching such agreement the parties shall sign an
amendment to the attached Exhibit PS 1 listing the complete specifications
for each Product and listing (or cross-referencing other documents which
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list) all the process control limits for the Emmen and Oberbruch
facilities.
(B) Xxxxxxx may from time to time by reasonable advance written
notice to Supplier add further types and/or specifications of Product or
change the types and/or specifications of Product, to any other type or
specification of PET Resin, whereupon the other type or specification
shall be included in the definition of "Product" herein. Each type or
specification change so made by Xxxxxxx is hereinafter called a "Product
Change". Each written notice of any Product Change (hereinafter referred
to as a "Product Change Notification") shall contain a revised Product
specification sheet in the same format as detailed in the attached Exhibit
PS 1 (and such exhibit as it may be amended in accordance with this
Agreement) and a general description of the new Product.
(C) Supplier shall accept the Product Change described in the
Product Change Notification unless Supplier can demonstrate that Supplier
is unable to make such Product Change due to technical or other reasons
which Supplier cannot overcome by taking reasonable measures. Within 45
(forty-five) days after receipt of the Product Change Notification,
Supplier shall provide a written response to Xxxxxxx (a "Product Change
Response") by either accepting the Product Change as described in the
Product Change Notification subject to agreement on items (i) through (iv)
below, or informing and demonstrating to Xxxxxxx that pursuant to the
preceding sentence Supplier is not obliged to accept such Product Change.
If pursuant to the preceding paragraph Supplier does not accept the
Product Change, and if and to the extent such non-acceptance would lead to
Xxxxxxx not being able to sell the Products specified in Exhibit PS 1 at
commercial rates, Xxxxxxx may elect to reduce the annual quantities of
Product specified in Article 2.1 which it is required to purchase and take
delivery of by such quantities of Product which equal the quantities of
Product in respect of which Supplier has not accepted such Product Change.
If Supplier accepts the Product Change, then the Product Change
Response shall include the following estimates (the "Product Change
Estimates"):
(i) Supplier's best estimate of the up-front capital costs and
developmental expenses, together with minimum and maximum figures
therefor, to be incurred by Supplier to make the Product Change (the
"Capital and Expense Estimate");
(ii) Supplier's best estimate of the Fixed Charge applicable to
the new Product, which shall be based on the Fixed Charge of the most
similar Product listed in the attached Exhibit PS 1 (and such exhibit as
it may be amended in accordance with this Agreement) plus or minus
Supplier's best estimate of the difference, if any, between Supplier's
labor costs and overheads with respect to the new Product and Supplier's
labor costs and overheads with respect to such most similar Product;
(iii) Supplier's estimate of any increase or loss of throughput
on Supplier's batch polymerization and post-condensation units resulting
from the Product Change; and
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(iv) Supplier's best estimate of the time required before the
Product Change can be accomplished, taking into account any possible time
for any necessary construction of relevant tangible assets.
Within 7 (seven) days after receipt of a Product Change Response,
Xxxxxxx may elect to send a written notice to Supplier requiring Supplier
to furnish Xxxxxxx within fourteen (14) days thereafter with a fixed quote
for the up-front capital costs and developmental expenses to be incurred
by Supplier to make the Product Change (a "Fixed Quote"). If Xxxxxxx makes
such election the Fixed Quote shall replace the Capital and Expense
Estimate. Within 14 (fourteen) days after receipt of the Product Change
Response or (if applicable) the Fixed Quote, Xxxxxxx shall send a written
notice to Supplier informing Supplier whether Xxxxxxx accepts the Product
Change Estimates and (if applicable) the Fixed Quote. If Xxxxxxx accepts
the Product Change Estimates and (if applicable) the Fixed Quote an
amendment to Exhibit PS 1 shall be signed by both parties. If there is a
Fixed Quote, Xxxxxxx shall reimburse Supplier for any up-front capital
costs and expenses up to but not exceeding the Fixed Quote. If there is no
Fixed Quote, the parties shall agree on a time frame for the project to be
performed and on appropriate information reporting and estimating
procedures; Xxxxxxx shall reimburse Supplier for all up-front capital
costs and expenses agreed to pursuant to such procedures. All
reimbursements shall be made within 30 days after the later of the date on
which Supplier incurred such costs or expenses and the date of receipt by
Xxxxxxx of Supplier's invoice therefor.
Furthermore, in the event that a Product Change results in an
increase or loss of throughput, the amount that Supplier is obligated to
produce and make available to Xxxxxxx in any month or Year (as stated in
Article 2.1), shall be either increased or decreased by the amount of the
change of throughput as a result of the Product Change. Supplier shall
begin to produce the new Product for Xxxxxxx no later than the sum of (i)
Supplier's estimate of the time required to make the Product Change as
detailed in the Product Change Response and (ii) 30 days.
Following the implementation of a Product Change on the basis of a
Product Change Estimate, Xxxxxxx shall have the right to have an internal
or external auditor examine Supplier's pertinent records for the purpose
of establishing the actual amounts of those costs incurred by Supplier
which were the subject of the Product Change Estimates.
In the event that Xxxxxxx informs Supplier that Xxxxxxx does not
accept the Product Change Estimates or (if applicable) the Fixed Quote,
then the parties agree that they will diligently consult in order to agree
upon alternative appropriate estimates/quotations.
(D) The parties agree that if after the date hereof different types
and/or specifications of Product are required pursuant to any change in
any law or regulation of the European Union or of any European country in
which Xxxxxxx sells Product, such different types and/or specifications
shall constitute a Product Change. If such Product Change is not
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technically capable of being manufactured on Supplier's batch
polymerization and post-condensation units then Xxxxxxx may terminate this
Agreement with immediate effect.
