EXHIBIT 2.4
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of April 1, 2003 (this "Security
Agreement") by and between Xxxxxxx Aluminum LLC, a Delaware limited liability
company ("Xxxxxxx"), Glencore Ltd., a Swiss corporation acting through its
Stamford, Connecticut branch ("Glencore") and Glencore Acquisition I LLC, a
Delaware limited liability company ("GAC," and together with Glencore,
"Creditor").
WHEREAS, Century Aluminum Company, a Delaware corporation
("Debtor"), Xxxxxxx, Glencore and GAC have entered into an asset purchase
agreement (the "Asset Purchase Agreement") pursuant to which Debtor is, through
its wholly owned subsidiary, Xxxxxxx, on this day buying all of the assets and
assuming all of the liabilities of Creditor relating to the aluminum reduction
plant located in Hawesville, Kentucky (the "Plant") and the aluminum reduction
business conducted at the Plant (the "Business"), as more fully set forth in the
Asset Purchase Agreement; and
WHEREAS, as part of the purchase price under the Asset Purchase
Agreement, the parties agreed that Debtor shall execute and deliver (i) a
promissory note in the principal amount of Forty Million United States Dollars
(US$40,000,000), in favor of GAC (the "Hawesville Purchase Note"), and (ii) a
promissory note in favor of Glencore issued pursuant to the Reimbursement
Agreement (as defined below) (the "Letter of Credit Reimbursement Note" and
together with the Hawesville Purchase Note, the "Notes"), each to be secured by
a guaranty by Xxxxxxx and certain other subsidiaries of Debtor in favor of
Creditor (the "Guaranty"), and the Notes and the Guaranty are also to be secured
by certain of the assets purchased by Xxxxxxx pursuant to the Asset Purchase
Agreement, as more fully set forth herein; and
WHEREAS, as a condition precedent to the consummation of the
transactions contemplated by the Asset Purchase Agreement, Xxxxxxx has agreed to
grant and perfect the first priority security interests in and to certain of the
assets purchased under the Asset Purchase Agreement.
NOW, THEREFORE, to induce Creditor to enter into the Asset Purchase
Agreement, to accept the Notes of Debtor and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used but not otherwise
defined herein shall have the meanings given to such terms in the Asset Purchase
Agreement. The following terms shall have the following meanings:
"Asset Purchase Agreement" has the meaning set forth in the first
WHEREAS clause of this Security Agreement.
"Business" has the meaning set forth in the first WHEREAS clause of
this Security Agreement.
"CAK" has the meaning set forth in Section 2 hereof.
"Collateral" has the meaning set forth in Section 2 hereof.
"Collateral Security Documents" means this Security Agreement, the
Mortgage, the Guaranty, the Notes, and all other agreements or similar
instruments delivered pursuant hereto or thereto.
"Creditor" has the meaning set forth in the Preamble of this
Security Agreement.
"Debtor" has the meaning set forth in the first WHEREAS clause of
this Security Agreement.
"Event of Default" means an "Event of Default" as defined in the
Hawesville Purchase Note or the Letter of Credit Reimbursement Note.
"GAC" has the meaning set forth in the Preamble to this Security
Agreement.
"Glencore" has the meaning set forth in the Preamble to this
Security Agreement.
"Guaranty" has the meaning set forth in the second WHEREAS clause of
this Security Agreement.
"Xxxxxxx" has the meaning set forth in the Preamble of this Security
Agreement.
"Hawesville Purchase Note" has the meaning set forth in the second
WHEREAS clause of this Security Agreement.
"Indenture" means the Indenture dated as of April 2, 2001, as the
same may be amended from time to time, among Debtor, as issuer, Century Aluminum
of West Virginia, Inc., Berkeley Aluminum, Inc., Virgin Islands Alumina
Corporation LLC, Century Kentucky, Inc., Metalsco Ltd., Skyliner, Inc., and NSA
Ltd., as guarantors, and Wilmington Trust Company, as trustee, relating to
Debtor's 11 3/4% Senior Secured First Mortgage Notes due 2008 (as described in
the Indenture).
"Letter of Credit Reimbursement Note" has the meaning set forth in
the second WHEREAS clause of this Security Agreement.
"Notes" has the meaning set forth in the second WHEREAS clause of
this Security Agreement.
