Monterey, California 8 April 2008 SELLER’S SALES CONTRACT No. 161.07.xxxx-S BUYER’S PURCHASE CONTRACT No. XXXXXXXXX
EXHIBIT 10.5
Century
Aluminum Company
0000
Xxxxxx Xxxx
Xxxxxxxx
X
Xxxxx
000
Xxxxxxxx,
XX 00000
United States of America
Monterey,
California 8 April 2008
SELLER’S
SALES CONTRACT No. 161.07.xxxx-S
BUYER’S
PURCHASE CONTRACT No. XXXXXXXXX
This
Agreement is made as of 8 April 2008 (the “Effective Date”) between
Century Aluminum Company, 0000 Xxxxxx Xxxx, Xxxxxxxx X, Xxxxx 000, Xxxxxxxx, XX
00000, XXX (the “Buyer”) and XXXXXXXX XX, Xxxxxxxxxxxxxxxxx
0, XX-0000, Xxxx, Xxxxxxxxxxx (the “Seller”).
1.
|
SCOPE
OF THE AGREEMENT
|
Seller
agrees to sell Alumina and Buyer agrees to buy Alumina on the terms and conditions set out
below.
2.
|
DEFINITIONS
|
1
ton 1
metric ton or 1000 kilograms or 2204.62
lbs.
US$ and
cents Means
the lawful currency of the United States of America.
|
INCOTERMS
2000
|
Means
the publication entitled “ICC Official Rules for the Interpretation of
Trade Terms – Incoterms 2000”, published by the International Chamber of
Commerce (2000 edition).
|
|
Alumina
|
Means
xxxxx calcined metallurgical grade alumina from any one of the following
source refineries at Seller’s option
and any other mutually agreed source
origins:
|
Alpart,
Jamaica (*)
|
Corpus
Christi, Texas (*)
|
Suralco,
Surinam
|
Jamalco,
Jamaica (*)
|
Bauxilum,
Venezuela
|
AoA,
Australia
|
Windalco,
Jamaica (*)
|
Alunorte,
Brazil
|
Worsley,
Australia
|
(*) The
above designated Alumina shall not be permitted for delivery to Buyer's smelter
at Mt. Xxxxx, South Carolina. Buyer shall declare by latest 31
October of the year prior delivery what quantity of Alumina it intends to ship
to the Mt. Xxxxx xxxxxxx. Buyer shall use its reasonable efforts to obtain
acceptance of Alpart, Jamalco and Windalco as an unconditional source of Alumina
prior to the commencement of the Contract and/or during the Term of the
Contract.
Banking
Day
|
Means
any day except a Saturday or Sunday on which banks in the City of New
York, New York, United States of America are generally open for the
conduct of business.
|
- 1
-
Business
Day
|
Means
any day except a Saturday or Sunday on which banks in the City of New
York, New York, United States of America are generally open for the
conduct of business.
|
Calendar
Month Refers
to a named month in the Gregorian calendar.
|
Contract
Period
|
Means
(i) each Contract Year (except the last Contract Year) and (ii) the period
commencing on the first day of the last Contract Year and ending on the
last day of the Calendar Month in which this Agreement
terminates.
|
Contract
Year
|
Means
2010 and each Year thereafter that falls (in whole or in part) within the
Term of this Agreement.
|
|
LME
|
Means
the average daily 3 month and cash
settlement price for high grade aluminium, as published in Xxxxx’x
Metals Week averaged over the Quotational
Period.
|
Loss
|
Means, with respect to this Agreement an amount
that a party reasonably determines in
good faith to be its total losses and costs (or gain, in which case
expressed as a negative number) in connection with this Agreement as the
case may be, including any loss of bargain, cost of funding or, at the
election of such party but without
duplication, loss or cost incurred as a result of its terminating,
liquidating, obtaining or re-establishing any hedge or related trading
position (or any gain resulting from any of them). Loss includes losses
and costs (or gains) in respect of any payment
or delivery required to have been made (assuming satisfaction of any
applicable condition precedent) on or before the date of determination of
such loss and not made. Loss does not include a party’s legal
fees.
|
Month
of Actual Shipment
|
Means
in respect of any shipment of Alumina the calendar month in which shipment
takes place, as evidenced by the Xxxx
of Lading date.
|
|
Month
of Scheduled Shipment
|
Means
the calendar month in which the
relevant shipment has been scheduled, as per clause 6
below, or as otherwise agreed in writing between the
parties.
|
Quantity
|
means
the Quantity of Alumina to be delivered in each Contract Year in
accordance with Clause 5.
|
|
Quotational
Period
|
Means
the month prior to the Month of
Scheduled Shipment.
|
|
Year
|
Means
a year in the Gregorian calendar, which shall commence on 1 January and end on 31
December.
|
3.
|
TERM
|
3.1
|
The
term of this Agreement (the “Term”) shall be from 1 January
2010 until December 31, 2014 unless further extended or earlier
terminated pursuant to the terms of this
Agreement.
|
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-
4.
|
MATERIAL
AND QUALITY
|
4.1
|
Alumina
supplied under this Agreement will comply with the specifications for the
applicable source refinery attached as per Annex 1. If Seller’s
supplier changes the specifications for alumina produced by such supplier,
Seller may propose that Buyer accept Alumina conforming to such revised
specifications under this Agreement and Buyer shall not unreasonably
withhold or delay such consent. Seller hereby warrants that Alumina delivered pursuant to this
Agreement shall conform to the chemical and physical specifications set
out in Annex 1 or such other specifications as are from time to time
agreed between Buyer and Seller in writing (the
“Specifications”).
|
4.2
|
Seller
has the option to provide up to a
maximum of four (4) Alumina sourced origins per Contract Year (defined as
1 January – 31 December) with the origin(s) under each Contract Year to be
declared by the Seller no later than November 30th
of the year prior to the Contract Year in question (“Supply Campaigns”).