(E) The parties agree that Supplier shall have the right to cease
manufacturing a Product after a Product Change if Supplier determines in
good faith that as a result of the Product Change the Product or the only
process to produce the Product on Supplier's production units infringes
any third party patent or other proprietary rights. If such an event shall
occur, Xxxxxxx shall provide Supplier a Product Change Notification within
seven (7) days after the Supplier has informed Xxxxxxx in writing that it
needs a Product Change. All terms and conditions detailed in this Article
2.3 for Product Change shall then apply.
2.4 On or before the 20th day of each calendar month during the term of
this Agreement, and on the understanding that prior thereto Xxxxxxx will
have taken into account (and if necessary consulted with Supplier
regarding) Supplier's limited flexibility in its production of bulk
Products and Specialty Grade Products, Xxxxxxx shall furnish Supplier with
a written schedule setting forth (a) the firm delivery schedule of
Xxxxxxx'x weekly purchase requirements for Product under this Article 2
for the next calendar month, specifying the volume of each Product type
required, the date of delivery and the manner of delivery in accordance
with Article 5.1, and (b) its best estimates of its purchase requirements
hereunder for the next two succeeding calendar months, specifying the
volume of each Product type estimated to be required. Each such firm
delivery schedule furnished to Supplier pursuant to this Article 2.4 is
hereinafter referred to as a "Delivery Schedule" and will upon being so
furnished be binding on both parties. Except with Supplier's concurrence
or in the event of an impediment as referred to in Article 14.1 hereof,
each Delivery Schedule shall order for the relevant calendar month the
Monthly Quantity, provided that Xxxxxxx may in each Delivery Schedule
order up to 5% more or less of the Monthly Quantity.
2.5 The price payable by Xxxxxxx to Supplier for Product delivered shall
be the sum of the fixed charge with respect to such Product specified in
Article 2.6 (the "Fixed Charge") and the raw materials charge with respect
to such Product specified in Article 2.7 (the "Raw Material Charge").
2.6 The Fixed Charge for each Product specified below shall be the total
of the Fixed Costs, Labor Costs, Energy Costs and Other Costs of such
Product. The Fixed Costs of each Product shall be, and shall remain
throughout the term of this Agreement, the amount per Ton specified in
relation thereto in the following table. The initial Labor Costs, Energy
Costs, Other Costs and Fixed Charge of each Product shall be the amounts
per Ton specified in relation thereto in the following table:
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Product Fixed Labor Energy Other Fixed
Type Costs Costs Costs Costs Charge
(NLG per (NLG per (NLG per (NLG per (NLG per
Ton) Ton) Ton) Ton) Ton)
D04 300 (Q) 220 220 60 100 600
X00 000 (Q) 220 220 60 100 600
A06 700 580 400 100 120 1,200
A06 300 (Q) 240 240 .65 105 650
AX4 706 235 150 .45 70 500
M03 300 (Q) See Article 2.10
Labor Costs of each Product type shall be adjusted annually by 80% of
the Labor Rate Movement for the preceding Year. Labor Costs shall be
deemed to include labor costs incurred in packaging a Product to Xxxxxxx'x
order pursuant to Article 5.2 but only to the extent that, on an annual
basis, the total quantity of all packaged Products sold hereunder does not
exceed 25% of the total quantity of Products sold hereunder.
Energy Costs and Other Costs of each Product type shall be adjusted
annually by the same respective percentages as the Energy Rate Movement
and the General Rate Movement for the preceding Year.
Changes to the Fixed Charge shall only be made once yearly with
effect from 1 January, to take into account increases and/or decreases in
Labor Costs, Energy Costs and/or Other Costs in the preceding Year.
Supplier shall give notice of its intention to change the Fixed Charge
and, except in 1995, will provide Xxxxxxx with an estimate of the Fixed
Charge for the next year no later than 1 November of the Year preceding
the increase or decrease. No later than 1 March of such Year or within 5
days after the relevant index is published, Supplier will advise Xxxxxxx
of the increase or decrease of the Fixed Charge determined in accordance
with this Article. Any adjustment resulting from a difference between the
estimated increase or decrease and the actual increase or decrease shall,
if found by Xxxxxxx to be correct, be charged or credited as the case may
be in the next following invoice.
2.7 The Raw Material Charge shall be in NLG and calculated as follows:
a. the cost of Raw Material used by Supplier in the manufacture of
Product which has not been post-condensated ("Base Polymer").
The cost of Raw Material used by Supplier in the manufacture of
Base Polymer shall be calculated and based on the average cost (excluding
freight costs only where these are separately stated) per Ton paid or
payable by Supplier for all Raw Material delivered to any of its European
fiber operations during the Relevant Month, after taking into account all
discounts, rebates, allowances or other price reductions. The total cost
of Raw Materials used by Supplier in the manufacture of Base Polymer shall
be calculated as set out in Exhibit PS 5.
plus
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b. the cost of all Additives used by Supplier in the manufacture of
Base Polymer.
The cost of Additives used by Supplier in the manufacture of Base
Polymer shall be calculated based on the average cost (excluding freight
costs only when these are separately stated) paid or payable by Supplier
for all additives delivered to Supplier at its sites in Emmen and/or
Oberbruch during the Relevant Month, after taking into account all
discounts, rebates, allowances or other price reductions. The total cost
of Additives used by Supplier in the manufacture of Base Polymer shall be
calculated as set out in Exhibit PS 5.
plus
c. freight costs.
Freight costs shall be the actual costs of freight, provided these
are separately stated, for delivery of those Raw Materials and Additives
used by Supplier in the manufacture of Base Polymer from the supplier
thereof to the site where such Raw Materials and Additives are processed.
The total costs of such freight shall be calculated as set out in Exhibit
PS 5.
less
d. an amount to reflect the value of methanol recovered in the
process of manufacturing Base Polymer.