"Perfection Certificate" means, with respect to Xxxxxxx, a
certificate substantially in the form of Exhibit A hereto, completed and
supplemented with the schedules and attachments contemplated thereby, and duly
executed by a Responsible Officer of Xxxxxxx.
"Plant" has the meaning set forth in the first WHEREAS clause of
this Security Agreement.
"Post-Petition Interest" means, with respect to each of Debtor and
Xxxxxxx, any interest that accrues under or in respect of the Notes, the
Guaranty or under the Mortgage after the commencement of any case, proceeding or
other action relating to the bankruptcy,
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reorganization or insolvency of Debtor or Xxxxxxx (or would accrue but for the
operation of applicable bankruptcy, reorganization or insolvency laws), whether
or not such interest is allowed or allowable as a claim in any such case,
proceeding or other action.
"Proceeds" means, with respect to Xxxxxxx, all proceeds of, and all
other profits, products, rents or receipts, in whatever form, arising from the
collection, sale, lease, exchange, assignment, licensing or other disposition
of, or other realization upon, the Collateral, including, without limitation,
all claims of Xxxxxxx against third parties for loss of, damage to or
destruction of, or for proceeds payable under, or unearned premiums with respect
to, policies of insurance in respect of, any of its Collateral whether now
existing or hereafter arising.
"Reimbursement Agreement" means the Reimbursement Agreement dated as
of the date hereof by and between Debtor and Glencore, pursuant to which Debtor
has agreed to reimburse or pay to Glencore amounts which may be paid by Glencore
under the guaranty provided for in the Letter of Credit and Reimbursement
Agreement dated as of October 10, 2001 among Citibank, N.A., NSA, Ltd. and
Glencore.
"Responsible Officer" means, with respect to Xxxxxxx, its chief
executive officer, chief financial officer, treasurer or any vice president.
"Revolving Credit Agreement" means the Revolving Credit Agreement
dated as of April 2, 2001, as the same may be amended from time to time, by and
among the Debtor, Century Aluminum of West Virginia, Inc., Berkeley Aluminum,
Inc., Century Kentucky, Inc., Metalsco Ltd. and NSA Ltd., as borrowers, Fleet
Capital Corporation, as agent, and the lending institutions party thereto.
"Secured Obligations" means (i) all principal of and interest on
each of the Notes payable by, and the performance of all obligations of, Debtor
arising under each of the Notes and the Reimbursement Agreement; (ii) the
performance of all obligations of Xxxxxxx arising under the Mortgage issued by
Xxxxxxx pursuant to the Asset Purchase Agreement; (iii) the payment and
performance obligations of Xxxxxxx, Century Kentucky, Inc., NSA, Ltd., Century
Aluminum of West Virginia, Inc., Berkeley Aluminum, Inc., Metalsco, Ltd., and
Skyliner, Inc. arising under the Guaranty (in the case of (i), (ii) and (iii),
including without limitation, Post-Petition Interest); (iv) all other amounts
from time to time payable by, or the performance of all obligations of, each of
Debtor and Xxxxxxx arising under the Asset Purchase Agreement; and (v) all
obligations of each of Debtor and Xxxxxxx arising hereunder.
"Security Agreement" means this Agreement.
"Security Interests" means the security interests in the Collateral
granted by Xxxxxxx under the Collateral Security Documents.
"UCC" means the Uniform Commercial Code as in effect on the date
hereof in the State of Delaware; provided, however, that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of any Security Interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
Delaware, then for purposes of the provisions hereof relating to such perfection
or the effect of
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perfection or non-perfection of any Security Interest the term "UCC" shall mean
the Uniform Commercial Code as in effect in such other jurisdiction.
Section 2. The Security Interests.
