Exhibit 10.3
ALUMINA PURCHASE AGREEMENT
This agreement is entered into as of the 26th day of May, 2003, between
Xxxxxx Aluminum & Chemical Corporation, a Delaware corporation (hereinafter
called "Seller"), and Century Aluminum of Kentucky LLC, a Delaware limited
liability company (hereinafter called "Buyer").
RECITALS:
A. Seller desires to sell and deliver to Buyer the requirements of Buyer
for xxxxx calcined metallurgical grade alumina ("Alumina").
B. Buyer desires to purchase and accept from Seller its requirements for
Alumina at its wholly owned aluminum smelter in Hawesville, Kentucky ("Buyer's
Plant").
NOW THEREFORE, in consideration of the premises and the covenants and agreements
set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:
Article 1
Definitions
1.1 Definitions. As used herein, unless otherwise defined herein or the
context otherwise requires, the following terms shall have the meanings
specified below.
"affiliate" of any person means any person controlling, controlled by or
under common control with such person.
"Business Day" means any day other than (a) a Saturday or Sunday or (b) a
day on which banking institutions in the State of New York shall be permitted or
required by law or executive order to be closed.
"Contract Year" means a period of time running from January 1 of each year
through December 31 of the same year.
"Customary Quick Dispatch" means a vessel is to be loaded as quickly as is
possible in the circumstances prevailing at the time of loading.
"FOB" means, to the extent that the 2000 version of the Incoterms are not
inconsistent with the provisions of this Agreement, FOB as defined by the 2000
version of the Incoterms published by the International Chamber of Commerce,
Paris, France, as amended from time to time (collectively, the "Incoterms").
"Force Majeure" means any events or circumstances beyond the reasonable
control of a party control, including but not limited to: accidents to or
breakdown or mechanical failure of machinery or equipment, however caused;
strikes or other labor troubles; shortage of labor, transportation, raw
materials, energy sources, or failure of usual means of supply; fire; explosion;
flood or hurricane; war, declared or undeclared that directly affects a
facility; insurrections; riots; sabotage; acts of God or of the public enemy;
river conditions; and priorities, allocations, or limitations or other acts
required or requested by government or any subdivisions, bureaus or agencies
thereof.
"Gramercy" means Seller's wholly owned Alumina refinery located at
Gramercy, Louisiana.
"LME Price" means the average of the London Metal Exchange cash price in
United States dollars per mt for 99.7% aluminum ingot for the month immediately
preceding the month of delivery as reported in Xxxxx'x Metals Week.
"mt" means a unit of metric weight of 1,000 kilograms.
Article 2
Quantity
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2.1 Contract Quantity. Subject to and in accordance with the terms and
conditions of this Agreement, commencing January 1, 2006, Seller shall sell and
deliver to Buyer, and Buyer shall purchase and accept from Seller, all of
Buyer's requirements for Alumina for its Plant for each Contract Year during the
term of this Agreement. Such requirements are estimated to be [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED FROM THIS EXHIBIT PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE COMMISSION] per Contract
Year.
Buyer shall give written notice to Seller no later than September 30 of
each Contract Year of its requirements for Alumina for the immediately following
Contract Year, and the parties agree that the requirements for Alumina for the
Contract Year then in effect shall continue for the immediately following
Contract Year if no such notice is given by Buyer. Buyer's requirements as
determined in accordance with the immediately preceding sentence are referred to
herein as the "Annual Requirements".
2.2 Adjustments to Annual Requirements. During the period commencing on
October 1 of each Contract Year (and October 1, 2005 for the first Contract
Year) and ending on July 31 of the immediately following Contract Year (such
immediately following Contract Year is referred to in this Section 2.2 as the
"Year of Adjustment"), Buyer, upon 90 days written notice to Seller (referred to
herein individually as an "Adjustment Notice" and collectively as the
"Adjustment Notices"), may increase or decrease its Annual Requirements in the
Year of Adjustment by an amount determined in accordance with this Section 2.2.
Subject to the provisions of the immediately following paragraph, the amount of
any adjustment, measured in mt, in Buyer's Annual Requirements in a Year of
Adjustment shall not exceed an amount determined by the following formula:
A = D x (B/365) x C
where
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A equals the maximum amount of any adjustment in mt;
B equals the number of days in the Year of Adjustment remaining after the
effective date of the adjustment as provided hereinbelow;
C equals the Annual Requirements for the Year of Adjustment; and
D equals the percentage adjustment, which cannot, either at any one time, or
cumulatively taking into consideration the net effect of all adjustments, exceed
plus or minus 2%. The 365 in the foregoing formula shall be increased to 366 in
those Contract Years where February has 29 days.