Seller acknowledges that the use of multiple origins may have financial
and operational impacts on Buyer. Accordingly, Seller and Buyer agree to
use their reasonable efforts to establish a mutually acceptable shipping
schedule that avoids to a practicable extent financial and operational
impact to either party. Seller shall use its reasonable efforts to provide
Buyer with a continuous origin supply of Alumina for a minimum of 3 months
to be used at each of the Buyer's individual
smelters.
|
4.3
|
If
at any time during the “”Term”” of this Agreement a particular alumina
source nominated and/or used in the alumina to aluminium conversion
process adversely impacts Buyer’s ability to convert alumina into the
aluminium quality required by Buyer and/or creates a legal or a
governmental condition that adversely impacts the operating performance of
a Buyer’s smelter(s) in part or in whole, Buyer and Seller agree to
expeditiously work together to find a mutually acceptable
solution.
|
4.4
|
Seller
has the right to propose alternative Supply Campaigns after November
30th
which will be subject to review and
acceptance by Buyer at its
discretion, not to be unreasonably
with held or delayed.
|
5.
|
QUANTITY
|
5.1
|
The
following quantities of Alumina shall be delivered under each Contract
Year:
|
2010:
|
290'000
MT
|
2011:
|
365'000
MT
|
2012:
|
000'000
XX
|
0000:
|
450'000
MT
|
2014:
|
730'000
MT
|
5.2
|
The
Quantity of Alumina deliverable in any given year shall be subject to a
+/- 5 percent tolerance in Buyer's option to be declared by no later than
30 November of the year prior to the Contract Year in
question.
|
6.
|
SHIPMENT
|
6.1
|
Not
later than 60 days prior to the
beginning of each Contract Year, Buyer shall notify Seller in writing of the amount of Alumina
which Buyer expects to require for delivery in each Month during the
Contract Period, which notice shall include a proposed vessel loading
schedule for such Contract Year (the “Proposed Vessel Loading Schedule”)
as well as the amount of Alumina scheduled to be delivered to each of the
Buyer's individual smelters.
|
- 3
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6.2
|
The
Proposed Vessel Loading Schedule shall
specify:
|
|
(a)
|
the
total number of shipments for the relevant Contract Year, each shipment
numbered from one onwards
consecutively;
|
|
(b)
|
the
Month of Scheduled Shipment required for each individual
smelter;
|
|
(c)
|
the
quantity (lot size) of Alumina to be supplied by Seller and accepted by
Buyer for each such shipment for each individual smelter;
and
|
|
(d)
|
the
preliminary laydays for each shipment
for each individual smelter.
|
6.3
|
Each
Proposed Vessel Loading Schedule is subject to Seller’s approval, which shall not be unreasonably withheld
or delayed.
|
6.4
|
Buyer
and Seller are to mutually agree on a Vessel
Loading Schedule by no later than 15th December of the year prior to the Contract Period in
question. Once approved, the Vessel Loading Schedule shall be final and
binding on both parties (the “Final Vessel Loading
Schedule”). The Final Vessel Loading Schedule shall not be
amended unless agreed in writing by both the
Seller and Buyer.
|
6.5
|
The
shipments, shall be in lot sizes of between 25,000 – 35,000 MT and are to
be approximately evenly distributed over each Contract
Year. Final lot sizes shall be adjusted to reflect the physical
limitations of the loading port for the origin and or origins declared for
the Contract Year in question. In the event of delivery from Corpus the
lot sizes are to be between a minimum of 13,000 and a maximum
of 30,000MT to be mutually agreed by 15th December of the year prior to
the Contract Period in question.
|
6.6
|
Each
individual lifting will, for shipping purposes, be subject to a
+/- 5 percent tolerance with the final shipment in any given Contract Year
adjusted to reflect the balance Alumina declared under clause 5
above.
|
7.
|
PACKING
|
7.1
|
In
Bulk
|
8.
|
DELIVERY
|
8.1
|
FOB
Spout Trimmed (“FOB ST”) at the load port of the respective source
refinery. All vessels provided shall be suitable for loading
and/or discharging and in conformity with the restrictions and limitations
at the respective load ports and / or discharge ports at the time of
shipping.
|
9.
|
PRICE
|
|
9.1
|
The
price for the Alumina for each Calendar Year shall be calculated as
follows:
|
|
(a)
|
A
Base Price of * percent of the
LME per MT for 33.33 pct of the Quantity required in any given Contract
Year and
|
|
(b)
|
A
Base Price equal to a percentage of the LME per MT for 66.67 pct of the
Quantity required in any given Contract Year determined by negotiation
between a Put and Call pricing range under which the Seller has the right
to sell at * pct of the LME
per MT and the Buyer has the right to buy at * pct of the LME
per MT. The applicable percentage shall be agreed between the
Buyer and Seller by no later than November 15th of the year preceding the
Contract Year in question.
|
|
*
|
Confidential
information has been omitted from this exhibit pursuant to a request for
confidential treatment filed separately with the Securities and
Exchange Commission.
|
- 4
-
9.2
|
If
no agreement is reached by pursuant to clause 9.1(b)
above and neither party
exercises its right to either put or call
by November 15th of the year preceding the Contract Year in
question, then deliveries for the 66.67 pct of the Quantity required in
any given Contract Year under the Agreement shall be suspended for that
Contract Year in question and the Quantity shall be reduced to 33.33 pct
of the Quantity for that Contract
Year.
|
9.3
|
If
agreement is reached pursuant to
clause 9.1(b) above, then each shipment of
Alumina shall, subject to Clause 9.4, be invoiced on the basis of 33.33
pct of the shipment is priced in accordance with Clause 9.1(a) and the
balance priced in accordance with clause
9.1(b).
