SHARED SERVICES AGREEMENT
AGREEMENT ("Agreement"), made this 2nd day of April, 2001 by and between
Century Aluminum Company ("Century"), NSA, Ltd. ("NSA"), Glencore Acquisition I
LLC ("GAC" and, together with NSA, collectively, the "Smelter Site Owner") and
Southwire Company ("Southwire").
BACKGROUND
A. Southwire, through various entities, owns and operates a reduction
facility, a cast house, and related assets and property in Hawesville, Kentucky
(collectively, the "Smelter Site").
B. Southwire owns and operates a rod and cable mill, and related assets and
property (collectively, "SCKP"; each of the Smelter Site and SCKP hereinafter
sometimes referred to as a "Site"), adjacent to the Smelter Site;
C. The Smelter Site and SCKP have heretofore been operated by Southwire as
an integrated facility;
D. Century and Southwire have entered into a Stock Purchase Agreement dated
August 31, 2000 (the "Stock Purchase Agreement"), pursuant to which Century will
acquire the entities which own the Smelter Site, including NSA, and all assets
comprising such Site;
E. Century and Glencore AG ("Glencore") have entered into an Asset Purchase
Agreement dated as of the date hereof pursuant to which GAC, a wholly-owned
subsidiary of Glencore, will acquire certain assets comprising part of the
Smelter Site;
E. There are certain services, facilities and related physical assets that
the parties desire to be shared between the two Sites.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties do hereby agree as follows:
1. Division of Premises. Pursuant to the Stock Purchase Agreement, Century
and Southwire have agreed to divide the Hawesville Complex as shown on the plat
of survey entitled "Southwire Company, located at 0000 Xxxxx Xxxxx 000X, Xxxx xx
Xxxxxxxxxx, Xxxxxxxx", dated March 8, 2001, prepared by HRG PLLC, which has been
recorded in Cabinet B, Slide 145 of the Office of the Xxxxxxx County Registry of
Deeds. A reduced photocopy of such plat is attached hereto as Exhibit A.
Pursuant to the Stock Purchase Agreement, Southwire has taken such action as is
necessary (a) to divide the Hawesville Complex such that at the closing under
the Stock Purchase Agreement both Sites are in compliance with existing zoning,
land use, environmental and similar laws and regulations and (b) to obtain such
permits and variances as are necessary to accomplish such division.
2. Shared Services. Set forth in Exhibit B hereto is a description of
facilities that will be utilized and shared by each of the Smelter Site Owner
and Southwire (each a "Facility") in the normal course of operations, and the
services (each a "Shared Service") to be provided by Southwire or the Smelter
Site Owner, as owner of a Facility, to Southwire or the Smelter Site Owner, as
the case may be, with respect to such Facility. Each party shall provide the
Shared Services identified in Exhibit B as being provided by such party to the
other party in accordance with the terms and provisions of this Agreement. All
references to a providing party shall mean the party providing a Shared Service
to the other party, and all references to a recipient party shall mean the party
receiving a Shared Service from the providing party. Exhibit B describes the
Facilities, Shared Services and the allocations of responsibilities and costs
agreed with respect thereto. Exhibit B is incorporated herein in its entirety
and made a part of this Agreement, and all references to this Agreement shall
include Exhibit B.
3. Standards; Level of Services; Limitation. Unless otherwise expressly
provided in this Agreement:
(a) A party obligated to provide a Shared Service under this Agreement
shall do so using standards of care and levels and manner of performance
consistent with its normal operating procedures. All Facilities to be operated
by either party shall be operated so as not to unduly discriminate against the
other party hereto.
(b) All costs and expenses of operating and maintaining a Facility shall be
paid by the party owning that Facility, subject to allocations and
reimbursements as provided herein.
(c) The providing party shall not be required to perform services hereunder
that conflict with any applicable Legal Requirement.
(d) The recipient party shall provide timely decisions and reasonable
written policy guidelines as required for the performance of Shared Services by
the providing party.
(e) No party shall permit the whole or any portion of a Facility owned by
the other party to be occupied or utilized by any other person or entity, other
than the first party's officers, directors, employees and authorized agents
engaged in the performance of their duties in the ordinary course of business
and operation of such other party's Site.