The value of methanol shall be calculated on the basis of the average
actual price received by Supplier for sales of methanol by Supplier during
the Relevant Month. The total value of such methanol shall be calculated
as set out in Exhibit PS 5.
plus
e. for Product A06 700 only, the additional cost of Raw Materials
which are necessary in the compounding process.
Such additional costs shall be calculated and based on the average
cost (excluding freight costs only where these are separately stated) per
Ton paid or payable by Supplier for all such Raw Materials delivered to
any of its European fiber operations during the Relevant Month, after
taking into account all discounts, rebates, allowances or other price
reductions.
The cost of Raw Material used by Supplier in the process of post-
condensation of the Product includes 3% off-specification material. If the
wastage factor in the post-condensation process exceeds 3% in any Relevant
Month, then the kilograms of Base Polymer used for the calculation of the
Base Polymer Raw Material cost shall be adjusted to 97% of the Base
Polymer produced.
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In calculating the various costs and prices referred to in a. through
e. above, the exchange rates between NLG and each Raw Material Currency
applied by Supplier for its internal accounting purposes during the
Relevant Month will be used, provided that if Xxxxxxx can demonstrate that
the total amount of such costs and prices is more than 2% greater than the
amount thereof would have been had the Average Exchange Rate during such
month been used, such Average Exchange Rate shall be used in respect
thereof instead.
2.8 Supplier will invoice Xxxxxxx on or about the tenth day of each
calender month for:
a. as an advance payment, 1/12 (one twelfth) of the Fixed Charge
for the annual quantity of Product type D04 300 (Q) specified in Article
2.1 times 95%; plus
b. the Raw Material Charge for the actual quantities of each type
of Product delivered during the preceding month; plus
c. the Fixed Charge for the actual quantities of each type of
Product delivered during the preceding month in excess of the advance
payments under a; plus
d. any costs of packaging of Products which are for Xxxxxxx'x
account pursuant to Article 5.2.
Xxxxxxx will pay each invoice which is in accordance with this
Agreement by the end of the month in which such invoice is received.
2.9 All waste generated in the process of post-condensation, including
material not conforming to a specification set forth in the attached
Exhibit PS 1 (and such exhibit as it may be amended in accordance with
this Agreement), produced by Supplier in the manufacturing of Product
hereunder up to the 3% limitation set out in Article 2.7 shall be owned by
Xxxxxxx and shall be delivered by Supplier to Xxxxxxx at such place as
Xxxxxxx may direct no later than 30 days after its date of manufacture,
Xxxxxxx reimbursing Supplier for all freight costs and all costs of
packaging material incurred in connection therewith.
Supplier shall offer (a) any waste generated in the process of post-
condensation including such off-specification material in excess of the
said 3% limitation and (b) any waste generated in the process of
polymerization to Xxxxxxx for purchase at the Raw Material Charge in
respect of such waste calculated in accordance with Article 2.7; such
waste including such off-specification material shall be delivered to
Xxxxxxx at such place as Xxxxxxx shall direct no later than 30 days after
its date of manufacture, Xxxxxxx reimbursing Supplier for all freight
costs and all costs of packaging material incurred in connection
therewith.
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2.10 Upon Xxxxxxx'x request, Supplier shall, if possible, deliver the
Product type MO3 300 (Q). It is understood by Xxxxxxx that the delivery of
this Product type may result in a reduction of through-put and/or require a
change in mix, thereby reducing the amount that Supplier is obligated to
produce and make available to Xxxxxxx in any month or Year, as stated in
Article 2.1.
The Fixed Charge for Product type MO3 300(Q) will be based on the cost
of Product type DO4 300 (Q) plus any additional expenses incurred. For
greater certainty, Xxxxxxx understands that the Fixed Charge for MO3 300(Q)
may be greater than the Fixed Charge for DO4 300(Q).
Article 3 Special Provisions relating to Raw Material and Additives
3.1 If at any time Xxxxxxx wishes to purchase and supply Supplier with
any EG and/or Additives to be used by Supplier in the manufacture of
Product, then Xxxxxxx shall have the right to notify Supplier in writing
(the "RM Notification") of its election to supply Supplier, for the period
(not less than one year), in the quantities and on the other terms
specified, EG and/or Additives to be used by Supplier in the manufacture
of Product to be delivered pursuant to Article 2 hereof, all without cost
to Supplier. Within sixty (60) days of receipt of the RM Notification,
Supplier shall notify Xxxxxxx of Supplier's election to either (i) accept
such RM Notification, in which event Xxxxxxx shall be obligated to supply
EG and/or Additives to Supplier in the quantities, for the period and on
the other terms specified in such RM Notification or (ii) reject such RM
Notification, in which event Supplier shall charge to Xxxxxxx as cost of
EG and/or Additives the same cost as if Supplier had acquired EG and/or
Additives from Xxxxxxx for the period, in the quantities and on the other
terms set forth in such RM Notification. If Xxxxxxx so supplies EG and/or
Additives to Supplier, then the Raw Material Charge shall not include a
charge for the EG and/or Additives supplied by Xxxxxxx nor for associated
freight costs.
3.2 Xxxxxxx represents and agrees that all EG and Additives supplied by
it to Supplier under this Article 3 will meet the specifications as
contained in Exhibit PS 2 hereto. Supplier will inspect any such EG and/or
Additives upon receipt and will advise Xxxxxxx if the quantity or quality
of the EG and/or Additives supplied does not conform to the RM
Notification.
Article 4. Additional Quantities
4.1 During the Years 1997 and 1998, Supplier shall use its best efforts
to manufacture at its facilities and sell to Xxxxxxx quantities of Product
additional to those set out in Article 2.1 above.