|
9.4
|
The
Base Price of the Material in any Contract Year shall be based on the
delivery of 50 pct of the material from Jamaica and 50 pct of the material
from Brazil (Alunorte). To the extent that Material delivered
in any Contract Year is not distributed equally between Jamaica and Brazil
then the excess Material shall be subject to the following per MT
adjustment to the Base Price:
|
Jamaica
|
Brazil
|
|
Corpus
|
*
|
*
|
Venezuela
|
*
|
*
|
Jamaica
|
*
|
*
|
Brazil
|
*
|
*
|
Australia
|
*
|
*
|
Surinam
|
*
|
*
|
|
*
|
Confidential
information has been omitted from this exhibit pursuant to a request for
confidential treatment filed separately with the Securities and
Exchange Commission.
|
9.5
|
In
the event that Seller is unable to supply Buyer with Material from Sherwin
to the extent that it is required by Buyer's smelter at Ravenswood, WV,
then the base price shall be adjusted in Buyer’s favor to reflect the
prevailing freight parity for the delivery year in question between
Sherwin to Darrow , LA and Seller's alternatively declared Source Refinery
to Darrow, LA.
|
10.
|
PAYMENT
|
10.1
|
Net
30 days after Xxxx of Lading date by
telegraphic transfer against presentation of the following standard
shipping documents:
|
|
(a)
|
Seller’s
commercial invoice in triplicate, calculated in accordance with clause
9.
|
|
(b)
|
Full
set (3/3) of clean on board ocean Bills of Lading, made out To Order and
Blank Endorsed, marked “Freight payable as per Charter
Party”.
|
|
(c)
|
Certificate
of Weight in triplicate issued by an independent surveyor.
|
|
(d)
|
Certificate
of Quality/Analysis in triplicate issued by the producer of the Alumina (the “Producer”).
|
|
(e)
|
Certificate
of Origin in triplicate issued by the Producer.
|
11.
|
FREIGHT
|
11.1
|
Buyer
and Seller may agree by no later than November 30th of the Year prior
to the Contract Year in question that Seller shall sell to
Buyer a contract of affreightment (“COA”) covering the delivery of
Alumina. The COA is to be concluded on terms and conditions to
be agreed by Seller and Buyer whereby Seller or its nominee will sell freight to Buyer in
addition to those obligations of Seller under this Agreement.
|
- 5
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11.2
|
If
Buyer and Seller mutually agree on a COA then the cost of the same will be
added as a cost per Metric Ton to the Base Price as determined under
clause 9 above for the Contract Year in
question.
|
12.
|
LOADING
CONDITIONS
|
12.1
|
The
standard Producer terms and conditions at the time of shipment at the port
of loading for the respective source refinery are to apply, including
applicable charter party (“C/P”) demurrage and despatch rate at the time
of the shipment. The current applicable standard Producer terms and
conditions are attached as per Annex 2 Seller shall be responsible for
promptly supplying to Buyer a copy of the load port requirements in the
event that a change is made to those attached
hereunder.
|
13.
|
INSURANCE
|
13.1
|
If
Buyer and Seller agree that Seller shall
sell a COA during the relevant Contract Year, then Seller shall be
responsible for providing insurance from loading through to discharge port
for the full CIF value, calculated in accordance with the terms of this
Agreement against full risks in accordance with current Institute Marine Cargo Clauses (all risks) including
War Risks and SRCC, average irrespective of percentage, with the addition
of the customary 10% (ten percent).
|
13.2
|
In
addition, Seller shall provide Buyer with an Original Insurance
certificate in duplicate for 110% of invoice value covering All Risks, War
Risks and SRCC Clauses.
|
13.3
|
The
cost of the insurance will be added as a cost to the Base Price as
determined under clause 9 above for the Contract Year in
question.
|
14.
|
TITLE
AND RISK
|
14.1
|
Title
and risk will pass from Seller to
Buyer when the Alumina passes over the ship’s rail at the port of
loading.
|
15.
|
DETERMINATION
OF WEIGHT
|
15.1
|
Seller
shall, at its cost, arrange for the determination of the weight of the
shipload at the load port by means of
draft survey from an independent
surveyor before commencement and after completion of loading and shall
obtain a certificate of weight from an independent qualified marine
surveyor. The determined weight shall be reported on the Xxxx
of Lading and for all purposes will be final, binding and conclusive as to
the weight of the shipload. Buyer shall have the right to have
a representative present at such weight determination at Buyer’s
expense.
|
16.
|
SAMPLING
|
16.1
|
Seller
shall, at its cost, arrange for the Producer to take a bulk sample of the
Alumina from the shipload in accordance with the Producer’s standard
procedures and divide it into three (3) equal parts. Each of
those samples shall be placed in a sealed sample container. A
label showing Seller’s name, name of vessel, weight of the shipload and
Xxxx of Lading date shall be affixed to each sample
container. One sample shall be delivered to Buyer (along with a
report of the analysis), and two shall be retained by Seller or Producer, one for its own analysis and one
for a referee analysis, in case such analysis is required by either party.
Buyer shall have the right to have a representative present at such
sampling at Buyer’s expense.
|
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17.
|
ANALYSIS
|
17.1
|
Seller
shall, at its cost, arrange for analysis of its own alumina samples taken
pursuant to Clause 16 above, in
accordance with the Producer’s
customary analysis procedures. Unless a referee analysis is carried out in
accordance with Clause 18 below, Seller's
sample analysis shall be final, binding and conclusive on the
parties hereto.
|
17.2
|
The
Alumina shall be deemed to conform to
the applicable Specifications unless Buyer notifies Seller within 30
(thirty) days of receipt of the Alumina that said Alumina does not conform
to the Specifications and the nature of the
non-conformity. Within 14 (fourteen) days of receipt of any
notice of non-conformity, Seller shall advise Buyer whether or not it
accepts that the relevant Alumina does not conform with the applicable
Specifications.
|
18.
|
REFEREE
ANALYSIS
|
18.1
|
In
case of disagreement between Buyer and Seller about the conformity of any Alumina supplied under this
Agreement, then at the request of either party the sample retained
by Seller/Producer for referee analysis shall be
analysed in accordance with the Producer’s standard analysis procedures by
a laboratory mutually agreed upon by the parties (or, failing agreement,
Societe Generale de Surveillance SA), and the analysis of such laboratory
shall be final, binding and conclusive on the parties. Each party shall be
entitled (at its own cost) to be represented during such referee analysis.