4. Payment.
(a) Except as otherwise specifically provided herein or in Exhibit B, a
recipient of a Shared Service shall pay therefor an amount equal to the
providing party's Direct Costs for providing such Shared Service. For purposes
of this Agreement, "Direct Costs" shall include, without limitation, (i) wages
and employee benefits of personnel that are providing the Shared Service, (ii)
supply, maintenance, repair and other expenses of the providing party incurred
in providing the Shared Service, (iii) any and all other costs directly related
to the operation and maintenance of the relevant Facility and the provision of
the Shared Service, and (iv) a reasonable capital charge for replacement of
facilities or equipment related to the Facility used in providing a Shared
Service; provided, however, the recipient shall not have any duty or
responsibility to pay new capital charges for replacement of facilities or
equipment related to the Facility used in providing a Shared Service that are
incurred after providing written notification to terminate a Shared Service
pursuant to Section 5(a).
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(b) Except as otherwise specified herein, Direct Costs shall be allocated
to the recipient of the Shared Service pro rata to such recipient's actual usage
of such Shared Service.
(c) Except as otherwise specified in Exhibit B, each party shall provide to
the other a monthly statement for amounts due for Shared Services for the
immediately preceding calendar month, setting forth in reasonable detail the
services provided and the Direct Costs thereof. The recipient shall pay the
provider the invoiced amount in immediately available funds within fifteen (15)
days after delivery of the invoice. Payments due on a day other than a business
day shall be made on the next succeeding business day. Amounts due from
Southwire to the Smelter Site Owner, and from the Smelter Site Owner to
Southwire, hereunder may be netted or set off one against the other. Interest
shall accrue and be payable on any overdue amount payable hereunder at a rate
equal to one and one-half percent (1 1/2%) per month, prorated for the number of
days such overdue amount is outstanding.
(d) If an error is made in the calculation of any amount payable by the
recipient under this Agreement, the invoice to such recipient for the month
immediately succeeding the month in which such error was finally determined
shall be increased or decreased by an amount equal to the amount of such
overpayment or underpayment, as the case may be.
(e) Notwithstanding the provisions of Section 9 hereof, if a party disputes
the amount of any charge, it shall pay the undisputed amounts within the payment
terms provided for in paragraph (c) above and shall set forth in writing those
amounts to which it objects with a reasonably detailed explanation of the basis
for its objections. The parties shall act in good faith to promptly resolve any
such disputes. Any such dispute not so resolved shall be subject to the
provisions of Section 9 hereof.
(f) Each party shall provide the other with such information as the other
may reasonably request to review and confirm the accuracy of the monthly
statements provided under Section 4(c) above.
(g) The recipient shall pay to the provider for each Shared Service that is
the subject of any sales or use tax imposed by any Governmental Body (as defined
in Section 14), within fifteen (15) days after demand therefor, an amount equal
to the recipient's pro rata portion of the aggregate amount of such sales or use
tax. Notwithstanding the foregoing, the recipient shall use reasonable efforts
to provide exemption certificates where available and to calculate any
applicable sales or use tax and to make payment thereof directly to the
appropriate taxing authority.
(h) During the first full calendar year of the term of this Agreement,
representatives of the parties shall meet quarterly to discuss the price and
level of service of each Shared Service.
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5. Term and Termination.
(a) Unless otherwise provided herein with respect to a specific Shared
Service, this Agreement shall have a term of five (5) years commencing on the
date hereof with respect to each Shared Service. Either party may extend the
term of this Agreement for one (1) additional term of five (5) years with
respect to any specific Shared Service, upon notice thereof to the other given
not less than sixty (60) days' prior to the expiration of the initial term.
(b) Unless otherwise provided herein with respect to a specific Shared
Service, the recipient of a Shared Service may, at any time, terminate this
Agreement as to such Shared Service on not less than one hundred twenty (120)
days' prior written notice to the providing party.
(c) This Agreement may be terminated with respect to any specific Shared
Service by the provider thereof, if the recipient thereof shall fail to pay to
the provider the amount due to the provider hereunder with respect to the Shared
Service in question, when the same becomes due and payable under this Agreement,
and any such failure shall remain unremedied for a period of thirty (30) days
after notice thereof shall have been given by the provider to the recipient.
(d) The foregoing termination rights set forth in Section 5(c) shall be in
addition to all other rights and remedies that the non-breaching party may have
against the breaching party with respect to such Shared Service under this
Agreement.