4.2 Supplier shall notify Xxxxxxx at least sixty (60) days prior to the
beginning of each calendar quarter whether or not it will be able to
manufacture and sell to Xxxxxxx any additional quantities during the
calendar quarter. At least thirty (30) days after receipt of Supplier's
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notification, Xxxxxxx will notify Supplier if and to what extent it will
purchase such of the additional quantities so offered.
4.3 The price payable by Xxxxxxx for additional quantities of Product is
to be negotiated between the parties from time to time.
4.4 Supplier's obligation under Article 4.1 shall be limited to offering
Xxxxxxx the right to purchase 4,000 additional Tons of Product (in the
Year 1997) and 14,000 Tons of Product (in the Year 1998), but only if and
to the extent that Supplier has first satisfied those of its contractual
obligations existing at the date hereof and demand for products from
within the Akzo Nobel group of companies. If and to the extent that
Xxxxxxx does not purchase any additional Tons of Product so offered,
Supplier shall be free to offer and sell the same to whomever it chooses.
Article 5. Delivery of Product
5.1 Product purchased by Xxxxxxx hereunder will, as Xxxxxxx may elect in
a Delivery Schedule,:
(i) be delivered and loaded by Supplier at the Emmen site onto a
vehicle designated by Xxxxxxx or pneumatically transferred by Supplier to
such a vehicle; or
(ii) packed in big bags and/or octabins and delivered for storage to
a warehouse at the Emmen site designated by Xxxxxxx.
5.2 Supplier shall load or pack Product in accordance with applicable
regulations and as reasonably instructed by Xxxxxxx. The costs of
packaging of Products shall only be for Xxxxxxx'x account if such
packaging was ordered by Xxxxxxx, in which case such costs shall be
invoiced to Xxxxxxx separately, save with respect to certain labor costs
incurred in packaging as provided in Article 2.6. Prior to loading or
packing Product, Supplier will arrange for testing and analysis as
required by Exhibit PS 3.
5.3 Title and risk to a Product shall pass to Xxxxxxx upon delivery
pursuant to Article 5.1.
5.4 In the event that Xxxxxxx indicates in a Delivery Schedule that it
will fail to take delivery of at least 95% of the Monthly Quantity, then,
save for in the circumstances provided for in Article 14, Xxxxxxx shall
pay Supplier the Fixed Charge in respect of those quantities of Product
not taken for delivery which are less than 95% of the Monthly Quantity
plus any actual costs incurred by Supplier if in excess of such amount.
5.5 In the event that Xxxxxxx fails to take delivery of at least 95% of
the Monthly Quantity and Xxxxxxx did not indicate in the relevant Delivery
Schedule that it would so fail, then, save for in the circumstances
provided for in Article 14, Xxxxxxx shall pay Supplier the Fixed Charge
and the Raw Material Charge in respect of those quantities of Product not
taken for delivery which are less than 95% of the Monthly Quantity plus
any actual costs incurred by Supplier if in excess of such amount.
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5.6 For the avoidance of doubt, Xxxxxxx shall have no liability in
respect of its obligations under Article 2.1 provided that in each Year
specified in such Article Xxxxxxx orders and is willing to take delivery
of at least 95% of the quantity of Product specified in such Article for
such Year.
Article 6. Weights and Claims
6.1 Claims on account of quantity, quality, loss or destruction of
Product shall be made in writing within 30 days after delivery or, in the
case of a hidden defect, within 30 days after discovery of the defect but
no later than 6 months after delivery. All such claims shall be reasonably
supported by relevant findings. Variations in quantity of Product
delivered in vehicles or bags of 1% or less from the quantity specified by
Supplier, will not give Xxxxxxx the right to reject the delivery or to
claim damages. Supplier agrees to send Xxxxxxx a well-reasoned written
response to any claim hereunder within 30 days after receipt of such
claim.
6.2 In the event that any Product delivered hereunder does not conform to
the specifications and process control limits for such Product listed in
the attached Exhibit PS 1 (and such exhibit as it may be amended in
accordance with this Agreement), Supplier shall:
(a) at Xxxxxxx'x option, either (i) replace the Product, if
replacement is requested or claimed by Xxxxxxx'x customer for such
Product, and pay any freight charges incurred in relation to the defective
Product (if returned, in which case Xxxxxxx shall return it to Supplier)
and the replacement Product, or (ii) refund to Xxxxxxx such part of the
price of such Product already paid by Xxxxxxx plus the cost of any freight
charges incurred by Xxxxxxx in relation to the defective Product; and
(b) pay to Xxxxxxx 50% of the compensation, excluding compensation
for management time or loss of profits, paid by Xxxxxxx to Xxxxxxx'x
customer in relation to the defective Product, which amount in aggregate
in relation to all defective Products over the five year term of this
Agreement shall not exceed NLG 2,000,000.
(c) The parties agree that if any of Xxxxxxx'x customers makes any
claim for defective Product delivered by Supplier to Xxxxxxx between 1
January 1996 and 31 March 1996, then Supplier shall be liable pursuant to
Article 6.2 towards Xxxxxxx in respect of all such claims as if such
finalised Exhibit PS 1 had been so finalised on the date hereof.
Article 7. Warranties; Product Identity
7.1 Supplier warrants that any Product delivered by Supplier (a) shall
conform to the applicable specifications and process control limits
contained in the attached Exhibit PS 1 (and such exhibit as it may be
amended in accordance with this Agreement), and (b) has been handled and
put-up in accordance with good industry practice.
13
7.2 Supplier will not make any change to its standard operating
conditions as attached hereto in Exhibit PS 4 except with Xxxxxxx'x prior
written approval and will promptly advise Xxxxxxx of any accident or other
event which may result in the standard operation conditions not being
maintained.
7.3 Xxxxxxx shall be entitled to use Xxxxxxx'x trademark or tradename in
connection with the Product and to require Supplier to xxxx any packaging
of Products with such trademark or tradename. If the costs incurred by
Supplier in so marking such packaging exceed NLG 1,000 in any one month
Xxxxxxx shall reimburse the difference to Supplier.