The cost of the said analysis will be borne by the party whose results
differ most from those given by the referee
laboratory.
|
19.
|
FAILURE
TO MEET SPECIFICATIONS
|
19.1
|
If
any Alumina delivered hereunder does not meet the Specifications (“Non-Conforming Alumina”),
Buyer and Seller will endeavour to reach agreement on what actions should
be taken with respect thereto. If and to the extent that Buyer
and Seller reach any agreement with respect to any action to be taken with
respect to any Non-Conforming Alumina, the provisions of this Section
shall be deemed to be modified accordingly (but only to the extent
necessary to reflect such agreement and only in respect of such
Non-Conforming
Alumina).
|
19.2
|
In respect of
any Non-Conforming Alumina delivered hereunder, Buyer shall have the
option to:
|
|
(a)
|
nevertheless
take delivery subject to payment to Buyer by Seller of compensation as
hereinafter provided. The parties shall confer in an endeavour to agree
upon the compensation to be paid to Buyer by Seller to compensate Buyer
for any loss in value of the alumina attributable to the alumina not
meeting the Specifications. If the parties are unable to agree upon an
amount of compensation payable by Seller, the question shall be referred
to arbitration pursuant to Clause 22 and in that arbitration the
arbitrators shall be bound by the provisions of this clause and clauses 28 and 29 below; or
|
|
(b)
|
promptly
reject the Alumina by giving written notice to Seller. If Buyer elects to
reject any Non-Conforming Alumina:
|
|
(i)
|
title
to such Non-Conforming Alumina shall revert to Seller on the date on which
Buyer gives notice thereof; provided that risk of loss of such
Non-Conforming Alumina shall remain with Buyer until Buyer ships disposes
of or otherwise deals with the Non-Conforming Alumina as directed by and at the expense to Seller (acting
reasonably);
|
- 7
-
|
(ii)
|
Seller
shall refund any amount paid by Buyer for such Non-Conforming
Alumina;
|
|
(iii)
|
upon
receipt by Buyer of the amounts required pursuant to clause
(iv) below, Buyer will ship, dispose
of or otherwise deal with the Non-Conforming Alumina in such manner as may
be directed by Seller (acting reasonably);
and
|
|
(iv)
|
Seller shall pay Buyer
for (i) all shipping, insurance and
other out-of-pocket direct costs reasonably incurred or to be incurred and documented by Buyer in carrying out the
directions of Seller; and (ii) the Replacement Losses if any, (as
defined in clause 19.3 below) incurred by Buyer in procuring alumina
from third parties as a substitute
for Non-Conforming Alumina;
or
|
|
(c)
|
Seller
and Buyer may agree for a replacement cargo to be delivered to Buyer on
terms to be agreed.
|
19.3
|
“Replacement
Losses” shall mean the excess, if any, of
the purchase price,
transportation, insurance and freight costs actually incurred by Buyer,
acting reasonably, in procuring alumina from third parties as a substitute
for the Non-Conforming Alumina and
the purchase price,
transportation, insurance and freight costs Buyer would have paid to obtain Alumina in accordance with the terms of
this Agreement. The precise
amount payable in respect of Replacement Losses shall be
determined (i) by Buyer acting
reasonably, with a statement of such Losses and copies of calculations,
invoices and the methodology in respect of Buyer’s determination of such
Losses provided by Buyer in writing to Seller not later than the 30th
day after the date on which such Alumina is finally determined to be
Non-Conforming Alumina in accordance with this Agreement, and (ii)
confirmed in writing by Seller within 10 Business Days of
receipt, failing which either party may refer such determination to
arbitration pursuant to Clause 22.
|
19.4
|
In
respect of any Non-Conforming Alumina delivered hereunder, Buyer shall use its commercially reasonable efforts to utilize
the remedy specified in Clause 19.2 (a) above. Should this remedy not be
possible, despite Buyers best efforts to do so, then Buyer may elect one
of the above remedies specified in Clause 19.2
(b). If Buyer fails to make any election under
Clause 19.2 (a) or (b), the Non-Conforming Alumina shall be deemed for
the purposes of this Agreement to
meet the Specifications.
|
19.5
|
The
remedies conferred on Buyer in respect of any Non-Conforming Alumina
delivered hereunder shall be the sole and exclusive remedies of Buyer
against Seller in respect of such
Non-Conforming Alumina and, except as expressly set out in this Clause 19,
Seller shall not be liable to Buyer or any of its affiliates (whether in
contract, tort or otherwise) for any loss or damage of any nature arising
out of such Non-Conforming
Alumina.
|
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20.
|
FORCE
MAJEURE
|
20.1
|
“Force
Majeure” means any cause or event reasonably beyond the control of a
party, including, but not limited to fires, earthquakes, lightning,
floods, explosions, storms, landslides and other acts of natural calamity
or acts of god; navigational accidents or maritime peril; significant
vessel damage preventing the vessel from fulfilling its intended voyage or
vessel loss; strikes, grievances, actions by or among workers or lock-outs
(whether or not such labour difficulty could be settled by acceding to any
demands of any such labour group of individuals); accidents at, closing
of, or restrictions upon the use of mooring facilities, docks, ports,
harbours, railroads or other navigational or transportation mechanisms;
disruption or breakdown of, storage plants, terminals, machinery or other
related facilities (except to the extent such disruption or breakdown is
caused by the wilful misconduct or gross negligence of Seller); acts of
war, hostilities (whether declared or undeclared), civil commotion,
embargoes, blockades, terrorism, sabotage or acts of the public enemy; any
act or omission of any governmental authority; good faith compliance with
any order, request or directive of any governmental authority;
curtailment, interference, failure or cessation of supplies beyond the
reasonable control of a party; or any other cause beyond the reasonable
control of a party, whether similar or dissimilar to those above and
whether foreseeable or unforeseeable, which, by the exercise of due
diligence, such party could not have been able to avoid or
overcome. For the avoidance of doubt: (a) Force Majeure include
acts undertaken by a party directly in anticipation of, or to minimize
losses that could arise from, an event of Force Majeure; and (b) a party’s
inability economically to perform its obligations under this Agreement or
financial hardship shall not constitute an event of Force
Majeure.