The maximum by which Buyer may adjust its Annual Requirements in a Year of
Adjustment shall take into account the cumulative net effect (summing
arithmetically both increases and decreases) of all prior percentage adjustments
in such Year of Adjustment, and Seller shall not be obligated to make an
adjustment as called for by an Adjustment Notice where the cumulative net effect
of all percentage adjustments (including the adjustment then under
consideration) would create a value for "D" in the above formula in excess of
2%. If Buyer reduces its Annual Requirements in any Year of Adjustment and
thereafter Buyer determines that it must purchase additional Alumina, all
additional Alumina shall be purchased hereunder from Seller, subject to the
availability of such Alumina from Gramercy.
Any adjustment pursuant to this Section 2.2 shall be effective as of the
date specified by Buyer in the Adjustment Notice provided, however, that such
effective date shall be no earlier than 90 days after the date on which Seller
has received the relevant Adjustment Notice. All Adjustment Notices shall be
forwarded to Seller by facsimile and first class mail.
Seller shall be deemed to receive each Adjustment Notice on the date on
which Buyer forwards such Adjustment Notice by facsimile to Seller.
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2.3 Delivery; Risk of Loss. Seller shall deliver and Buyer shall accept
the Annual Requirements in approximately evenly distributed shipments throughout
each Contract Year FOB Buyer's barge bottom at Gramercy. Title, risk of loss and
all other incidents of ownership shall pass to Buyer upon delivery at the FOB
point.
If Seller supplies Alumina hereunder from a source or sources other than
Gramercy in accordance with the provisions of Section 4.1 hereof, the terms of
delivery for such Alumina shall be equivalent in all material respects to
delivery FOB Gramercy.
2.4 Shipping. Buyer shall provide barges which are suitable for loading
and in conformity with restrictions and limitations at Gramercy. Unless
otherwise agreed by the parties in writing, and the deliveries of Alumina
scheduled for each month shall be a fraction of the Annual Requirements for the
Contract Year then in effect, equal to the number of days in the month divided
by the total number of days in the Contract Year. For example, if the Annual
Requirements in a 365-day year are [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
FROM THIS EXHIBIT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED
SEPARATELY WITH THE COMMISSION], the quantity of Alumina scheduled to be
delivered in a 31-day month would be approximately [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED FROM THIS EXHIBIT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
AND FILED SEPARATELY WITH THE COMMISSION]. Exact quantities to be delivered each
month shall be mutually agreed between the parties, shall be based on the Annual
Requirements for the Contract Year then in effect, and shall be based on the
Buyer's intended barge schedule provided to Seller at least fifteen (15) days
prior to commencement of each calendar quarter during the Contract Year then in
effect. The parties will cooperate in regard to scheduling deliveries hereunder
in accordance with local customs and practices, but in any event, Buyer shall,
unless otherwise agreed in writing, move its barges from the loading area as
soon as reasonably possible following completion of loading. Barge loadings
shall be on a Customary Quick Dispatch basis.
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2.5 Weight Loaded. The weights shall be determined at the time of loading.
Seller, at its cost, will provide Buyer, via facsimile or other means to assure
arrival at least three Business Days prior to arrival of the barge for
unloading, with a barge draft survey, issued by a certified independent
surveyor, of the barge into which the Alumina is loaded. Buyer shall have the
right to have a representative present (at Buyer's expense and risk) at the time
of loading, which representative is to be acceptable to Seller, such acceptance
not to be unreasonably withheld. Buyer shall have eight (8) Business Days after
the arrival of each barge at the Plant to challenge the accuracy of the draft
barge survey for that barge. Unless Buyer timely challenges such barge draft
survey, the final loaded weights determined as aforesaid shall be conclusive and
binding on the parties hereto for the purpose of determining the quantity of
Alumina delivered hereunder. Buyer and Seller shall use their best efforts to
amicably resolve any such challenge but, if such challenge cannot be so
resolved, such challenge shall be resolved in accordance with the provisions of
Article 8 of this Agreement. While such challenge is pending, Seller shall
remain obligated to continue to load and deliver Alumina pursuant to Section 2.4
hereof and Buyer shall timely pay, pursuant to Section 3.2 hereof, the purchase
price for all Alumina delivered hereunder, and Buyer shall be obligated to pay
the purchase price for the quantity of Alumina that Buyer reasonably believes to
have been on the barge that is subject to the challenge pursuant to this Section
2.5 until such challenge is resolved as provided herein.