7.4 Supplier represents and warrants that the Products do not infringe
the rights including valid patent and other intellectual property rights
of Supplier or any third party.
7.5 Supplier shall indemnify and hold harmless Xxxxxxx from and against
any and all damages, losses, liabilities, costs and expenses including but
not limited to legal fees whether or not awarded by a court as judicial
costs (gerechtelijke kosten) resulting directly or indirectly from any
claim by a third party that the Products infringe the rights of such third
party. Xxxxxxx shall promptly notify Supplier of any such claim being made
against Xxxxxxx and Supplier agrees at Supplier's expense to defend or
settle any such claim.
Article 8. Reports and Audits
8.1 Xxxxxxx shall have the right, on not less than 30 days written notice
to Supplier, to have an external or internal auditor examine Supplier's
pertinent records for the preceding Year for the purpose of examining the
accuracy of the records, the accounting methodology (including consistency
of application) and the calculations used by Supplier in determining the
amount of any charges previously invoiced to Xxxxxxx. The examination
shall be conducted during normal business hours at times convenient to
Supplier. The results of any such examination shall be notified to
Supplier. If on the basis of such examination Xxxxxxx determines that an
adjustment is required and Supplier agrees the amount thereof, payment of
such amount shall be made within 15 days after notice of such
determination is given together with interest at a rate per annum equal to
the interest rate applied by the Netherlands Central Bank from time to
time for advances to commercial banks ("voorschotrente") as published in
Het Financieele Dagblad plus 1.5 percent calculated in respect of each
adjustment from the date on which the invoice subject to adjustment was
due until the date on which the adjustment is paid.
If Supplier does not accept the adjustment determined by Xxxxxxx, the
adjustment shall be determined by an independent accounting firm appointed
jointly by the parties or, failing agreement between the parties,
appointed by the Chairman for the time being of the Netherlands Institute
of Registered Accountants (NIVRA).
14
8.2 Supplier shall during normal working hours and following reasonable
advance notice permit personnel of Xxxxxxx and of Xxxxxxx'x customers to
enter Supplier's facilities accompanied by a representative of Supplier.
Article 9. Price Reduction
9.1 If, for any reason other than by reason of an impediment as referred
to in Article 14.1, Supplier fails to deliver to Xxxxxxx in any calendar
month during the term of this Agreement at least 95% of the Monthly
Quantity, then without prejudice to Xxxxxxx'x other rights the total price
of the Products delivered to Xxxxxxx during such month shall be reduced by
an amount equal to the product of (i) the number of kilograms of Product
set forth in the applicable Delivery Schedule for the month minus the
number of kilograms of Product delivered in conformity with such Delivery
Schedule during such month and (ii) NLG 1.
9.2 Any reduction due pursuant to this Article shall be credited against
the next following invoice or if not so credited within 30 (thirty) days
shall be paid by Supplier to Xxxxxxx forthwith.
9.3 If Supplier fails to deliver to Xxxxxxx any quantity of Product
required by Xxxxxxx set forth in the applicable Delivery Schedule,
Xxxxxxx'x obligation to take delivery of the quantity not delivered shall
terminate unless Supplier and Xxxxxxx shall have agreed that the quantity
or part thereof shall be delivered at a later date.
Article 10. Term and Termination
10.1 The term of this Agreement shall commence on 1 January 1996 and,
unless sooner terminated as herein provided, shall continue until 31
December 2000.
10.2 This Agreement may be terminated in the event that either party
materially breaches the terms of this Agreement. In such event, the non-
efaulting party may without prejudice to its other rights give to the
defaulting party not less than thirty (30) days written notice of its
intention to terminate the Agreement by a termination date specified in
the notice and describing the breach, and if the breach is capable of
remedy, requiring the other party to remedy its breach before the
specified termination date. On the specified termination date, this
Agreement shall terminate without a further notice or default notice
(ingebrekestelling) being required, unless the defaulting party shall
before such date have remedied all of the breaches described in the
notice.
10.3 Without prejudice to the right of Xxxxxxx to terminate this
Agreement pursuant to Article 10.2, if, for any reason other than by
reason of an impediment as referred to in Article 14.1, Supplier fails to
deliver to Xxxxxxx for a period of three consecutive calendar months at
least 95% of the Monthly Quantity, Supplier shall be in default without
any default notice (ingebrekestelling) being required and Xxxxxxx shall be
15
entitled without prejudice to its other rights to terminate this Agreement
with immediate effect. In the event this Agreement is terminated pursuant
to this Article 10.3, Supplier shall pay Xxxxxxx, in full and final
settlement, within 15 days of the date of termination, the product of (i)
the number of kilograms of Product which Supplier failed to deliver during
he three month period preceding the termination date plus the number of
kilograms of Product which Supplier would otherwise have been obliged to
deliver under Article 2.1 from the date of termination through 31 December
2000 and (ii) 1 NLG. Upon termination, price reductions imposed on
Supplier for failure to deliver the Product during such periods under
Article 9.1 shall not apply.
10.4 Without prejudice to the right of Supplier to terminate this
Agreement pursuant to Article 10.2, if, for any reason other than by
reason of an impediment as referred to in Article 14.1, Xxxxxxx fails for
a period of three consecutive calendar months to take delivery from
Supplier of at least 95% of the quantities of Product requested by Xxxxxxx
for such three-month period pursuant to Article 2.4, Xxxxxxx shall be in
default without any default notice being required and Supplier shall be
entitled without prejudice to its other rights to terminate this Agreement
with immediate effect. In the event this Agreement is terminated pursuant
to this Article 10.4, then Xxxxxxx shall pay Supplier, in full and final
settlement, within 15 days of the date of termination, the product of (i)
the number of Tons of Product which Xxxxxxx failed to take delivery of
from Supplier during the three month period preceding the termination date
plus the number of Tons of Product which Xxxxxxx would otherwise have been
obliged to take delivery of under Article 2.1 from the date of termination
through 31 December 2000 and (ii) NLG 600. Upon termination, penalties
imposed on Xxxxxxx for failure to take delivery of Product during such
periods under Articles 5.4 and 5.5 shall not apply.
