Exhibit 10.2
CONSENT TO ASSIGNMENT AND GUARANTEE
THIS CONSENT TO ASSIGNMENT AND GUARANTEE (this "Agreement") is
entered into as of April 2, 2001 by and among Xxxxxx Aluminum & Chemical
Corporation, a Delaware corporation ("Kaiser"), Century Aluminum Company, a
Delaware corporation ("Century") and Century Aluminum of Kentucky LLC, a
Delaware limited liability company ("Century KY").
BACKGROUND
X. Xxxxxx is a party to that certain Alumina Purchase Agreement
dated as of December 18, 1997, as amended by Amendment Number 1, dated October
26, 1999 (the "Alumina Agreement"), between Kaiser and Southwire Company
("Southwire"), pursuant to which Kaiser has agreed to provide to Southwire its
requirements for alumina at Southwire's aluminum reduction facility located in
Hawesville, Kentucky (the "Hawesville Plant");
B. The Hawesville Plant is indirectly owned by Metalsco Ltd.
("Metalsco"), a wholly owned subsidiary of Southwire;
C. Southwire has agreed to sell and Century has agreed to purchase,
either directly or through an affiliate established for the purpose, all of the
authorized, issued, and outstanding capital stock of Metalsco, pursuant to the
terms of the stock purchase agreement dated as of August 31, 2000 (the "Stock
Purchase Agreement");
D. The Stock Purchase Agreement provides that, as a condition of
closing, Southwire shall assign to Century or an affiliate of Century all of
Southwire's rights with respect to the Alumina Agreement and Century or an
affiliate of Century shall assume certain liabilities thereunder;
E. Century and Southwire contemplate closing of the stock sale
pursuant to the Stock Purchase Agreement (the "Closing") on or about April 1,
2001;
F. Century and Southwire have agreed that the Closing shall be
effective as of 12:01 p.m. on the day on which the Closing takes place (the
"Effective Time"); and
X. Xxxxxx has agreed to execute this Agreement to evidence its
consent and agreement to the assignment of such rights in the Alumina Agreement
by Southwire.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, each intending to be legally bound, agree as follows:
1. Effective as of the Effective Time, Kaiser hereby consents
to the assignment and transfer by Southwire to Century Aluminum of Kentucky LLC,
a Delaware limited liability company and an affiliate of Century, or such other
affiliate of Century as Century may from time to time designate in writing (the
"Century Assignee") of all of Southwire's interests in the Alumina Agreement and
all rights contained therein and obligations arising thereunder from and after
the Effective Timer.
2. Subject to the terms hereof, Kaiser accepts the Century
Assignee as Southwire's successor in interest in and to the Alumina Agreement
effective as of the Effective Time. The Century Assignee shall become entitled
to all right, title and interest of Southwire in all respects as if the Century
Assignee were the original party to the Alumina Agreement.
3. Except as herein modified, the Alumina Agreement shall
remain in full force and effect.
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4. Kaiser represents that, to its knowledge, Southwire is not
currently in default under any provision of the Alumina Agreement. Similarly,
Southwire represents that, to its knowledge, Kaiser is not currently in default
under any provision of the Alumina Agreement.
5. Kaiser, Century and the Century Assignee hereby agree and
acknowledge: (a) that Southwire shall have no obligations arising from purchases
of alumina by the Century Assignee under the Alumina Agreement from and after
the Effective Time, (b) that Southwire and its affiliates shall be released of
their obligations to purchase alumina under the Alumina Agreement from and after
the Effective Time, and (c) that neither Southwire nor any of its affiliates
guarantees the performance of Century's or the Century Assignee's or their
affiliates' obligations under the Alumina Agreement.
6. With respect to all deliveries of alumina from and after
the Effective Time, Kaiser shall provide to the Century Assignee all future
invoices, notices, correspondence and other documents issued by Kaiser relating
to the Alumina Agreement in the manner specified in the Alumina Agreement to the
Century Assignee at the following address:
Century Aluminum of Kentucky LLC
Hawesville Plant
X.X. Xxx 000
0000 Xxxxx Xxxxx 000 Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Director of Purchasing
with a copy to:
Century Aluminum Company
0000 Xxxxxx Xxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Kitchen
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7. As promptly as practicable after the Effective Time, Kaiser
and the Century Assignee agree to amend and restate the Alumina Agreement to
include the Century Assignee as party in substitution of Southwire with all
other terms and conditions remaining unchanged.