(e) Upon the discontinuation or termination of a Shared Service hereunder,
this Agreement shall be of no further force and effect with respect to such
Shared Service except as to obligations accrued prior to the date of
discontinuation or termination.
6. Force Majeure.
(a) Except to the extent caused by the negligence, recklessness or willful
misconduct of the party asserting Force Majeure (as defined below), the
providing party shall be excused from liability for failure to provide, and the
recipient party shall be excused from liability for failure to receive, one or
more Shared Services, pursuant to this Agreement when such failure is due to
acts of God or the elements of weather, fire, war, civil commotion, labor
disputes, act of civil or military authority, Governmental Order or request,
interruption of electrical supply or supply of raw materials, breakdown of key
equipment at the respective Facilities or other like or unlike causes beyond
such party's reasonable control, as applicable (any such event a "Force
Majeure"); provided, however, that: (i) such suspension shall relate solely to
that portion of the Shared Services that the party seeking to rely on such event
of Force Majeure is unable to provide or receive, as the case may be, and (ii)
such suspension shall be in effect only for the period during which such event
of Force Majeure shall be continuing. If such event of Force Majeure results in
a partial rather than a total inability on the part of the provider to provide
or the recipient to receive the Shared Service, the recipient or the provider,
respectively, shall be entitled to receive or provide the pro rata portion of
any available quantity or level of such Shared Service. If a party's performance
is affected, or may be affected, by Force Majeure, that party shall give notice
thereof to the other party as soon as practicable after the occurrence of such
Force Majeure, which notice shall include, insofar as known, a statement of the
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probable extent to which the affected party will be unable to perform or will be
delayed in performing its obligations hereunder, provided that any failure to
provide such notice shall not affect the right of the party claiming such event
except to the extent that the other party has suffered actual prejudice thereby.
Each party shall exercise due diligence to eliminate or remedy any such Force
Majeure and to prevent the same from unnecessarily delaying and interrupting its
performance hereunder and shall give the other party prompt written notice when
such Force Majeure causes shall have been eliminated or remedied.
(b) Upon the occurrence and during the continuance of an event of Force
Majeure, the recipient of a Shared Service which is affected by such event of
Force Majeure shall be entitled to obtain substitute services or facilities on a
temporary basis. If an event of Force Majeure continues for more than sixty (60)
days, the recipient may elect to obtain any substitute service or facility on a
permanent basis and upon such election the obligations of the providing party
shall cease.
7. Temporary Suspension of Shared Services for Repairs and Improvements.
(a) To allow the party that owns a Facility and provides a Shared Service
to maintain and/or make repairs or improvements to the Facility, such party may
elect to reduce, interrupt, allocate, alter or change (each activity a "Change")
the relevant Shared Services that it provides under this Agreement, provided
that the party desiring to make the Change shall give reasonable notice of such
action, describing such Change and the reasons therefor, to the other party,
pursuant to Section 13(h) hereof; provided that if such Change to a Shared
Service is reasonably likely to increase the costs of such Shared Service by
more than ten percent (10%), such notice shall be given at least seventy-five
(75) days prior to the implementation of such Change.
(b) Except as the parties may otherwise agree in writing, a party that
desires to undertake a Change shall pay the costs associated with effecting the
Change, which shall be subject to the allocations and reimbursements provided
for herein. Upon the occurrence and during the continuance of any Change
referred to in this Section 7, the parties shall cooperate to attempt to arrange
for Shared Services to be furnished in an alternate manner and to minimize or
reduce the effect on their operations of such Change of a Shared Service in
conformity with Section 3(a) hereof; provided, however, that to the extent a
Shared Service is reduced by a Change, the recipient party shall be entitled to
receive a pro rata portion of any available quantity or level of such reduced
Shared Service, and an appropriate reduction in the charge to the recipient
party for such reduced Shared Services shall be made.