10.5 Each party may without prejudice to its other rights terminate this
Agreement with immediate effect in the event the other party is declared
bankrupt or applies for suspension of payment (surseance van betaling).
Article 11. Extension
During the year 2000 and beyond, Supplier will use its best efforts to
make available 5,000 Tons per Year of C-PET and A-PET Specialty Grade
Product to Xxxxxxx on terms to be agreed.
Article 12. Taxes
Xxxxxxx shall assume liability for and pay, and shall indemnify and hold
harmless Supplier from, all value added taxes or other turnover taxes and
customs and excise duties imposed by any governmental authority in respect
of the sale of Product hereunder. Xxxxxxx shall be entitled to the benefit
of any tax credits or refunds attributable to all taxes and duties for
which Xxxxxxx has assumed liability hereunder.
16
Article 13. Confidential Information
Each party agrees to treat as confidential information all specifications,
formulae, quality control standards, process conditions, and other types
of proprietary information or data provided by or received or learnt from
the other party in connection with the Product or developed therefrom.
This obligation of confidentiality shall not apply to any such information
or data which is or becomes during the term of this Agreement through no
fault of either party generally available to the public, which is revealed
to the receiving party by a third party not under an obligation of secrecy
to the disclosing party in respect of such information or data, or which
the receiving party can show, by its written records, it possessed prior
to receipt from the disclosing party. All such confidential information is
considered to be the disclosing party's proprietary information, and as
such, is to be used by the receiving party solely and exclusively in
connection with the performance of this Agreement. Such confidential
information is not to be disclosed to any person or persons other than
employees of the receiving party who have need for access thereto in
connection with this Agreement or the transactions herein contemplated,
and is to be returned to the disclosing party upon request or when the
receiving party's need therefore in connection with this Agreement
terminates. Each party's obligations under this Agreement to maintain the
confidentiality of and not to disclose or utilize the other party's
confidential information shall continue for a period of ten years after
the date of termination of this Agreement.
Article 14. Force Majeur (Overmacht)
14.1 A non-performing party is not liable for a failure to perform any of
its obligations hereunder if the failure was caused by an impediment
beyond its control which was not attributable to it, and which the non-
erforming party could not reasonably be expected to have taken into
account at the time of concluding this Agreement or to have avoided or
overcome and the consequences of which the non-performing party could not
have avoided or overcome by alternative measures at reasonable cost.
14.2 The relief provided by this Article shall only have effect for the
period during which the impediment exists.
14.3 The party which fails to perform, as soon as it becomes aware of the
impediment in question, must give immediate notice thereof to the other
party, detailing the impediment and its effects on its ability to perform.
14.4 Supplier shall not be authorised to suspend deliveries of Product
hereunder in connection with normal maintenance, repair or replacement of
its facilities and normal maintenance, repair or replacement of Supplier's
facilities shall not constitute an impediment as referred to in Article
14.1 unless explicitly agreed upon and taken into account in the
applicable Delivery Schedule.
17
14.5 A shortage of Raw Material shall only constitute an impediment as
referred to in Article 14.1 if Supplier has allocated for the manufacture
of Product hereunder an amount of Raw Material in at least the same
proportion as the total quantity of Product required to be delivered
hereunder bears to the total of products manufactured from Raw Material by
Supplier for all of its European fiber operations, and only to the extent
that such amount is insufficient to deliver the quantities of Product
required by Xxxxxxx and provided the other requirements set out in Article
14.1 are met.
14.6 If because of an impediment as referred to in Article 14.1,
Supplier's ability to manufacture polyester resin on its batch polymer
units shall be limited to less than current capacity, Supplier will
apportion its available production capacity, taking into account technical
limitations, on a pro rata basis amongst its customers, including Xxxxxxx,
taking into account the quantities purchased annually by each customer.
14.7 If because of an impediment as referred to in Article 14.1 at its
Emmen site, Supplier is unable to deliver any quantities of post-
condensated Product, Supplier shall deliver to Xxxxxxx, upon Xxxxxxx'x
request, the same quantities of amorphous Product DDP to Xxxxxxx'x plant
in Emmen from Supplier's Oberbruch or Emmen site at the price set out
herein less an amount to reflect the cost of post-condensation at the
Emmen site, which shall be such proportion of the Fixed Charge as equals
the proportion which the cost of post-condensation at the Emmen site bears
to the combined cost of polymerization at the Oberbruch and Emmen sites
and of post-condensation at the Emmen site.
14.8 Supplier's obligation to sell and Xxxxxxx'x obligation to purchase
the quantities of Product as set out in Article 2.1 shall be reduced by
any quantity which Xxxxxxx is prevented from using or of which any of
Xxxxxxx'x customers is unable to take delivery by reason of an impediment
as referred to in Article 14.1.
14.9 If for a period of three consecutive calendar months, Xxxxxxx fails
to take delivery from Supplier of, or Supplier fails to deliver to
Xxxxxxx, at least 95% of the quantities of Product as set forth in the
applicable Delivery Schedules, and such failure is caused by an impediment
as referred to in Article 14.1, then either party may by written notice to
the other terminate this Agreement with immediate effect.