(a) As collateral security for the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) and performance of
the Secured Obligations in accordance with the terms thereof, subject to
subsection (b) below, Xxxxxxx hereby grants to Creditor a continuing security
interest in all right, title and interest of Xxxxxxx in and to all of the
following property, whether now owned or existing or hereafter acquired or
arising (all being collectively referred to as the "Collateral"):
(i) the fixed and movable assets comprising pot line five (5)
at the Plant, together with the real property thereunder, all as more fully
described in Exhibit A to the Asset Purchase Agreement (in the case of such
portion of the foregoing constituting real property, as evidenced by the
Mortgage);
(ii) an undivided twenty percent (20%) interest in and to all
other fixed and movable assets and properties comprising part of the Plant or
otherwise used in the conduct of the Business, but not including the fixed and
movable assets and properties comprising pot lines one (1) through four (4) at
the Plant or any assets or liabilities comprising the working capital of the
Business (in the case of such portion of the foregoing constituting real
property, as evidenced by the Mortgage);
(iii) a membership interest equal to twenty percent (20%) of
the total membership interests in Century Aluminum of Kentucky LLC, a Delaware
limited liability company ("CAK");
(iv) a twenty percent (20%) interest in the Alumina Purchase
Agreement dated as of April 2, 2001 between CAK, NSA, Ltd. and Glencore,
pursuant to which, among other things, CAK assigned to Glencore a twenty percent
(20%) interest in an agreement for the supply of xxxxx calcinated grade alumina,
all as more fully described in the Asset Purchase Agreement;
(v) all books, records, ledger cards, files, correspondence,
computer programs and related data processing software that at any time evidence
or contain information relating to any property described in subparts (i), (ii)
and (iii) above or are otherwise necessary or helpful in the collection thereof
or realization thereon; and
(vi) all Proceeds of the Collateral described in the foregoing
clauses (i), (ii), (iii), (iv) and (v).
(b) The Security Interests are granted as security only and shall
not subject Creditor to, or transfer or in any way affect or modify, any
obligation or liability of Debtor or Xxxxxxx with respect to any of the
Collateral or any transaction in connection therewith.
(c) Notwithstanding the foregoing, Fleet Capital Corporation, as
agent under the Revolving Credit Agreement, shall retain a security interest in
the inventory, receivables and
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proceeds thereof, with respect to the Debtor, Xxxxxxx and the Subsidiary
Guarantors. In no event shall the Collateral include the inventory, receivables
or proceeds thereof of the Debtor, Xxxxxxx or any of the Subsidiary Guarantors.
Section 3. Representations and Warranties. Xxxxxxx represents and
warrants to Creditor that:
(a) Xxxxxxx is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Delaware.
(b) Xxxxxxx has good, valid and marketable title (and in the case of
real property, good, marketable and insurable title in fee simple) to all of the
Collateral, free and clear of any Lien except for Permitted Liens (as defined in
the Asset Purchase Agreement) and those Liens created pursuant hereto and the
Mortgage.
(c) Xxxxxxx has not performed any acts that shall prevent Creditor
from enforcing any of the provisions of the Collateral Security Documents or
that would limit Creditor in any such enforcement. No financing statement,
security agreement, mortgage (except as contemplated hereby) or similar or
equivalent document or instrument covering all or any part of the Collateral
owned by Xxxxxxx is on file or of record in any jurisdiction in which such
filing or recording would be effective to perfect or record a Lien on such
Collateral, except financing statements, security agreements, mortgages or
similar or equivalent documents or instruments which will be released
simultaneously with the filing and perfection of the security interests granted
herein and in the Mortgage. No Collateral owned by Xxxxxxx is in the possession
of any Person (other than Xxxxxxx) asserting any claim thereto or security
interest therein.
(d) Xxxxxxx has delivered a Perfection Certificate to Creditor. The
information set forth therein is correct and complete in all respects as of the
date hereof and thereof.
(e) The Security Interests constitute, under the UCC, valid security
interests in all Collateral owned by Xxxxxxx securing the Secured Obligations.
(f) When UCC financing statements describing the Collateral shall
have been filed in the offices specified in Schedule 5(A) to Xxxxxxx'x
Perfection Certificate, the Security Interests will constitute perfected
security interests in the Collateral owned by Xxxxxxx to the extent that a
security interest therein may be perfected by filing pursuant to the UCC, prior
to all Liens and rights of others therein. Except for the filing of such UCC
financing statements and the Mortgage, no registration, recordation or filing
with any governmental body, agency or official is required in connection with
the execution or delivery of the Collateral Security Documents or is necessary
for the validity or enforceability thereof or for the perfection or enforcement
of the Security Interests.
Section 4. Further Assurances; Covenants. Xxxxxxx covenants as
follows:
(a) It will not change (i) its name, identity or corporate structure
in any manner, (ii) the location of its chief executive office or (iii) its
jurisdiction of organization in any
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manner unless it shall have given Creditor at least thirty (30) days' prior
written notice thereof, together with the delivery of a revised Perfection
Certificate reflecting such change.