|
20.2
|
Subject
to the terms of this Agreement, neither party shall be liable to the other
if it is rendered unable by an event of Force Majeure to perform in whole
or in part any obligation or condition of this Agreement, except for any
payment or indemnification obligations, for so long as the event of Force
Majeure exists and to the extent that performance is prevented or delayed
by the event of Force Majeure and which that party is not able to prevent
or overcome in accordance with normal industry practice and standards
provided, however, that:
|
|
(a)
|
the party prevented from performing shall use
reasonable efforts to avoid or remove the event of Force
Majeure, including, without
limitation, if Seller declares a
Force Majeure in good faith in
relation to an origin which has been accepted or deemed to have been
accepted under clause 4 above, then the
Seller shall use reasonable best efforts
to source an alternative cargo to that originally affected by the Force
Majeure and the time for performance of this Agreement shall be
extended until the earlier of the duration of the Force Majeure event and
the time reasonably necessary for Seller to source an alternative cargo to
that originally affected by the Force
Majeure;
|
|
(b)
|
the
settlement of strikes or other events of labour unrest shall lie entirely within the discretion of
the party having the difficulty and such party shall not be required to settle such
strikes or labour unrest by acceding to the demands of the opposing party
when such course of action is deemed inadvisable by the party having the difficulty;
and
|
|
(c)
|
if any Force Majeure limits rather than prevents Seller’s production or
delivery of Alumina then Seller shall
be obligated to deliver to Buyer, on a proportional basis, such quantity
from the actually produced or deliverable total quantity, in the
proportion of Seller’s annual commitment to Buyer and Seller’s total
combined annual commitment to all the purchasers under Seller’s sales
agreements with respect to the sale and delivery of Alumina in effect
during the period of such Force Majeure and affected by the Force
Majeure.
|
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20.3
|
During
the period that performance by one of the parties of a part or whole of
its obligations has been suspended by reason of an event of Force Majeure,
the other party likewise may suspend the performance of all or a part of
its obligations to the extent that such suspension is commercially
reasonable, except for any payments then owing and indemnification
obligations.
|
20.4
|
The
party rendered unable to perform shall give prompt (and in any event to
the extent practicable, within 72 hours
after becoming aware of the Force
Majeure event) written notice to the other party of the occurrence
of a Force Majeure event, including, to the extent feasible, the
details, the expected duration and
the volume of products affected. Such party also shall promptly
notify the other when the event of Force
Majeure is terminated.
|
20.5
|
Upon
a Force Majeure affecting Seller, Buyer may elect to
either:
|
|
(a)
|
in
circumstances where the inability of Seller to deliver Alumina to Buyer
would in the reasonable opinion of Buyer lead to a situation whereby the
stocks of alumina at Buyer’s (or
Buyer’s affiliate’s)
smelter would reach critically low levels, Buyer may, upon written
notice to Seller purchase from other suppliers any or all of the
quantities of alumina which Seller is
or expects to be unable to deliver and
(i) Seller shall not be liable to Buyer for any cost,
expense or loss whatsoever of Buyer arising out of any purchase Buyer may
make from other suppliers; (ii) Buyer
shall give Seller written notice of any such purchase (the “Covered
Alumina”), the amount of which shall be deducted
from the quantity to be purchased
during the Contract Period in which Buyer makes such purchase and (iii) Seller’s obligation
to source an alternative supply under clause 20.2(a) shall cease with
respect to the Covered Alumina;
or
|
|
(b)
|
extend
the term of this Agreement to the extent that Seller has invoked this
provision (in which case the price
for Alumina in effect for the extended term shall be the same as the price
in effect for Alumina scheduled to be delivered but not delivered during
the Force Majeure).
|
20.6
|
Upon
a Force Majeure affecting Buyer, Seller may elect to
either:
|
|
(a)
|
sell
to other buyers the Alumina which Buyer is or expects to be unable to
accept, and Buyer shall not be liable to Seller for any cost, expense or
loss arising out of any such sales; Seller shall give Buyer written notice
of any such sale, the amount of which shall be deducted from the quantity
purchased during the Contract Period
in which Seller makes such sale; or
|
|
(b)
|
extend
the term of this Agreement to the extent that Buyer has invoked this
provision (in which case the price
for Alumina in effect for the extended term shall be the same as the price
in effect for Alumina scheduled to be delivered but not delivered during
the Force Majeure).
|
20.7
|
Notwithstanding
the foregoing provisions, upon a Force Majeure which continues for a
period of six consecutive months or more, then:
|
|
(a)
|
for a Force Majeure affecting Buyer, Seller may,
elect at any time thereafter to suspend this
Agreement to the extent of the deliveries of Alumina affected by the Force
Majeure for that Contract
Year, with immediate effect, provided
that the Force Majeure is continuing
as of the date of such notice, by sending a written notice to Buyer as
provided in this Agreement announcing exercise of such right of
suspension to the extent of the deliveries of Alumina
affected by the Force Majeure for
that Contract Year;
|
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(b)
|
for a Force Majeure affecting Seller, Buyer may
elect at any time thereafter to suspend
this Agreement to the extent of the
deliveries of Alumina affected by the Force Majeure for
that Contract Year, with immediate
effect, provided that the Force
Majeure is continuing as of the date of such notice, by sending a written
notice to Seller as provided in this Agreement announcing exercise of such
right of suspension to the extent of the deliveries of Alumina
affected by the Force Majeure for
that Contract
Year.
|
Alternatively,
the party not affected by the Force Majeure may continue to exercise its rights
as set forth above in clauses 20.5 or 20.6 (as the case may be and as
applicable), and not exercise the right of suspension provided in this
clause.