Article 3
Price/Payment
3.1 Purchase Price Determination. The purchase price per mt of Alumina
(the "Alumina Price") delivered by Seller to Buyer hereunder during the term of
this Agreement shall be determined
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for the month in which the Alumina is delivered. The Alumina Price shall be an
amount equal to the LME Price multiplied by [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED FROM THIS EXHIBIT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND
FILED SEPARATELY WITH THE COMMISSION]. If the LME Price ceases to be published,
the parties shall agree upon a substitute index intended to reflect the price of
primary aluminum sales to be used in calculating the Alumina Price hereunder.
3.2 Payment. Monetary references in this Agreement are to United States
dollars, and all transactions and payments pursuant to this Agreement shall be
made in United States dollars. Seller shall invoice Buyer promptly after the end
of each month for all Alumina delivered hereunder during said month. Payment for
the Alumina shall be made by Buyer by wire transfer to an account designated by
Seller within 30 days after the end of each month.
Without prejudice to any other right Seller may have, the amount of any
overdue payments or any partial payment shall bear interest at a rate per annum
equal to the U.S. prime rate in effect from time-to-time for first class
customers as quoted by Citibank N. A., New York, New York, plus 2%, over the
period from the date on which payment or partial payment was due to the date of
actual receipt of payment.
Seller shall promptly forward to Buyer by facsimile and first class mail
the xxxx of lading for each barge but not earlier than the date of Seller's
release of the barge from its dock for transport to the Plant.
3.3 Royalties, Taxes, Duties and Licenses. All royalties, taxes and duties
imposed or levied on the Alumina to be delivered under this Agreement in the
country in which the Alumina is delivered shall be for the account of and paid
by the Seller to the point when the Alumina has been delivered to Buyer in
accordance with this Agreement. All other taxes and duties imposed or levied on
the Alumina after delivery shall be for the account of and paid by Buyer.
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3.4 Guarantee. Century Aluminum Company ("Century") unconditionally
guarantees to Seller and its successors and assigns, the due and punctual
payment and performance of all obligations of Buyer for Alumina purchased by
Buyer under this Agreement, as the same may be hereafter 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 hereof. Upon any
failure of Buyer punctually to make any such payment, or cause such payment to
be made, promptly upon demand made to Century; provided, however that delay in
giving such demand shall not affect Century's obligations under this Agreement.
Century'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 Buyer or
otherwise, all as though such payment had not been made. Century's obligations
hereunder constitute a guaranty of payment when due and not one of collection.
Century further agrees that its guarantee obligations hereunder shall be
unconditional, irrespective of the absence of any action to enforce any of the
Guaranteed Obligations; the rendering of any judgment against Buyer or any
action to enforce the same or any waiver or consent given by Buyer 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. Century 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. Century's
guarantee obligations hereunder shall continue to be effective if Buyer
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merges or consolidates with or into another entity, loses its separate legal
identify, ceases to exist or assigns any of its rights, or delegates any or all
of its duties under or in connection with the Guaranteed Obligations. Century
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 Buyer and all demands whatsoever, except as noted above, and any
right to require a proceeding first against Buyer.
Century certifies and warrants that Century's guarantee obligations
hereunder constitute the valid and binding obligations of Century and comply
with all applicable laws.
3.5 Credit Review. The parties hereto acknowledge and agree that Seller
shall have the continuing right to review Buyer's credit, and may upon written
notice to Buyer and Century modify the payment terms contained in Section 3.2 of
this Agreement or seek such other assurances of payment if Buyer reasonably
determines that there has been a material adverse change in the financial
condition of Century. Century further covenants and agrees to provide any
financial information reasonably requested by Seller for Seller's use in making
the foregoing determination.
Article 4
Quality
4.1 Specifications/Source of Supply. The parties intend that the Alumina
sold by Seller to Buyer pursuant to this Agreement shall be produced at Gramercy
and shall conform to the specifications set forth in Exhibit A. Notwithstanding
the above, Seller may elect to supply from a source or sources other than
Gramercy, provided that Alumina supplied from such other source(s) shall conform
to the typical quality parameters of Gramercy alumina set forth in Exhibit A
hereto, unless otherwise mutually agreed.
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4.2 Conformity Determination/Resolution of Non-Conforming Material. One
representative sample of each shipment of Alumina shall be taken in accordance
with the sampling procedures applicable at Gramercy. Buyer shall have the right
to have a representative present (at Buyer's expense and risk) at such sampling,
which representative is to be acceptable to Seller, such acceptance not to be
unreasonably withheld. Such sample shall be deemed to be a representative sample
of the Alumina delivered in that shipment by Seller to Buyer.