(b) It will keep the Collateral at those locations listed on the
Perfection Certificate and will not change such location to one not listed on
the Perfection Certificate, without providing Creditor at least ten (10) days'
prior written notice thereof, together with the delivery of a revised Perfection
Certificate reflecting such change.
(c) It will, from time to time, at its expense, execute, deliver,
file and record any statement, assignment, instrument, document, agreement or
other paper and take any other action (including, without limitation, any
filings of financing or continuation statements under the UCC) that from time to
time may be necessary or desirable, or that Creditor may reasonably request, in
order to create, preserve, perfect, confirm or validate the Security Interests
in the Collateral or to enable Creditor to obtain the full benefits of the
Collateral Security Documents, or to enable Creditor to exercise and enforce any
of its rights, powers and remedies hereunder or thereunder with respect to any
of the Collateral. Notwithstanding Sections 4(a) and 4(b), to the extent any
event or change in circumstances occurs that would make any statement made in,
or Exhibit or Schedule to, the Perfection Certificate inaccurate or misleading
in any material respect Xxxxxxx shall deliver a revised Perfection Certificate
to Creditor within thirty (30) days following such event or occurrence. To the
extent permitted by applicable law, Xxxxxxx authorizes Creditor to execute and
file such financing statements or continuation statements without Xxxxxxx'x
signature appearing thereon. Xxxxxxx agrees that a carbon, photographic,
photostatic or other reproduction of this Security Agreement or of a financing
statement is sufficient as a financing statement. Xxxxxxx shall pay the costs
of, or incidental to, any recording or filing of any such financing or
continuation statements in which it is named as the debtor.
(d) It shall keep full and accurate books and records relating to
the Collateral, and stamp or otherwise xxxx such books and records in such
manner as Creditor may reasonably request in order to reflect the Security
Interests.
(e) Xxxxxxx will not sell, lease, exchange, assign or otherwise
dispose of, or grant any option with respect to, any of the Collateral;
provided, however, that so long as no Event of Default has occurred and is
continuing or would be caused thereby, Xxxxxxx may sell, lease or otherwise
dispose of (i) obsolete assets comprising part of the Collateral in the ordinary
course of business consistent with past practices, (ii) other assets comprising
part of the Collateral described in Section 2(a)(i), and (iii) other assets
comprising part of the Collateral described in Section 2(a)(ii), subject in the
case of clauses (ii) and (iii), to the following sentence. Xxxxxxx agrees that
in the event of any sale, lease, exchange, assignment or other disposition
permitted by this Section 4(e) of (A) assets comprising part of the Collateral
described in Section 2(a)(i) which, individually or in the aggregate have a fair
market value in excess of One Million United States Dollars (US$1,000,000), or
(B) assets comprising part of the Collateral described in Section 2(a)(ii)
which, individually or in the aggregate have a fair market value in excess of
Five Million United States Dollars (US$5,000,000), any proceeds with respect
thereto in excess of the respective amount set forth in clause (A) or (B), as
the case may be, shall be either (x) reinvested in Collateral within one (1)
year after the date of such sale, lease, exchange, assignment or other
disposition or (y) used to repay to GAC or Glencore, as the case may be, amounts
outstanding under the Hawesville Purchase Note and/or the Letter of Credit
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Reimbursement Note, as the case may be, subject to applicable restrictions
contained in the Indenture or the Revolving Credit Agreement, if any; and until
such reinvestment or repayment shall have occurred, such excess proceeds shall
be deemed to be Collateral hereunder, and on or prior to such sale, lease,
exchange, assignment or other disposition Xxxxxxx shall have taken such steps as
Glencore deems necessary or appropriate to perfect a first priority security
interest in such excess proceeds.
(f) Xxxxxxx will, promptly upon request, provide to Creditor all
information and evidence it may reasonably request concerning the Collateral to
enable Creditor to enforce the provisions of the Collateral Security Documents.
(g) Xxxxxxx shall maintain insurance on the Collateral against loss
or damage of the kinds customarily insured against by corporations similarly
situated and owning like properties, in such amounts, with such deductibles and
by such methods as are customary for corporations similarly situated in the
industry in which Xxxxxxx conducts its business. Xxxxxxx shall keep such
policies current and shall make all payments required thereunder on a timely
basis. Xxxxxxx shall name Creditor as loss payee with respect to such coverage
and shall supply Creditor with a certificate of insurance from its carrier with
respect thereto.