21.
|
GOVERNING
LAW / JURISDICTION
|
21.1
|
This
agreement shall be subject to and construed under the laws of the State of
New York, excluding the rules of conflicts or choice of law and excluding
the United Nations Convention on Contracts for the International Sale of
Goods.
|
22.
|
ARBITRATION
/ DISPUTE RESOLUTION
|
22.1
|
Any
controversy, dispute, or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration
administered by the American Arbitration Association under its Commercial
Arbitration Rules, and judgement on the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof. There
shall be three arbitrators, and the arbitration shall be conducted in the
English language in New York, New York,
U.S.A.
|
23.
|
TAXES
AND TARIFFS
|
23.1
|
Any
taxes, tariffs and duties whether existing or new on the Alumina or on
commercial documents relating thereto or on the cargo itself, imposed in
the country of origin shall be borne by
Seller.
|
23.2
|
Any
taxes, tariffs and duties whether existing or new on the Alumina or on
commercial documents relating thereto or on the cargo itself, imposed in
the country of discharge and/or the importing country shall be borne by
Buyer.
|
24.
|
LICENSES
|
24.1
|
Buyer
undertakes that all the necessary import licences and all other
authorisations required for the alumina have been obtained (and/or will be
obtained) for the entire quantity covered by this Agreement. Buyer
furthermore guarantees that such licences will remain in force for the
Term.
|
25.
|
ASSIGNMENT
/ THIRD
PARTY RIGHTS
|
25.1
|
Without the prior written consent of the other
party, which consent shall not be unreasonably withheld, or
delayed, neither party may assign its rights or obligations
under this Agreement in full or in
part, except that:
|
|
(a)
|
Seller and its assignees may without such
consent assign all or a portion of their rights to receive and obtain
payment under this Agreement in connection with securitisation or bank
funding arrangements including the arbitration and law clauses herein; and
|
|
(b)
|
Buyer and its assignees may without such consent
assign all or a portion of their rights under this Agreement to any wholly
owned, direct or indirect, subsidiary of Buyer provided that
if that assignee ceases to be
a wholly owned, direct or indirect,
subsidiary of Buyer, then that
assignee shall re-transfer this Agreement to Buyer or
another wholly owned, direct or
indirect, subsidiary of Buyer.
|
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25.2
|
Any assignment under clause 25.1(a) above will not detract from either
party's obligations under this
Agreement.
|
25.3
|
Any
purported assignment under clause 25.1(b) will only be valid upon Buyer
providing, upon request, a guarantee for the obligations of the proposed
assignee in a form reasonably acceptable to
Seller.
|
25.4
|
Except
as expressly provided in this clause,
a person who is not a party to this contract has no right under the
Contracts (Rights of Third Parties) Xxx 0000 (“the Act”) to enforce any
term of this contract but this does not affect any right or remedy of a
third party which exists or is available apart from the
Act.
|
26.
|
FAILURE
TO ACCEPT DELIVERY AND FAILURE TO
DELIVER
|
26.1
|
If
Buyer fails to accept delivery for any reason other than Force Majeure,
Seller shall be entitled to (i) sell to other buyers the Alumina which
Buyer is or appears to be unable to accept, in which event Buyer shall be
liable to Seller for any loss, including any loss of purchase price and
any such transportation, insurance and freight costs actually incurred by
Seller, acting reasonably, in selling alumina to third parties in excess
of such transportation, insurance and freight costs Seller would have
incurred in accordance with the terms of this Agreement; or (ii) extend
the term of this Agreement. If Seller elects to extend the term of this
Agreement, the price for Alumina in effect for the extended term shall be
the same as the price in effect for Alumina scheduled to be delivered but
which Buyer was unable to accept. Buyer shall give Seller written notice
immediately upon anticipating an inability to accept
delivery. Buyer’s liability for failure to accept shall be limited to that portion of the quantity of Alumina
which Buyer is unable to accept.
|
26.2
|
If
Seller fails to deliver for any reason other than Force Majeure, Buyer
shall be entitled to (i) purchase from other sellers the quantity of
alumina which Seller is or appears to be unable to deliver, in which event
Seller shall be liable to Buyer for the
excess, if any, of the purchase price, transportation, insurance and freight
costs actually incurred by Buyer, acting reasonably, in procuring alumina
from third parties as a substitute for the Alumina and the purchase price, transportation, insurance and freight
costs Buyer would have paid to obtain
Alumina in accordance with the terms
of this Agreement; or (ii) extend the term of this
Agreement. If Buyer elects to extend the term of this
Agreement, the price for Alumina in effect for the extended term shall the
same as the price in effect for Alumina scheduled to be delivered but
which Seller was unable to deliver. Seller shall give Buyer
written notice immediately upon anticipating an inability to
deliver. Seller’s liability for failure to deliver shall be
limited to that portion of the
quantity of Alumina which Seller is unable to
deliver.
|
27.