8. Additional Covenants.
(a) Inspection, Access and Testing. At scheduled times and intervals to be
agreed upon by the parties, each of Century and Southwire shall:
(i) permit either the recipient party or, at such other party's option,
independent public accountants mutually acceptable to the parties, to inspect
the books and records of the providing party relating to the Shared Services
furnished pursuant to this Agreement, provided that such inspection and audit
shall be conducted for the sole purpose of determining whether the costs charged
have been assessed in accordance with the terms of this Agreement, and the cost
of such inspection shall be borne by the requesting party; and
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(ii) permit the recipient party or any of its agents or representatives to
visit its Site in order to: (A) consult with those agents of the providing party
designated by such party regarding Shared Services to be provided hereunder, and
(B) require that meter calibration and/or other tests be conducted to verify the
accuracy of equipment used to determine the quantity or quality of Shared
Services provided hereunder, provided that: (x) the recipient party shall not be
entitled to require meter calibration and/or other tests permitted by clause (B)
above any more frequently than every ninety (90) days; (y) each party shall
cause its employees, agents and representatives to comply with all of the other
party's rules and regulations pertaining to security, safety and property
protection and follow the route or routes designated by such party and (z) the
recipient party or its agents must provide not less than twenty-four (24) hours'
advance notice to the providing party and all employees of the recipient party
must be accompanied by a supervisor.
(b) Books and Records. Each party shall keep proper books and records of
account, in which full and correct entries shall be made of all financial
transactions related to Shared Services and the performance of its obligations
under this Agreement, including, without limitation, recording the levels or
quantities of Shared Services provided by or on behalf of that party to the
other party under this Agreement, the costs and expenses associated therewith
and amounts paid by or on behalf of such party.
9. Dispute Resolution.
(a) In the event that any dispute, claim or controversy shall arise as to
whether either party hereto shall have fulfilled its obligations under this
Agreement, the parties agree that within five (5) days after notification
thereof authorized representatives of the parties shall meet to resolve such
dispute, claim or controversy. If, within ten (10) days after the authorized
representatives first begin such meetings the parties have not agreed on a
resolution, a Southwire representative and a Century representative (other than,
in the case of each party, the aforementioned authorized representatives) shall
meet within five (5) days to resolve such dispute, claim or controversy. If,
within ten (10) days after such designated representatives first begin such
meetings, the parties have not reached agreement, the dispute, claim or
controversy shall be determined in the manner set forth in Section 9(b) hereof.
(b) If, within five (5) business days after the date referred to in the
last sentence of Section 9(a) hereof the dispute, claim or controversy in
question remains unresolved, such dispute, claim or controversy shall be
determined by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association. The number of arbitrators to be appointed
in accordance with such rules shall be three (3), one of who shall be a
practicing attorney, and the arbitration shall take place in Hawesville,
Kentucky. Any award or decision rendered by such arbitrators shall be final and
binding on the parties and nonappealable. Judgment upon any award or decision
rendered by such arbitrators may be entered in any court of competent
jurisdiction. Any costs of the proceedings described in this Section 9(b) shall
be shared equally by the parties.
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10. Liability Generally. Neither party shall be responsible for special or
consequential or incidental damages (including lost profits) of the other party,
or for punitive damages awarded against the other party, based upon or arising
out of such party's performance or non-performance of this Agreement, provided
that nothing herein shall limit a party's liability for damages (other than the
exclusion of special, consequential or incidental damages), including costs of
repair and remediation, to its or the other party's Site.
11. Indemnification.
(a) Subject to the limitations set forth in Section 10 and Sections 11(c)
and (d) below, Century and the Smelter Site Owner hereby agrees to indemnify,
hold harmless and defend Southwire and Southwire's Affiliates against and in
respect of any and all Losses (including reasonable attorneys' fees and
litigation expenses) incurred by Southwire and Southwire's Affiliates caused by
or arising solely from (i) acts of the Smelter Site Owner in connection with the
performance of (or failure to perform) any of the Smelter Site Owner's
obligations under this Agreement that constitute negligence, recklessness or
willful misconduct of the Smelter Site Owner and (ii) any condition, event or
act caused or contributed to by the Smelter Site Owner at or affecting a
Facility owned by Southwire.
(b) Subject to the limitations set forth in Section 10 and Sections 11(c)
and (d) below, Southwire hereby agrees to indemnify, hold harmless and defend
NSA and GAC and NSA's and GAC's Affiliates against and in respect of any and all
Losses (including reasonable attorneys' fees and litigation expenses) incurred
by NSA or GAC and NSA's or GAC's Affiliates caused by or arising solely from (i)
acts of Southwire in connection with the performance of (or failure to perform)
any of Southwire's obligations under this Agreement that would constitute
negligence, recklessness or willful misconduct of Southwire and (ii) any
condition, event or act caused or contributed to by Southwire at or affecting a
Facility owned by the Smelter Site Owner.