Section 5. General Authority. Xxxxxxx hereby irrevocably appoints
Creditor its true and lawful attorney, with full power of substitution, in the
name of Xxxxxxx or otherwise, for the sole use and benefit of Creditor, but at
the expense of Xxxxxxx to the extent permitted by law, to exercise, at any time
and from time to time while an Event of Default shall have occurred and is
continuing, all or any of the following powers with respect to all or any of the
Collateral:
(a) to demand, xxx for, collect, receive and give acquittance for
any and all monies due or to become due upon or by virtue thereof;
(b) to settle, compromise, compound, prosecute or defend any action
or proceeding with respect thereto;
(c) to sell, transfer, assign or otherwise deal in or with the same
or the proceeds or avails thereof, as fully and effectually as if Creditor were
the absolute owner thereof; and
(d) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;
provided, that (i) before exercising any of such powers, Creditor shall notify
Xxxxxxx that it intends to exercise one or more of its powers under this
section, and (ii) Creditor shall give Xxxxxxx not less than twenty (20) days'
prior written notice of the time and place of any sale or other intended
disposition of any Collateral owned by Xxxxxxx. Creditor and Xxxxxxx agree that
such notice constitutes "reasonable authenticated notification of disposition"
within the meaning of Section 9-611 of the UCC.
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Section 6. Remedies upon Event of Default.
(a) If an Event of Default shall have occurred and is continuing,
whether or not Creditor has accelerated the Secured Obligations, Creditor may
exercise any or all of the remedies available to it under the Collateral
Security Documents.
(b) If an Event of Default shall have occurred and is continuing,
whether or not Creditor has exercised any available right to declare any Secured
Obligations due and payable or seeks or pursues any other relief or remedy
available to it under applicable law, under this Security Agreement, the
Guaranty, the Mortgage, the Hawesville Purchase Note, the Reimbursement
Agreement, the Letter of Credit Reimbursement Note or otherwise, Creditor may
exercise all of the rights of a secured party under the UCC (whether or not in
effect in the jurisdiction where such rights are exercised) with respect to any
Collateral and, in addition, Creditor may sell the Collateral or any part
thereof at public or private sale, for cash, upon credit or for future delivery,
and at such price or prices as Creditor shall deem satisfactory. Creditor may be
the purchaser of any or all of the Collateral so sold at any public sale (or, if
the Collateral is of a type customarily sold in a recognized market or is of a
type which is the subject of widely distributed standard price quotations, at
any private sale; provided that such private sale is on terms available in such
recognized market or at a price or prices comparable to the standard price
quotations, as the case may be). Creditor is authorized, in connection with any
such sale, if it deems it advisable so to do, to impose such limitations or
conditions as it deems necessary or advisable in order to comply with any law.
Xxxxxxx agrees that it will execute and deliver such documents and take such
other action as Creditor deems necessary or advisable in order that any such
sale may be made in compliance with law. Upon any such sale, Creditor shall have
the right to deliver, assign and transfer to the purchaser thereof the
Collateral so sold. Each purchaser at any such sale shall hold the Collateral so
sold to it absolutely and free from any claim or right of Xxxxxxx of whatsoever
kind, including any equity or right of redemption of Xxxxxxx which may be
waived, and Xxxxxxx, to the extent permitted by law, hereby specifically waives
all rights of redemption, stay or appraisal which it has or may have under any
law now existing or hereafter adopted. Notice of any such sale shall be given to
Xxxxxxx as required by Section 5 and shall (i) in case of a public sale, state
the time and place fixed for such sale, and (ii) in case of a private sale,
state the day after which such sale may be consummated. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as Creditor may fix in the notice of such sale. At any such sale
the Collateral may be sold in one lot as an entirety or in separate parcels, as
Creditor may determine, in its sole discretion. Creditor shall not be obligated
to make any such sale pursuant to any such notice. Creditor may, without notice
or publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. If all or any part of the Collateral is sold on credit or for future
delivery, the Collateral so sold may be retained by Creditor until the selling
price is paid by the purchaser thereof, but Creditor shall not incur any
liability if such purchaser fails to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may again be sold upon like
notice. Creditor, instead of exercising the power of sale herein conferred upon
it, may proceed by a suit or suits at law or in equity to foreclose the Security
Interests and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.