The sample so taken shall be divided into portions using generally
accepted laboratory techniques. One portion shall be promptly dispatched to
Buyer, one portion shall be used by Seller for analysis and Seller shall ensure
that one portion (the referee sample) shall be held by Seller for 90 days after
the date of the shipment, and then disposed of unless Seller or Buyer has
requested in writing that it be retained for a longer period. The cost of the
sampling and dispatch to Buyer shall be for the account of the Seller.
Seller shall analyze the sub-sample retained by it for each shipment of
Alumina within two days of the preparation of such sample in accordance with
Seller's relevant standard practice. Seller shall send to Buyer the results of
such analysis (by facsimile transmission) promptly after they are known. Seller
shall provide to Buyer an original of the certificate of analysis stating the
results of the analysis, and shall forward such certificate to Buyer as early as
practicable.
If the analysis shows that the sample analyzed does not exceed the maximum
limits specified in Exhibit A annexed hereto, it will be presumed that the
entire shipment from which the sample was taken conforms with the quality
specifications set forth in Exhibit A.
Within 30 days after receipt of the sample dispatched to Buyer, Buyer may
notify Seller that the Alumina delivered does not conform to the quality
specifications and the extent of such
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non-conformity. If Buyer does not notify Seller within this period, the Alumina
so delivered shall be deemed to comply with such specifications. If Buyer does
so notify Seller within this period, Seller shall advise Buyer within ten days
after such notification is received whether or not Seller agrees with Buyer's
analysis. If Seller does not agree, the referee sample will be analyzed as soon
as possible by Norsk Hydro Research & Development Laboratory, Stavanger, Norway,
or such other laboratory as the parties shall agree upon (the "referee
laboratory"). The referee laboratory will analyze the referee sample in
accordance with its applicable standard analytical procedures for alumina
analysis, and a copy of its analysis shall be made available to both Buyer and
Seller. Such analysis shall be final and binding on both Buyer and Seller and
the quality of Alumina contained in the relevant shipment shall be deemed to be
the same as that of the referee sample. The cost of any referee analysis will be
borne by the party whose results differ most from those given by the referee
laboratory.
If the analysis of the referee laboratory indicates that the referee
sample does not conform to the contractual specifications or if Seller accepts
that the Alumina does not so conform, Seller and Buyer shall within fifteen days
after receipt of such analysis or notification of such acceptance, as the case
may be, meet in good faith to determine whether a reasonable and mutually
acceptable arrangement can be made to compensate Buyer for the shipment of
Alumina not meeting such contractual specifications. In the event Seller and
Buyer do not reach a mutually acceptable agreement, Buyer has the right to
return the Alumina in question at Seller's expense including the freight cost of
the original shipment and demurrage, if any.
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Article 5
Term; Termination
5.1 Term. This Agreement shall commence on the date hereof and shall
terminate on December 31, 2008, unless sooner terminated in accordance with the
provisions of Section 5.2 of this Agreement or unless extended in accordance
with the provisions of Section 7.4 of this Agreement. The parties agree that
they will discuss in good faith the possibility of extending the supply
relationship established by this Agreement if either party advises the other
prior to December 31, 2007, that it is interested in such an extension. If the
parties reach an agreement on the extension of the relationship established by
this Agreement, then this Agreement shall be amended to reflect the new terms
and conditions agreed to by the parties or a new agreement will be entered into
to reflect such terms and conditions.
5.2 Termination. This Agreement may be terminated prior to the expiration
of its term:
(a) By mutual consent of Buyer and Seller;
(b) By Seller, if Seller is not in default hereunder and if Buyer
shall have breached or failed to perform any of its covenants or agreements
contained herein and such breach or failure shall continue for 10 days after
notice thereof by Seller to Buyer;
(c) By Buyer, if Buyer is not in default hereunder and if Seller
shall have breached or failed to perform any of its covenants or agreements
contained herein and such breach or failure shall continue for 10 days after
notice thereof by Buyer to Seller;
(d) By Seller, if Seller is not in default hereunder and if an event
of Force Majeure has persisted for a continuous period of 180 days and has
prevented Buyer from fulfilling its obligations hereunder; or
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(e) By Buyer, if Buyer is not in default hereunder and if an event
of Force Majeure has persisted for a continuous period of 180 days and has
prevented Seller from fulfilling its obligations hereunder.
The right to terminate this Agreement as provided for in this Section 5.2
may be exercised only by written notice given by the terminating party to the
non-terminating party, and such termination shall be effective on the thirtieth
day after the date on which the notice of termination is given to the
non-terminating party.