14.10 In the event of a reduction in market demand for packaging resin
products of at least 20% over at least a 3 month period compared to the
average market demand therefor in the preceding 12 months, Xxxxxxx may by
written notice to Supplier elect that Xxxxxxx'x obligation to purchase
the quantities of Product set out in Article 2.1 be reduced by the same
percentage, provided that with such notice Xxxxxxx furnishes Supplier with
convincing evidence of such reduction in market demand.
14.11 For greater certainty, the parties confirm that if as a result of
an impediment under this Article 14 either Supplier is relieved from its
obligation to deliver and does not deliver, or Xxxxxxx is relieved from
18
its obligation to take delivery of and does not take delivery of, any
Product, Xxxxxxx shall have no obligation to pay Supplier either the Fixed
Charge, the Raw Materials Charge or any other amount in respect of such
Product.
Article 15. General
15.1 This Agreement shall be binding on and inure to the benefit of the
parties and their respective successors and assigns, provided that none of
the parties hereto may transfer any of its rights or obligations pursuant
hereto, without the prior written consent of the other party.
15.2 The applicability of any other conditions, including any sales
conditions of Supplier and any purchase conditions of Xxxxxxx, is hereby
expressly excluded.
15.3 This Agreement shall be governed by and construed in accordance with
the laws of The Netherlands. Save as expressly provided otherwise in this
Agreement, any conflict arising out of or in connection with this
Agreement shall be submitted to the District Court
(Arrondissementsrechtbank) of Amsterdam, subject to appeal and appeal in
the second instance (cassatie).
15.4 This Agreement is not intended to create, nor shall it be construed
to create, any partnership, joint venture, association or any other
relationship by which a party is liable for the obligations, acts or
omissions of the other party.
15.5 This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
15.6 Any notice, demand or other communication required to be given or
made under this Agreement shall be in writing and be deemed duly given or
made if delivered or sent by prepaid registered mail with return receipt
requested or by telefax to the following addresses, and, except in the
case of routine communications such as Delivery Schedules, copied to the
following additional addresses:
If to Supplier: Akzo Nobel Fibers B.V.
Xxxxxx Xxxxxxxxxxx 00
P.O. Box 2008
7801 CA Emmen
Attention: Xx X. Xxxxxxxx
Faxnumber: 00-31-591-62939
with a copy to: Akzo Nobel Fibers X.X.
Xxxxxxxxx 00
X.X. Xxx 0000
0000 XX Arnhem
Attention: Legal Department
faxnumber: 00-31-26-3663240
19
If to Xxxxxxx: Xxxxxxx B.V.
Xxxxxx Xxxxxxxxxxx 00
P.O. Box 2008
7801 CA Emmen
Attention: Plant Manager
faxnumber: 00-31-591-692960
with a copy to: Xxxxxxx, Inc.
0000 Xxxxx Xxxxxx Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Xxxxxx Xxxxxx of America
Attention: Chief Financial Officer
faxnumber: 00-1-908-935 7338
and Vice President of the
Packaging Products Group
faxnumber: 00-1-908-542 9344
with a further copy to: Xxxxxxxx Chance
Attention: Mr X.X.X.X. Xxxxxx
X.X. Xxx 0000
0000 XX Xxxxxxxxx
faxnumber: 00-31-20-6769 326
A party may change its address for the purpose of this Agreement by giving
notice of such change to the other pursuant to the provisions of this
paragraph. Any notice, demand or other communication sent by mail shall be
deemed to have been received by the party to whom it was sent at the end
of the day shown as the day of receipt on the return receipt sent with the
same. Any notice, demand or other communication sent by hand delivery
shall be deemed, in the absence of proof of the contrary, to have been
received when delivered. Any notice, demand or other communication sent by
telefax shall be deemed, in the absence of proof of the contrary, to have
been received by the party to whom it was sent on the date of despatch.
15.7 Each party will promptly and duly execute and deliver to the other
party such documents and assurances and take such further action as such
other party may from time to time reasonably request in order to carry out
more effectively the intent and purpose of this Agreement.
15.8 This Agreement may not be amended, nor may the provisions of this
Agreement be waived, except by written instruments signed by the party to
be bound thereby.
15.9 It is expressly understood and agreed that if a court of competent
jurisdiction holds any provision of this Agreement to be invalid, illegal
or unenforceable, the remainder of this Agreement shall continue to be
fully effective, operative and enforceable, save to the extent that such
remainder would clearly no longer meet the intentions, on the date hereof,
of the parties.
20
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first above written.
XXXXXXX B.V.
/s/ Xxxxx X. Xxxxxxxx
----------------------------
By: Xxxxx X. Xxxxxxxx
Title: Authorized Representative
AKZO NOBEL FIBERS B.V.
/s/ X. Xxxxx /s/ M. A. Menalda
----------------------------- -----------------------------
By: X. Xxxxx By: M. A. Menalda
Title: Authorized Representative Title: Authorized Representative
22
23 August 1996
Akzo Nobel Fibers B.V.
Attn. Mr M.A. Menalda
X.X. Xxx 0000
0000 XX XXXXXX
Dear Mr Menalda,
Agreement for the Sale and Purchase of a Business between Akzo Nobel Fibers
B.V. ("Akzo Nobel") and Xxxxxxx B.V. ("Xxxxxxx") dated 22 December 1995 (the
"S&P Agreement")
PET Resin Supply Agreement between Akzo Nobel and Xxxxxxx dated 28 December
1995 (the "PET Agreement")
Based on extensive discussions the parties hereby agree as follows:
1. In Article 2.1 of the PET Agreement the figure for the Year 1996 of
37,000 Tons, as revised to 36,600 Tons in the letter of 9 July, 1996
shall be further revised to 34,600 Tons.
2. (a) During 1997 Xxxxxxx shall continue to be entitled under Paragraph 7
of the letter agreement between Xxxxxxx and Xxxx Xxxxx X.X. dated
1996-07-09 to require Akzo Nobel to supply Xxxxxxx with 400 additional
Tons of Product without any Fixed Charge being payable.