|
DEFAULT
|
27.1
|
An
event of default (“Event
of Default”) with respect to a party (the “Defaulting Party”) shall
mean any of the following:
|
|
(a)
|
the
failure of the Defaulting Party to pay when due any payment required under this Agreement
within 10 Banking Days after written notice
thereof;
|
|
(b)
|
except
to the extent covered by clauses 19 and
26, the failure of the Defaulting Party to comply in all material
respects with its other material obligations under this Agreement and such
failure remains uncured for 10 Banking Days after written notice
thereof;
|
|
(c)
|
any
representation or warranty made by the Defaulting Party under this
Agreement shall prove to be untrue in any material
respect;
|
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|
(d)
|
the
Defaulting Party (i) makes an
assignment or any general arrangement for the benefit of creditors, (ii) files a petition or otherwise
commences, authorizes or acquiesces in the commencement of a proceeding or
cause of action under any bankruptcy or similar law for the protection of
creditors, or has such a petition filed against it and such petition is
not withdrawn or dismissed for 30 days after such filing, (iii) otherwise becomes bankrupt or
insolvent (however evidenced), (iv)
is unable to pay its debts as they fall due, makes a composition with its
creditors, commits any act of bankruptcy, becomes subject to an order for
winding up or dissolution or to the appointment of an administrator,
examiner, receiver, custodian, liquidator, trustee or other similar
official; or
|
|
(e)
|
The
occurrence of a material adverse change in the financial standing or
creditworthiness of the Buyer when compared to the Buyer's financial
standing as at the date of the contract which change, in the reasonable opinion of the Seller, affects
Buyer's ability to perform its financial obligations in respect of this Agreement (including any other
transactions between the parties), and the Buyer fails to provide or
procure reasonable security in the form of, inter alia, a guarantee,
letter of credit or other credit support in a form acceptable to the
Seller for the performance of its financial obligations to the Seller in
respect of this Agreement within
three (3) Banking Days of the Seller's request therefore.
|
27.2
|
Upon
the occurrence and during the continuation of an Event of Default, the
other party (the “Non-Defaulting Party”)
may in its sole discretion:
|
|
(a)
|
notify
the Defaulting Party of an early termination date (which shall be no
earlier that the date of such notice) on which this Agreement and the
transactions contemplated hereunder shall terminate (the “Early Termination
Date”);
|
|
(b)
|
withhold
any payments due to the Defaulting Party until such Event of Default is
cured; and/or
|
|
(c)
|
suspend
performance of its obligations under this Agreement until such Event of
Default is cured. If a notice of an Early Termination Date is given under
this Section, the Early Termination Date will occur on the designated date
whether or not the relevant Event of Default is then
continuing.
|
27.3
|
Once an Early Termination Date is
established, the Non-Defaulting Party shall in good faith calculate its
Losses, resulting from the termination of the transactions(s) contemplated
hereunder (the “Terminated
Transaction(s)”), aggregate such Losses with respect to the
Terminated Transaction into a single net amount, and then notify the
Defaulting Party of the net amount owed or owing. The
Non-Defaulting Party will calculate its Losses as of the Early Termination
Date, or, if that is not reasonably practicable, as of the earliest date
thereafter that is reasonably practicable. If the
Non-Defaulting Party’s aggregate losses and costs exceed its aggregate gains, the Defaulting Party shall, within
10 Banking Days of its receipt of such notice pay the net amount to the
Non-Defaulting Party, including interest at a rate of 1.5% per month from
the Early Termination Date until paid, plus any other amounts due and
owing under this Agreement to the Non-Defaulting
Party.
|
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-
27.4
|
If
an Event of Default occurs and/or an Early Termination Date is
established, the Non-Defaulting Party may (at its election) set off any or all amounts which the
Defaulting Party owes to the Non-Defaulting Party under this Agreement
against any or all amounts which the Non-Defaulting owes to the Defaulting
Party under this Agreement. Notwithstanding any provision to
the contrary contained in this Agreement, the Non-Defaulting Party shall
not be required to pay to the Defaulting Party any net amount due to an
early termination until the Non-Defaulting Party receives confirmation
satisfactory to it in its reasonable discretion that (i) all amounts due
and payable as of the Early Termination Date by the Defaulting Party under
all transactions, under this Agreement, or otherwise with the
Non-Defaulting Party have been fully and finally paid, and (ii) all
other obligations of any kind whatsoever of the Defaulting Party to make
any payments to the Non-Defaulting Party or any of its affiliates under
this Agreement or otherwise which are due and payable as of the Early
Termination Date have been fully and finally
performed.
|
27.5
|
Each
party stipulates that the payment obligations set forth in this section for the damages incurred are a
reasonable approximation of the anticipated harm or loss and acknowledges
the difficulty of estimation of actual damages, and each party hereby
waives the right to contest such payments as unenforceable, a penalty or
otherwise. Neither party shall be entitled to recover any
additional damages as a consequence of such harm or
loss.
|
28.
|
LIMITED
WARRANTY
|
28.1
|
Any
express or implied condition, warranty, term, guarantee or representation,
statutory or otherwise, not expressly stated in this Agreement is hereby
excluded.
|
29.
|
INDIRECT
LOSSES
|
29.1
|
Neither
Seller nor Buyer shall be liable, whether in contract or in tort or
otherwise, for indirect, consequential or special damages or losses of
whatsoever nature, however caused and
whether or not a party knew of the possibility of such
damages.
|
30.
|
SUSPENSION
OF QUOTATIONS
|
30.1
|
The
metal prices and currency quotations specified under this Agreement are
the quotations in general use for the pricing of the Alumina.
|
30.2
|
If
any of these price quotations cease to exist or cease to be published or
should no longer be internationally recognised as the basis for the
settlement of Alumina contracts (a
“Market Disruption Event”),
then upon the request of either party, Buyer and Seller will promptly use
the following methods to agree on a new pricing
basis:
|
|
(a)
|
Negotiated Fallback:
which means that each party will, promptly upon becoming aware of the
Market Disruption Event, negotiate in good faith to agree with the other
on a relevant price (or a method for determining a relevant price), and,
if the parties have not so agreed on or before the fifth Business Day
following the date of the Market Disruption
Event, clause (b) below shall
apply.
|
- 14
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|
(b)
|
Dealer Fallback: which means that the parties shall
expeditiously and jointly and in good faith agree on three independent
leading dealers in the principal trading market for the relevant
underlying commodity market from among those dealers with the highest
credit standing. Such dealers shall be appointed to make a
determination of the reasonable price
payable for the shipments to be made under this Agreement taking
into consideration the latest available quotation for the relevant commodity and any other information that,
in good faith, they deem relevant. The price to be paid under this Agreement shall
be the arithmetic mean of the three prices determined by such dealers, in which
case such calculation shall be binding and conclusive absent manifest
error. If the parties have not agreed upon the appointment of
the dealers on or before the sixth Business Day following the day on which
this clause becomes applicable, or if
a determination of the price cannot
be obtained from at least three dealers, then the dispute shall be referred to arbitration
in accordance with clause
22.