Upon any termination of this Agreement (including termination upon the
expiration of the term of this Agreement), no party to this Agreement shall have
any liability to any other party to this Agreement, except for any such
liability as may have accrued through the date of termination.
Any termination of this Agreement pursuant to this Section 5.2 is subject to all
of the provisions of Article 8 hereof.
Article 6
Liability
6.1 Liability. Neither party to this Agreement shall be liable to the
other party hereto for direct economic loss or damage, including, but not
limited to, personal injuries or loss of physical equipment, actually sustained
as a result of the operation of this Agreement, unless such loss or damage
result from the gross negligence, willful act or intentional failure to act of a
party hereto.
Neither party to this Agreement shall be liable to the other party hereto
for any indirect, consequential or incidental damage or loss incurred as a
result of the operation of this Agreement, unless such damage or loss is the
result of willful action or intentional failure to act of a party hereto.
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Article 7
Force Majeure
7.1 General. Neither party to this Agreement shall be liable for any delay
in performing or failure to perform its obligations (except for delay or failure
to pay money when due) due to events of Force Majeure. Failure to deliver or to
accept delivery in whole or in part because of the occurrence of an event of
Force Majeure shall not constitute a default hereunder nor subject either party
to liability for any resulting loss or damage.
7.2 Efforts to Cure. Both parties agree to use their respective reasonable
efforts to cure any event of Force Majeure to the extent that it is reasonably
possible to do so, it being understood that neither shall be required to make
any concession or grant any demand or request in order to bring to an end any
strike, lockout or other industrial disturbance where such course is deemed
inadvisable in its sole discretion.
7.3 Alumina Purchases and Sales. If by reason of Force Majeure Seller is
unable to deliver or timely deliver Alumina to Buyer and/or to other customers
to which Seller directly or indirectly has an obligation to sell Alumina from
Gramercy, then, and in each such event, any Alumina available for sale from
Gramercy will be shipped to each such customer, including Buyer, in proportion
to the amount of Alumina each is committed to purchase from Seller's facility at
Gramercy during the calendar year(s) in which the event of Force Majeure
occurred or continued to exist. Additionally, Seller will endeavor to maintain
the supply of Alumina hereunder to Buyer if possible from other sources, and any
such deliveries shall be applied against the quantity referred to in Section 2.1
hereof. The quantities referred to in Section 2.1 shall be reduced to the extent
of deliveries omitted by Seller due to the occurrence of an event of Force
Majeure.
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Buyer, during any period of Force Majeure declared by Seller, may purchase
Alumina from third parties to the extent Seller is unable to supply Alumina
hereunder. Seller, during any period of Force Majeure declared by Buyer, may
sell Alumina to third parties to the extent Buyer is unable to accept delivery
of Alumina hereunder. The quantities referred to in Article 2.1 shall be reduced
accordingly for any party so opting under this Article.
If Seller reduces or ceases deliveries hereunder by reason of Force
Majeure, Seller shall give Buyer as much advance notice as is reasonably
possible of Seller's ability and intent to resume normal delivery hereunder,
provided, however, that if Buyer has covered its needs from another supplier,
Buyer shall not be obligated to resume acceptance of deliveries from Seller
until expiration of its undertakings pursuant to any such contract for cover and
further provided that in such event Buyer shall use reasonable efforts in good
faith to adjust and modify its contract for cover in order to enable it to
resume acceptance of deliveries hereunder as promptly as possible.
If Buyer reduces or ceases its purchase of Alumina hereunder by reason of
Force Majeure, Buyer shall give Seller as much advance notice as is reasonably
possible of Buyer's ability and intent to resume normal purchases of Alumina
hereunder, provided, however, that if Seller has entered into agreements to sell
Alumina to third parties during such period of Force Majeure, Seller shall not
be obligated to resume deliveries hereunder to Buyer until expiration of its
undertakings pursuant to any such agreements and further provided that in such
event Seller shall use reasonable efforts in good faith to adjust and modify
such agreements in order to enable it to resume deliveries hereunder as promptly
as possible.
7.4 Extension of Term. If a party is excused from performance hereunder as
a result of an event of Force Majeure occurring prior to December 31, 2007, the
party not claiming Force Majeure
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(the "Non-Claiming Party") may extend the term of this Agreement for a period
sufficient to make up the reduction in deliveries by the other party resulting
from the Force Majeure.