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(c) For the purpose of enforcing any and all rights and remedies
under this Agreement, Creditor may (i) require Xxxxxxx to, and Xxxxxxx agrees
that it will, at its expense and upon the request of Creditor, forthwith
assemble moveable assets comprising part of its Collateral as directed by
Creditor and make such moveable assets available at a place designated by
Creditor which is reasonably convenient to Creditor and Xxxxxxx at the premises
of Xxxxxxx, (ii) to the extent permitted by applicable law, enter, with or
without process of law and without breach of the peace, any premises of Xxxxxxx
where any of the Collateral is or may be located, and without charge or
liability to it seize and remove any moveable assets comprising part of the
Collateral from such premises, (iii) have access to and use Xxxxxxx'x books and
records relating to its Collateral and (iv) prior to the disposition of the
Collateral, store any moveable assets comprising part of the Collateral without
charge in any storage facility owned by Xxxxxxx at the premises, repair or
recondition it or otherwise prepare it for disposition in any manner and to the
extent Creditor deems appropriate and, in connection with such preparation and
disposition, use without charge any trademark, trade name, copyright, patent or
technical process owned or used by Xxxxxxx.
(d) No remedy conferred upon Creditor hereunder or under any
Collateral Security Document is intended to be exclusive of any other and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or under any other Collateral Security Document or now or
hereafter existing at law or in equity or by statute or other provisions of law.
(e) If the proceeds of sale, collection or other realization of or
upon the Collateral are insufficient to cover the costs and expenses of such
realization and the payment in full of the Secured Obligations, Xxxxxxx shall
remain liable for any deficiency to the extent such party is obligated therefor
under the Notes, the Reimbursement Agreement, the Mortgage, the Guaranty and the
other documents executed in connection therewith.
Section 7. Expenses. Xxxxxxx agrees that it will forthwith upon
demand pay to Creditor:
(a) the amount of any taxes which Creditor may have been required to
pay by reason of the Security Interests in respect of the Collateral or to free
any of the Collateral from any Lien thereon (other than Permitted Liens);
(b) the cost of any and all filings, recording fees, taxes or any
other expense in connection with the perfection of the Security Interests
granted hereby;
(c) the amount of any and all reasonable out-of-pocket expenses,
including any excise, property, transfer, sales and use taxes imposed by any
state, federal or other local authority on any of the Collateral, and reasonable
fees and disbursements of counsel and of any other experts which Creditor may
have been required to pay in connection with the enforcement of the Collateral
Security Documents, including such expenses as are incurred in connection with:
(i) the collection, sale or other disposition of the
Collateral;
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(ii) any action taken by Creditor to effect compliance on
behalf of Xxxxxxx in respect of a failure by such party to comply with the
provisions of any Collateral Security Document which results (or is likely to
result) in the diminution of the value of the Collateral or the validity,
perfection, rank or value of any Security Interest in the Collateral;
(iii) protecting, storing, warehousing, appraising, insuring,
handling, maintaining and shipping the Collateral; or
(iv) the exercise by Creditor of any of the rights or powers
conferred upon it hereunder.
Any such amount not paid to Creditor on demand shall bear interest for each day
until paid at a rate per annum equal to the Default Rate (as such term is
defined in the Hawesville Purchase Note).
Section 8. Limitation on Duty of Creditor in Respect of Collateral.
Beyond the exercise of reasonable care in the custody and preservation thereof,
Creditor shall have no duty as to any Collateral in its possession or control or
in the possession or control of any agent or bailee or any income thereon or as
to the preservation of rights against prior parties or any other rights
pertaining thereto. Creditor shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which it accords
its own property, and shall not be liable or responsible for any loss or damage
to any of the Collateral, or for any diminution in the value thereof, by reason
of any act or omission of any agent or bailee selected by Creditor in good faith
or by reason of any act or omission by Creditor, except to the extent that such
liability arises from Creditor's gross negligence or willful misconduct.