|
31.
|
INCOTERMS
|
31.1
|
Insofar
as not inconsistent herewith INCOTERMS 2000 (and any later amendments
thereto) shall apply to this
Agreement.
|
32.
|
CHANGE
OF EVENT
|
32.1
|
In
the event of any actual or prospective change in the organisation, control
or management of Buyer, including without limitation, a change to the
majority shareholding or privatisation or equivalent process of Buyer,
this Agreement will not be changed or in any way modified and shall
continue in full force and effect.
|
33.
|
NOTICES
|
33.1
|
All
notices, requests and other communications hereunder shall be in writing
and shall be deemed to have been duly given or made when sent by first
class mail, postage paid, or via telex or telefax addressed
to:
|
Century
Aluminum Company
0000
Xxxxxx Xxxx, Xxxxxxxx X, Xxxxx 000, Xxxxxxxx, XX 00000
Telefax
No: +
0 (000) 000-0000
Telephone
No: +
1 (831) 642-9300
Attention: General
Counsel
Century
Aluminum Company
P.O. Box
500, 0000 Xxxxx Xxxxx 000 X., Xxxxxxxxxx, XX 00000
Telefax
No: +
0 (000) 000-0000
Telephone
No: +
0 (000) 000-0000
Attention: Director
of Purchasing
Glencore
AG
Xxxxxxxxxxxxxxxxx 0, X.X. Xxx 000,
XX-0000 Xxxx, Xxxxxxxxxxx
Telefax
No: +
00 00 000 00 00
Telephone
No: +
41 41 709 25 59
Attention:
34.
|
LANGUAGE
|
34.1
|
This
Agreement is prepared in English and the English language shall be
authoritative and final.
|
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-
35.
|
ENTIRE
AGREEMENT
|
35.1
|
This
Agreement constitutes the entire agreement between the parties with
respect to the subject-matter hereof and supersedes any previous
agreements between the parties relating to the subject-matter. Each party
acknowledges and represents that it has not relied on or been induced to
enter into this Agreement by any representation, warranty or undertaking
other than those expressly set out in this Agreement. A party is not
liable to the other party for a representation, warranty or undertaking of
whatsoever nature that is not expressly set out in this
Agreement.
|
36.
|
REPRESENTATIONS
AND WARRANTIES
|
36.1
|
Each
party represents and warrants to the other
that:
|
36.2
|
Status: it is
duly organized under the laws of the jurisdiction of its formation and
each possesses the capacity to xxx and be sued in its own name and has the
power to carry on its business and to own its property and other
assets;
|
36.3
|
Power and
authority: it has the power to execute, deliver and
perform its obligations under this Agreement and any related agreements
and to carry out the transactions contemplated by those documents and all
necessary corporate, shareholder and other action has been or will be
taken to authorise the execution, delivery and performance of the
same;
|
36.4
|
Binding
obligations: its obligations under this Agreement and
any related agreements constitute their legal, valid, binding and
enforceable obligations;
|
36.5
|
Contraventions: the
execution, delivery and performance by it of this Agreement does
not:
|
|
(a)
|
contravene
any applicable law or regulation or any order of any governmental or other
official authority, body or agency or any judgment, order or decree of any
court having jurisdiction over it;
|
|
(b)
|
conflict
with, or result in any breach of any of the terms of, or constitute a
default under, any agreement or other instrument to which it is a party or
any license to which it is subject or
by which it or any of its property is bound;
or
|
|
(c)
|
contravene
or conflict with its constitutional
documents;
|
36.6
|
Insolvency: neither
it nor any of its affiliates has
taken any action nor have any steps been taken (including the presentation
of a petition or the filing or service of a notice) or legal procedures
been started or threatened against it for winding-up, dissolution or
reorganisation, the enforcement of any encumbrance over its assets or for
the appointment of a receiver, administrative receiver, or administrator,
trustee, regulator, supervisor or similar officer of it or of any of its
assets;
|
36.7
|
No
default: Neither it nor any of its affiliates is (nor
would be with any of the giving of notice, the lapse of time, the
determination of materiality, or the satisfaction of any other condition)
in breach of or in default under any agreement to which it is a party or
which is binding on it or any of its assets in a manner or to an extent
which could reasonably be expected to have a material adverse effect;
and
|
36.8
|
Litigation: no
action, litigation, arbitration or administrative proceeding has been
commenced, or is pending or threatened, against it or any of it’s
affiliates which, if decided adversely, could reasonably be expected to
have a material adverse effect and nor is there subsisting any unsatisfied
judgment or award given against it or any of it’s affiliates by any court,
arbitrator or other body.
|
- 16
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37.
|
ILLEGALITY/SEVERABILITY
|
37.1
|
If
any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect the legality,
validity or enforceability in that jurisdiction of any other provision of
this Agreement; or the legality, validity or enforceability in any other
jurisdiction of that or any other provision of this
Agreement.
|
38.
|
NO
WAIVER OF RIGHTS
|
38.1
|
A
failure or delay in exercising any right, power or privilege in respect of
this Agreement will not be presumed to operate as a waiver, and a single
or partial exercise of any right, power or privilege will not be presumed
to preclude any subsequent or further exercise, of that right, power or
privilege or the exercise of any other right, power or
privilege.
|
IN WITNESS WHEREOF the parties
have executed this Agreement as of the
respective dates specified below with effect from the Effective Date specified
on the first page of this Agreement.
Accepted:
/s/ Xxxxx X. States | /s/ Xxxxxx Xxxxxx | |
Century Aluminum Company | Glencore AG | |
Place and Date: Hawesville, KY, 16 April 2008 | Place and Date: Baar Xxxxxxxxxxx, 00 Xxxxx 0000 | |
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