Furthermore, if a party is excused from performance hereunder as a result
of an event of Force Majeure occurring during the period of January 1, 2008
through December, 31, 2008, the Non-Claiming Party may extend the term of this
Agreement for a period sufficient to make up the reduction in deliveries by the
other party resulting from the Force Majeure provided that the parties have
entered into an agreement pursuant to which Buyer will purchase Alumina from
Seller commencing January 1, 2009. The Non-Claiming Party shall elect to extend
the term of this Agreement in accordance with this Section 7.4 no later than 30
days after the resumption of deliveries following each event of Force Majeure.
In no event shall the aggregate extensions of this Agreement by a Non-Claiming
Party exceed 180 days. The Alumina Price for Alumina delivered during any
extension of this Agreement shall be determined for the month during the
extended term of this Agreement in which the Alumina is delivered and shall be
an amount equal to the LME Price multiplied by [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED FROM THIS EXHIBIT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
AND FILED SEPARATELY WITH THE COMMISSION].
7.5 Notice. Upon the occurrence of an event of Force Majeure, the party
affected by the event of Force Majeure shall promptly notify the other party
hereto of such events and shall specify in reasonable detail the facts
constituting such events of Force Majeure.
Article 8
Arbitration
8.1 Resolution of Disputes. The parties have entered into this Agreement
in good faith and in the belief that it is mutually advantageous to them. It is
with that same spirit of cooperation that they agree to attempt to resolve any
dispute amicably without the necessity of arbitration.
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Accordingly, the parties agree that with respect to controversies, claims or
disputes arising out of or in connection with or relating to this Agreement
(collectively, a "Dispute"), they will first use the procedures (the
"Procedure") specified in this Section 8.1 prior to submitting any Dispute to
arbitration.
The party desiring to commence the Procedure shall give written notice
(the "Notice") to the other party describing in general terms the nature of the
Dispute and such party's claim for relief and designating one or more
individuals with authority to settle the Dispute on such party's behalf. The
party receiving such notice shall within 10 days after it is given designate by
written notice to the other party one or more individuals with authority to
settle the Dispute on such party's behalf.
The designees shall meet within 30 days after the Notice was given and
thereafter as often as the designees reasonably deem necessary to exchange all
relevant information and to discuss the problem and negotiate in good faith in
an effort to resolve the Dispute. During the course of such negotiation, all
reasonable requests made by one party to the other for information will be
honored in order that each of the parties may be fully advised. The specific
format and timing of such discussions shall be left to the discretion of the
designees, but may include the preparation of agreed upon statements of fact or
of positions furnished to the other party. All verbal and written communications
between the parties and issued or prepared in connection therewith shall be
deemed prepared and communicated in furtherance, and in the context, of dispute
settlement, and shall be exempted from discovery and production in any
proceedings, and shall not be admissible in evidence (whether as an admission or
otherwise) in any proceedings for the resolution of the Dispute.
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If the designees do not meet within 30 days after the Notice was given, or
the Dispute has not been resolved within 70 days after the Notice was given,
either party may then initiate arbitration as provided for in Section 8.2 of
this Agreement.
8.2 Arbitration. If the Dispute has not been timely resolved as
contemplated in Article 8.1 or if a party will not participate in such
procedure, the Dispute, and any dispute, disagreement, or controversy as to
whether such Dispute is arbitrable, shall be finally settled under the
Commercial Arbitration Rules of the American Arbitration Association ("AAA")
except that a dispute as to either party's undertaking to continue to perform
its obligations hereunder pending disposition of any Dispute shall be resolved
as provided in Section 8.5 hereof. Either party may commence such an arbitration
by giving written notice (a "Notice of Arbitration") to the other party. Such
notice shall contain a brief statement setting forth the nature of the Dispute
and the relief sought.
Within 30 days of the date the Notice of Arbitration is deemed to have
been given under Section 9.1, each party to this Agreement shall select one
arbitrator by giving notice of selection to the other party. Within 30 days of
the date on which the last of the two arbitrators is selected, the two
arbitrators so selected shall select a third arbitrator who shall chair the
arbitration (the "Chairperson"). If the two arbitrators are unable to select the
Chairperson within such 30 day period, then either arbitrator or, if an
additional 30 days has elapsed without the arbitrators having either selected
the Chairperson or having made a request pursuant to this sentence, then either
party may request the AAA to select the Chairperson, and the AAA shall do so
within 30 days of such request. The two arbitrators and the Chairperson so
selected shall constitute the arbitration panel.
If a party does not select an arbitrator within 30 days of the date the
Notice of Arbitration is given, then such party shall be precluded from
selecting an arbitrator. In that event, the arbitrator
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timely selected shall select the Chairperson and those two persons shall
constitute the arbitration panel.