(c) A party seeking indemnification pursuant to this Section 11 (the
"Indemnified Party") shall give prompt notice to the party from whom such
indemnification is sought (the "Indemnifying Party") of the assertion of any
claim, or the commencement of any action, suit or proceeding, in respect of
which indemnity may be sought hereunder, and will give the Indemnifying Party
such information with respect thereto as the Indemnifying Party may reasonably
request, but failure to give such notice shall not relieve the Indemnifying
Party of any liability hereunder, except to the extent that the Indemnifying
Party has suffered actual prejudice thereby. The Indemnifying Party shall have
the right to undertake the defense of any such claim asserted by a third party
and the Indemnified Party shall cooperate in such defense and make available all
records and materials requested by the Indemnifying Party in connection
therewith at the Indemnifying Party's expense. The Indemnified Party shall be
entitled to participate in such defense, but shall not be entitled to
indemnification with respect to the costs and expenses of such defense if the
Indemnifying Party shall have assumed the defense of the claim with counsel
reasonably satisfactory to the Indemnified Party. The Indemnifying Party shall
not be liable for any claim settled without its consent, which consent shall not
be unreasonably withheld or delayed. The Indemnifying Party may settle and claim
without the consent of the Indemnified Party, but only if the settlement
involves solely monetary damages.
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(d) No owner of a Site shall be responsible for Losses suffered by the
other party or its Affiliates or their officers, directors, employees or agents
arising out of or in connection with Shared Services provided on such owner's
Site, except to the extent (but subject to Section 10) such Losses resulted
solely from the gross negligence, recklessness or willful misconduct of the
owner of such Site.
12. Insurance. Each Party agrees that it shall maintain during the Term of
this Agreement insurance policies consistent with good business practices in the
industry, including but not limited to, general liability insurance, product
liability insurance, workers' compensation insurance and motor vehicle or motor
driven equipment liability insurance.
13. Miscellaneous.
(a) Assignment. Either party may assign this Agreement to any Affiliate of
such party for so long as the assignee remains an Affiliate of such party and
provided that the assignor (and Century, if the Smelter Site Owner is the
assignor) shall unconditionally guarantee all obligations of the assignee
hereunder. The parties agree that, (i) in the case of a direct or indirect sale
of all or substantially all the assets of the business conducted by the Smelter
Site Owner at the Smelter Site to a non-Affiliate of either of NSA or GAC, as
the case may be, NSA and GAC shall assign all their rights and obligations
hereunder to the purchaser of such assets and such purchaser shall assume all
such rights and obligations and NSA and GAC shall have no further rights or
obligations hereunder, and (ii) in the case of a direct or indirect sale of all
or substantially all the assets of the business conducted by Southwire at SCKP
to a non-Affiliate of Southwire, Southwire shall assign all of its rights and
obligations hereunder to the purchaser of such assets and the purchaser shall
assume all such rights and obligations and Southwire shall have no further
rights or obligations hereunder. Except for the foregoing permitted assignments,
neither party shall assign this Agreement or any of its rights hereunder without
the prior written consent of the other party, which consent shall not be
unreasonably withheld. In the event of a merger between either party and a third
party, the party entering into such merger shall cause the surviving party (if
other than the party hereto) of such merger to unconditionally assume all the
rights and obligations hereunder of the party hereto entering into such merger.
(b) Non-Waiver. No failure or delay on the part of either Southwire or the
Smelter Site Owner in exercising any right hereunder will operate as a waiver
of, or impair any such right. No single or partial exercise of any such right
will preclude any other or further exercise thereof or the exercise of any other
right. No waiver of any such right will have effect unless given in a written
document, with specific reference to the relevant provision(s) of this
Agreement, which is signed by a duly authorized representative of the party
granting the waiver. No waiver of any such right will be deemed a waiver of any
other right hereunder.
(c) Severability. If any provision of this Agreement is held to be illegal,
void, invalid, ineffective or unenforceable by a competent authority, such
determination will not affect the validity or enforceability of any other
provision(s) of this Agreement which will remain in full force and effect. If
any of the terms or provisions of this Agreement are in conflict with any
applicable statute or rule of law, then such terms or provisions will be deemed
inoperative to the extent that they may conflict therewith and will be deemed to
be modified to conform with such statute or rule of law.