Section 9. Application of Proceeds. If an Event of Default has
occurred and is continuing, Creditor may apply the proceeds of any sale of, or
other realization upon, all or any part of the Collateral to pay the Secured
Obligations. Any such payment shall be made in the following order of
priorities:
first, to pay the reasonable expenses of such sale or other
realization, including reasonable compensation to agents of and counsel
for Creditor, and all reasonable expenses, liabilities and advances
incurred or made by Creditor in connection with the Collateral Security
Documents, and any other unreimbursed expenses for which Creditor is to be
reimbursed pursuant to the Notes or Section 7 hereof;
second, to pay ratably the unpaid principal of the Secured
Obligations of each of Debtor and Xxxxxxx until all the principal of such
Secured Obligations shall have been paid in full;
third, to pay ratably all accrued but unpaid interest on the
Secured Obligations of Debtor in accordance with the provisions of the
Notes, until all the interest on such Secured Obligations shall have been
paid in full;
fourth, to pay all other Secured Obligations ratably, until
all such other Secured Obligations shall have been paid in full; and
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finally, to pay to Xxxxxxx or its successors or assigns, or as
a court of competent jurisdiction may direct, any surplus then remaining
from the proceeds of the Collateral owned by it.
Creditor may make such distributions hereunder in cash or in kind or, on a
ratable basis, in any combination thereof. All distributions made by Creditor
hereunder shall be final (except in the event of manifest error).
Section 10. Termination of Security Interests; Releases of
Collateral (including Insurance Proceeds).
(a) Upon the indefeasible payment and performance in full of all
Secured Obligations, the Security Interests and all obligations of Xxxxxxx under
this Security Agreement shall terminate and all rights to and interests in the
Collateral pledged by Xxxxxxx shall revert to Xxxxxxx.
(b) Upon any such termination of the Security Interests or release
of Collateral, Creditor will execute and deliver to Xxxxxxx such documents as
Xxxxxxx shall reasonably request to evidence the termination of the relevant
Security Interests or the release of the relevant Collateral, as the case may
be.
(c) Creditor agrees that, upon substantial payment and performance
of the Secured Obligations, Xxxxxxx shall be entitled to request from Creditor
the release of the Security Interests and Creditor shall consider such request,
provided however, that such release shall be in the sole discretion of Creditor.
Section 11. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission or
similar writing) and shall be given to such party to it at its address or
facsimile number set forth in the Asset Purchase Agreement. Each such notice,
request or other communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number referred to in the Asset
Purchase Agreement and confirmation of receipt is received, and (ii) if given by
any other means, when delivered at the address referred to in the Asset Purchase
Agreement.
Section 12. Waivers. No failure on the part of Creditor to exercise,
and no delay in exercising and no course of dealing with respect to, any right
or remedy under any Collateral Security Document shall operate as a waiver
thereof; nor shall any single or partial exercise by Creditor of any right or
remedy under any Collateral Security Document preclude any other or further
exercise thereof or the exercise of any other right or remedy.
Section 13. Successors and Assigns. This Security Agreement is for
the benefit of Creditor and its successors and, in the case of Creditor,
permitted assigns pursuant to the Asset Purchase Agreement, and in the event of
an assignment of all or any of the Secured Obligations, the rights of the holder
thereof under the Collateral Security Documents, to the extent applicable to the
indebtedness so assigned, shall be transferred with such indebtedness. This
Security Agreement shall be binding on Xxxxxxx and its respective successors and
permitted assigns.
11
Section 14. Changes in Writing. Any provision of this Security
Agreement may be amended, supplemented, modified or waived only if such
amendment, supplement, modification or waiver is in writing and is signed by
Xxxxxxx and Creditor.
Section 15. New York Law. This Security Agreement shall be construed
in accordance with and governed by the laws of the State of New York applicable
to contracts executed in and to be performed entirely within that state, except
as otherwise required by mandatory provisions of law and except to the extent
that remedies provided by the laws of any jurisdiction other than the State of
New York are governed by the laws of such jurisdiction.
Section 16. Severability. If any provision of any Collateral
Security Document is invalid or unenforceable in any jurisdiction, then, to the
fullest extent permitted by law, the other provisions of the Collateral Security
Documents shall remain in full force and effect in such jurisdiction and shall
be liberally construed in favor of Creditor in order to carry out the intentions
of the parties thereto as nearly as may be possible; and the invalidity or
unenforceability of any provision thereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
Section 17. Counterparts. This Security Agreement may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
Section 18. Waiver of Jury Trial. Each party hereto hereby
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or relating to this Security Agreement or the transactions
contemplated hereby.