The place of arbitration shall be in New York, New York, or such other
city in the State of New York that the parties mutually agree upon, and the laws
applicable to the arbitration procedure shall be the internal laws of the State
of New York (without regard to applicable principles of conflict of laws). The
language of the arbitration shall be English.
The parties agree that the award of the arbitrators shall be the sole and
exclusive remedy between them regarding the Dispute (including any dispute,
disagreement or controversy as to whether such Dispute is arbitrable) presented
to the arbitrators and shall be determined and shall promptly be payable in
United States dollars free of any tax, deduction or off set. The parties further
agree that (a) any costs, fees, (including reasonable attorney's fees), expenses
or taxes incident to enforcing the award shall, to the maximum extent permitted
by law, be charged against and paid by the party resisting such enforcement; (b)
all costs, fees and expenses of the arbitration proceedings (exclusive of the
costs, fees (including attorney's fees) and expenses incurred by the parties in
connection with the resolution of the Dispute and participating in the
arbitration proceedings) shall be shared equally by the parties; and (c) each
party shall bear the costs, fees (including attorney's fees) and expenses
incurred by it in connection with the resolution of the Dispute and
participating in the arbitration proceedings except that the arbitrators may, as
part of any award, order reimbursement thereof in whole or in part by any party
of the arbitration found by the arbitrators to have deliberately delayed the
arbitration or to have otherwise been in bad faith.
8.3 Nature of Award, Interest. The award of the arbitrators shall be final
and binding upon the parties and the parties shall accept and execute without
delay such arbitration award.
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The arbitration award shall include interest from the date of any damages
incurred for breach or other violation of this Agreement and from the date of
the award until paid in full at a rate to be fixed by the arbitrators.
8.4 Judicial Proceedings. Judgment upon the award may be entered in any
court having jurisdiction or application may be made to such court for a
judicial acceptance of the award and an order of enforcement as the case may be.
Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of any New York state or federal court sitting in New York, New
York, over any suit, action or proceeding to compel arbitration under this
Agreement. Each party hereby agrees and consents that, in addition to any
methods of service of process provided for by applicable law, service of process
in any such suit, action or proceeding may be made by 24-hour guaranteed courier
service (such as Federal Express) directed to the persons at the addresses
provided for in Section 9.1 hereof, and service so made shall be complete one
Business Day following the date of receipt shown on the receipt of such courier
service.
8.5 Obligations to Perform. Pending the submission to arbitration and
thereafter until the arbitrators make their award the parties hereto shall
continue to perform their obligations hereunder without prejudice to a final
adjustment in accordance with the award made by the arbitrators, and the parties
hereto shall have full recourse to the courts to enforce their rights under this
Section 8.5, it being expressly agreed that nothing in Article 8, or otherwise,
is intended to, or shall, operate to deprive any court of competent jurisdiction
of its full power and authority to grant appropriate relief by way of injunction
or restraining order or otherwise, in accordance with the principles of statutes
or common law or equity prevailing in such jurisdiction, to require the parties
hereto to continue to
20
perform their obligations under this Agreement in furtherance of the objectives
and purposes of this Section 8.5, it being expressly agreed that any controversy
regarding such performance of any such obligations hereunder pending resolution
of any other dispute arising under this Agreement is not arbitrable.
Article 9
Miscellaneous
9.1 Notices. All notices or communications required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly given
(a) when received (in the case of personal delivery or delivery by 24-hour
guaranteed courier service or delivery within the United States by registered or
certified United States mail) at the addresses set forth below or (b) when
transmitted by fax (and confirmed by 24-hour guaranteed courier service or
registered or certified United States mail) to the fax numbers set forth below:
If to Seller: Xxxxxx Aluminum & Chemical Corporation
P. O. Box 3370
0000 Xxxxxxx Xxx.
Xxxxxxxx, XX 00000-0000
Attn: Director, Alumina Marketing & Sales
FAX: (000) 000-0000
With a Copy to:
Xxxxxx Aluminum & Chemical Corporation
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Alumina Business Unit Legal Counsel
FAX: (000) 000-0000
If to Buyer: Century Aluminum of Kentucky LLC
Hawesville Plant
X.X. Xxx 000
0000 Xxxxx Xxxxx 000 Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Director of Purchasing
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With a Copy to:
Century Aluminum Company
0000 Xxxxxx Xxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Kitchen
or to such other different person(s) or address(es) as may by notice be
designated, provided, however, that unless notice to the contrary is given, it
is contemplated that the normal, routine, day-to-day administration of and
operations of this Agreement shall be conducted in accordance with customary
practices prevailing between the parties, and that such documents as quantity
estimates, barge schedules, bills of lading, barge draft surveys and responses
thereto, and samples or analyses, and the like, be transmitted through, to, from
and between those persons customarily handling the same, and in the same manner,
as heretofore under prior similar agreements.