8. From and after the Effective Time, Century (the
"Guarantor") unconditionally guarantees to Kaiser and its successors and
assigns, the due and punctual payment and performance of all obligations of the
Century Assignee for alumina purchased by the Century Assignee arising on or
after the Effective Time under the Alumina Agreement, as the same may hereafter
be amended or supplemented from time to time (collectively, the "Guaranteed
Obligations"), including, in case of default, interest on any amount due, when
and as the same shall become due and payable, whether on the scheduled payment
dates, at maturity, upon declaration of termination or otherwise, according to
the terms thereof. Upon any failure of the Century Assignee punctually to make
any such payment, Guarantor agrees to make such payment, or cause such payment
to be made, promptly upon demand made to Guarantor; provided, however that delay
in giving such demand shall not affect Guarantor's obligations under this
Agreement. Guarantor's guarantee obligations hereunder shall remain in full
force and effect or shall be reinstated (as the case may be) if at any time any
payment guaranteed hereunder, in whole or in part, is rescinded or must
otherwise be returned upon the insolvency, bankruptcy or reorganization of the
Century Assignee or otherwise, all as though such payment had not been made.
Guarantor's guarantee obligations hereunder constitute a guaranty of payment
when due and not one of collection.
9. Guarantor agrees that its guarantee obligations hereunder
shall be unconditional, irrespective of the absence of any action to enforce any
of the Guaranteed
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Obligations; the rendering of any judgment against Century Assignee or any
action to enforce the same or any waiver or consent given by Century Assignee
concerning any provisions of any of the Guaranteed Obligations; or any other
circumstances that might otherwise constitute a legal or equitable discharge of
a guarantor or a defense of a guarantor. Guarantor covenants that its guarantee
obligations hereunder will not be discharged except by complete payment of the
amounts payable under or in connection with the Guaranteed Obligations.
Guarantor's guarantee obligations hereunder shall continue to be effective if
the Century Assignee merges or consolidates with or into another entity, loses
its separate legal identity, ceases to exist or assigns any or all of its
rights, or delegates any or all of its duties under or in connection with the
Guaranteed Obligations. Guarantor hereby waives diligence; presentment, protest,
notice of protest, acceleration, and dishonor, filing of claims with a court in
the event of insolvency or bankruptcy of the Century Assignee all demands
whatsoever, except as noted above, and any right to require a proceeding first
against Century Assignee.
10. Guarantor certifies and warrants that, as of the Effective
Time, Guarantor's guarantee obligations hereunder shall constitute the valid
obligations of Guarantor and comply with all applicable laws.
11. The parties hereto acknowledge and agree that upon the
Effective Time, Kaiser shall have the continuing right to review Century
Assignee's credit, and may upon written notice to Century Assignee and Guarantor
modify the payment terms contained in section 3.2 of the Alumina Agreement or
seek such other assurances of payment if Xxxxxx reasonably determines that there
has been a material adverse change in the financial condition of Guarantor.
Guarantor further covenants and agrees to provide any financial information
reasonably requested by Kaiser for Xxxxxx'x use in making the foregoing
determination.
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12. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York, without giving
effect to the conflict of law rules thereof. Any action brought in connection
with this Agreement may be brought in, and shall be subject to the jurisdiction
of, the federal or state courts located in the City of New York, and the parties
hereby irrevocably consent to the jurisdiction of such courts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
XXXXXX ALUMINUM & CHEMICAL CORPORATION
By:
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Its:
CENTURY ALUMINUM COMPANY
By:
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Its:
CENTURY ALUMINUM OF KENTUCKY LLC
By:
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Its:
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Xxxxxxxxx Company is executing this
Agreement for the sole purpose of
making the representation contained in
Section 4 of this Agreement.
SOUTHWIRE COMPANY
By:
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Its:
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