Section 19. Marshaling; Payments Set Aside. Creditor shall be under
no obligation to marshal any assets in favor of Xxxxxxx or any other party or
against or in payment of any or all of the Secured Obligations. To the extent
that Xxxxxxx makes a payment or payments to Creditor or Creditor receives
payment from exercise of its right of setoff, and such payment or payments or
the proceeds of such setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, receiver or any other party, then (i) to the extent of such recovery,
the obligation or part thereof originally intended to be satisfied, and all
rights and remedies therefor, shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or setoff had
not occurred and (ii) Creditor shall pay and return such amount as Creditor may
be required to disgorge or otherwise pay to a trustee, receiver or any other
party in respect of the portion of the payment from Xxxxxxx.
[Signature page follows]
12
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
Xxxxxxx Aluminum LLC,
a Delaware limited liability company
By:
--------------------------------
Name:
Title:
Glencore Acquisition I LLC,
a Delaware limited liability company
By:
--------------------------------
Name:
Title:
Glencore Ltd.,
a Swiss corporation acting through
its Stamford, Connecticut branch
By:
--------------------------------
Name:
Title:
EXHIBIT A to Security Agreement
PERFECTION CERTIFICATE
The undersigned, a Responsible Officer of Xxxxxxx Aluminum LLC, a
Delaware limited liability company ("Xxxxxxx"), hereby certifies, pursuant to
the Security Agreement dated as of April 1, 2003 by and between Xxxxxxx,
Glencore Acquisition I LLC, a Delaware limited liability company, and Glencore
Ltd., a Swiss corporation acting through its Stamford, Connecticut branch (terms
defined therein being used herein as therein defined), as follows:
1. Name:
(a) The exact corporate name of Xxxxxxx as it appears in its
certificate of formation is as follows:
Xxxxxxx Aluminum LLC
(b) Set forth below is each other corporate name Xxxxxxx has
had since its organization, together with the date of the relevant change.
None.
(c) Except as set forth in Schedule 1, Xxxxxxx has not changed
its identity or corporate structure in any way within the past five years.
[Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of corporate organization. If any such change has occurred, include
in Schedule 1 the information required by paragraphs 1, 2 and 3 of this
certificate as to each acquiree or constituent party to a merger or
consolidation.]
(d) The following is a list of all other names (including
trade names or similar appellations) used by Xxxxxxx or any of its divisions or
other business units at any time during the past five years:
None.
2. Current Locations.
(a) The chief executive offices of Xxxxxxx (which are the only
locations where the books and records of Xxxxxxx with respect to the Collateral
are maintained) are located at the following addresses:
Mailing Address County State
0000 Xxxxx Xxxxx 000 Xxxxx
Xxxxxxxxxx, XX 00000 Xxxxxxx KY
0000 Xxxxxx Xxxx Xxxxxxxx XX
Xxxxxxxx X, Xxxxx 000
Xxxxxxxx, XX 00000
(b) The following are all the locations where Xxxxxxx
maintains any Collateral not identified above:
Mailing Address County State
None.
(c) The following are the names and addresses of all Persons
other than Xxxxxxx which have possession of any of the Collateral:
Mailing Address County State
NSA, Ltd. Xxxxxxx KY
0000 Xxxxx Xxxxx 000 Xxxxx
Xxxxxxxxxx, XX 00000
3. Prior Locations. Set forth below is the information required by
subparagraph 2(a) above with respect to each location or place of business
maintained by Xxxxxxx at any time during the past five years:
Mailing Address County State
None.
4. UCC Filings. A duly signed financing statement on Form UCC-1 in
substantially the form of Schedule 4(A) hereto has been duly filed in the
Uniform Commercial
2
Code filing office in each jurisdiction identified in paragraph 2 hereof.
Attached hereto as Schedule 4(B) is a true copy of each such filing duly
acknowledged by the filing officer.
5. Schedule of Filings. Attached hereto as Schedule 5 is a schedule
setting forth filing information with respect to the filings described in
paragraph 4 above.
6. Filing Fees. All filing fees and taxes payable in connection with
the filings described in paragraph 5 above have been paid.
IN WITNESS WHEREOF, I have hereunto set my hand this __ day of
April , 2003.
--------------------------------
Name:
Title:
3
Schedule 1 to Perfection Certificate
CHANGE IN IDENTITY OR CORPORATE STRUCTURE
None.
Schedule 4(A) to Perfection Certificate
LOCATION OF FILINGS
COPIES OF FILINGS
Debtor File Number Date of Filing
Schedule 4(B) to Perfection Certificate
COPIES OF UCC-1 FILINGS DULY
ACKNOWLEDGED BY THE FILING OFFICER