9.2 Headings. The headings of Articles and Sections of this Agreement are
merely for convenience of reference and have no substantive significance.
Headings shall be disregarded in the interpretation of this Agreement.
9.3 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior and contemporaneous written or oral understandings, agreements,
negotiations and discussions between the parties relating to the subject matter
hereof.
9.4 Amendments. No amendment to or modification of this Agreement shall be
valid or binding on either party hereto unless reduced to writing and executed
by both parties hereto.
9.5 Waiver. No waiver by either party of any breach or default in
performance by the other party, and no failure to exercise any right or option
given to either party hereunder or to insist
00
xxxx xxxxxx compliance with or performance of the terms of this Agreement, shall
constitute a waiver of the provisions of this Agreement with respect to any
subsequent breach thereof.
9.6 Severability. Should any provision herein contained prove to be
invalid, illegal or unenforceable, the remaining provisions shall remain of full
force and effect and the parties shall endeavor in good faith to agree on the
details of alternative provisions which are valid, legal and enforceable and
which come nearest to the original Articles in legal and economic impact and
intent.
9.7 Parties In Interest. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns. This Agreement shall not be assigned by either party hereto without the
written consent of the other party hereto which shall not be unreasonably
withheld or delayed, provided, however, that either party to this Agreement may
assign this Agreement to an affiliate of such party, and affiliates of such
party may further assign the Agreement to other affiliates of such party,
without the consent (written or verbal) of the other party to this Agreement.
Any party or affiliate of such party that assigns this Agreement shall agree in
solido to perform and discharge all obligations of the assignee hereunder.
Additionally, if a party assigns this Agreement to an affiliate and such
affiliate ceases to be an affiliate of the assignor, the person that ceases to
be an affiliate of the assignor shall reassign this Agreement to such assignor
effective as of the date that such affiliation terminated. It is understood that
for purposes of clarification and without expanding or contracting the rights of
the parties set forth above, that while no party shall withhold its consent
unreasonably, each party may, in giving or withholding its consent, consider any
legitimate material business reason under the circumstances at the time of the
proposed assignment (including the terms of the assignment), the capitalization
of the assignee and the experience of the assignee in the business taking into
account, among other things, the relative
23
experience of the assignee's management, employees, agents and advisors. Nothing
in this Agreement is intended or shall be construed to confer upon or to give
any person other than the parties hereto and their successors and assigns any
rights or remedies under or by reason of this Agreement.
9.8 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed to be an original, and such counterparts shall
constitute but one agreement.
9.9 Quality Control. Seller will use its best efforts to maintain its
quality certification under the ISO 9002 standard during the term of this
Agreement. Seller agrees to continue its participation in Buyer's Supplier
Excellence Quality Program.
9.10 Approval. Buyer and Century are entering into this Agreement in
reliance on the representation of Seller that for purposes of the Chapter 11
Case of Seller filed on February 12, 2002, (i) this Agreement is within the
ordinary course of business of Seller, (ii) all necessary corporate approvals
and authorizations have been obtained and are valid, (iii) no specific
bankruptcy court authorization or approval is required for Seller to enter into
this Agreement or perform its obligations under this Agreement and (iv) this
Agreement will be binding and effective as a post petition obligation of Seller.
9.11 Confidentiality. Each party agrees that it will not disclose to
competitors of the other party the terms and conditions of this Agreement
without the prior written consent of such other party. The provisions of this
Section 9.11 shall terminate upon the date of the termination of this Agreement.
9.12 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York (without regard to
applicable principles of conflict of
24
laws). 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 hereto have caused this Agreement to be
duly executed on the date and year first above written.
XXXXXX ALUMINUM & CHEMICAL CORPORATION
By /s/ Xxxx X. Xxxxxxx
------------------------------------
Its President and Chief Executive
Officer
CENTURY ALUMINUM OF KENTUCKY LLC
By /s/ Xxxxxx X. Kitchen
------------------------------------
Its Vice President/Manager
CENTURY ALUMINUM COMPANY, as guarantor
solely for purposes of Sections 3.4 and
3.5 of this Agreement
By /s/ Xxxxxx X. Kitchen
------------------------------------
Its Executive Vice President
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Exhibit A: Gramercy Specifications
26