(b) During the Years 1997 and 1998 Akzo Nobel may request Xxxxxxx, upon
90 days written notice, to accept delivery of Product additional to that
specified in Article 2.1. of the PET Agreement, provided that the total
amount of additional Product under this paragraph and paragraph (c) below
does not exceed 2,000 Tons during such two Year period. Xxxxxxx shall
not be obligated to accept any such additional Product, but shall respond
within 30 days.
(c) If Xxxxxxx requests all of the additional Product available under
(a) above and Akzo Nobel delivers it to Xxxxxxx, during the Years 1997
and 1998 Xxxxxxx may request Akzo Nobel, upon 90 days, written notice, to
deliver further Product additional to that specified in Article 2.1. of
the PET Agreement, provided that the total amount of additional Product
under this paragraph and paragraph (b) above does not exceed 2,000 Tons
during such two Year period. Akzo Nobel shall not be obligated to
deliver any such additional Product, but shall respond within 30 days.
(d) If Xxxxxxx does accept or request additional Product under (b)
and/or (c) above, and Akzo Nobel delivers it to Xxxxxxx, Xxxxxxx shall be
23
required to pay the Fixed Charge in respect thereof. These additional
volumes in 1997 and 1998 are valid for X00 000 (Q) for which in 1995 a
Fixed Charge of six hundred Netherlands Guilders (NLG 600) per ton
applied. In respect of Product to which a different Fixed Charge
applies, the volume of Product or the fee will be adjusted accordingly.
Xxxxxxx shall advise Akzo Nobel in the applicable Delivery Schedule as
outlined in Article 2.4 of the PET Agreement as to what Product it wishes
to accept delivery of in order to satisfy its requirements with regards
to these additional volumes.
(e) If Xxxxxxx accepts or requests the 2,000 Tons of additional Product
available under (b) and/or (c) above, Akzo Nobel's obligations under
Article 4 of the PET Agreement shall continue to apply.
3. Article 14.10 of the PET Agreement shall be amended to read as
follows:
(a) In the event of a reduction in European market demand for packaging
resin products of at least 20% (the percentage reduction being the
"Reduced Demand Percentage") over at least a 3 month period (calculated
by averaging the months) starting no earlier than 1 November 1996 (the
actual period being the "Reduced Demand Period") compared to the average
market demand therefor in the preceding 12 month period (starting no
earlier than 1 November 1995), Xxxxxxx may by written notice to Supplier
elect that Xxxxxxx'x obligation to purchase quantities of Product set out
in Article 2.1 for certain months following notification be reduced by
(b) below, provided that with such notice Xxxxxxx furnishes Supplier with
convincing evidence of such reduction in market demand. The parties
agree that in any event furnishing data published by A.C. Fiduciare (more
commonly known as "FIDES") for "sales to customers" of rigid containers
shall constitute "convincing evidence" of "European market demand for
packaging resin products".
The Reduced Demand Period can only include a period in 1996 if the period
in 1996 equals at least 90% of the volume for the corresponding period
in 1995.
(b) if Xxxxxxx makes the election in (a) above, Xxxxxxx'x obligation to
purchase the quantities of Product set out in Article 2.1 shall be
reduced by the Reduced Demand Percentage for a "Reduced Take Period"
equal to the number of months in the Reduced Demand Period which fall
during 1997 & 1998.
(c) Each Reduced Take Period shall be taken as soon as reasonably
practicable after Xxxxxxx has made its election under (a) above giving
consideration to Akzo's production scheduling.
(d) If Xxxxxxx makes an election under (a) above, any month included in
the relevant Reduced Demand Period may not form part of any subsequent
Reduced Demand Period pursuant to a subsequent election by Xxxxxxx under
(a) above.
2
4. The parties agree that Article 5.4 of the PET Agreement shall not apply
to 1996 provided that for 1996 Xxxxxxx complies with Article 5.6 thereof.
5. The parties agree that the Working Capital as defined in the S&P
Agreement shall be NLG 67,070,288. Pursuant to Article 5.4(b) of the S&P
Agreement the Basic Purchase Price shall therefore be increased by NLG
47,070,288.
Concurrent with signature of this letter, Akzo Nobel shall sign and deliver
to Xxxxxxx and Xxxxx Xxxxx & Xxxxx a Letter of Representation in the agreed
form.
For the avoidance of further doubt, Articles 5.5 and 5.6 of the S&P Agreement
(regarding Trade Receivables) shall remain in effect.
6. This letter shall not affect any of Xxxxxxx'x or Akzo Nobel's rights
under any representation or warranty made by either Xxxxxxx or Akzo Nobel in
the S&P Agreement.
7. In all other respects, the S&P Agreement and the PET Agreement will
remain unchanged. In the event of any conflict between the provisions of
this letter and any provision of the S&P Agreement or the PET Agreement or
any agreement made in furtherance thereof, the provisions of this letter
shall prevail. For the avoidance of doubt, it is hereby confirmed that
Xxxxxxx'x and Akzo Nobel's right pursuant to the above paragraphs will not be
affected by any subsequent variation or application of the PET Agreement or
the S&P Agreement.
Unless otherwise specified, capitalized terms used above shall have the
meanings assigned to them in the S&P Agreement or the PET Agreement, as
appropriate.
If you agree with the above, please have the enclosed copy of this letter
duly signed on behalf of Akzo Nobel.
Yours faithfully,
Xxxxxxx B.V.
/s/ Xxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Authorized Representative
For agreement by Akzo Nobel Fibers B.V.:
/s/ Lourens /s/ Menalda
------------------------------- -------------------------------
Name: Lourens Name: Menalda
Title: Authorized Representative Title: Authorized Representative
3