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(d) Counterparts. This Agreement and any amendments hereto may be executed
in any number of counterparts, each of which will be deemed an original, but all
of which together will constitute one and same instrument. Each counterpart may
consist of a number of copies thereof each signed by less than all, but together
signed by all, of the parties. In pleading or proving any provision of this
Agreement, it will not be necessary to produce more than one such counterpart.
(e) Independent Contractor. In all activities under this Agreement, the
parties will act as and be deemed independent contractors with respect to one
another with no authorization to any way obligate or bind the other party.
Accordingly, neither party will hold itself out to third parties as purporting
to act on behalf of, or serving as the agent of, the other. Neither party is
authorized to enter into any understandings or agreements, whether oral or
written, on the other party's behalf without the prior written consent of such
other party. This Agreement will not be deemed held or construed as creating a
partnership, joint venture, or any other form of association between Southwire
and the Smelter Site Owner for any purpose whatsoever, except as expressly
provided in this Agreement.
(f) No Lease, Conveyance. Except as specifically provided in this
Agreement, this Agreement does not and shall not be deemed to constitute a lease
or a conveyance of any real property or premises, or to confer upon any party
any right, title, estate or interest in the other party's Site or any part
thereof, including any equipment or other assets.
(g) Governing Law. This Agreement will be governed by and construed under
the laws of the State of Delaware without regard to its principles pertaining to
conflict of laws. Any suit or other action seeking to enforce any provision of,
or based upon any right arising out of, in connection with, or in any way
relating to, this Agreement shall be brought only in the United States Courts
sitting in the State of Delaware, unless such court shall not have jurisdiction
over the parties or the claims asserted in such action. Each party hereby
irrevocably consents and submits to the jurisdiction and venue of such court and
irrevocably waives any objection which it may now or hereafter have to the
laying of the venue of any suit or action brought in such court and any claim
that such suit or action brought in such court has been brought in an
inconvenient forum.
(h) Headings. The headings used in this Agreement are intended for guidance
only and will not be considered part of the written understanding between the
parties.
(i) Notices. Any notice or request to be given or furnished under this
Agreement by any party to another party will be in writing and will be delivered
personally or sent via prepaid certified mail, or by prepaid overnight delivery
service, at the addresses listed below. A notice or request will be deemed to be
given (a) when delivered personally, or (b) if sent by certified mail or
overnight delivery service, at the time of delivery as indicated on the duly
completed U.S. Postal Service return receipt or at the time of package pickup as
indicated on the records of or certificates provided by the overnight delivery
service.
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If to the Smelter Site Owner, addressed to:
Century Aluminum Company
0000 Xxxxxx Xxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Kitchen, Esq.
Executive Vice President, General Counsel
and Chief Administrative Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to the manager of the Smelter Site.
If to Southwire, addressed to:
Southwire Company
Xxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Director of Operations,
Wire and Cable Division
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to the Office of the General Counsel, Southwire Company.
or to such other place and with such other copies as such party may designate as
to itself by written notice to the others.
(j) Entire Agreement. This Agreement constitutes the entire Agreement
between the parties with respect to the subject matter addressed herein and
hereby supersedes all prior understandings and agreements, whether oral or
written, between the parties with respect thereto. Any amendment to, or release
from, any provisions set forth in this Agreement must be in writing, signed by
the parties, and specifically state that it is an amendment or release.
(k) Waiver of Jury Trial. Each party hereby irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Agreement or the
actions of any party in the negotiation, administration, performance and
enforcement thereof.
(l) Survival. Without prejudice to the survival of the other agreements of
the parties hereunder, the agreements of the parties pursuant to Sections 4, 10,
and 11 hereof shall survive the termination of this Agreement.
(m) Further Assurances. From time to time, each party agrees to execute and
deliver such additional documents and to provide such additional information and
assistance as the other party shall reasonably require in order to carry out the
terms of this Agreement.
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(n) Regulations. All employees of each party when on the property of the
other party in connection with this Agreement and the easements to be granted
pursuant hereto and the services to be provided hereunder will conform to the
rules and regulations concerning health, safety and security of such other party
with respect to its Site.
(o) Authority. If a party signs as a corporation, partnership, or other
entity, each of the persons executing this Agreement, on behalf of such party,
does hereby covenant and warrant that such party has full right and authority to
enter into this Agreement, and that the persons signing on behalf of such party
were authorized to do so.
14. Certain Definitions. As used in this Agreement, the following terms
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Exchange Act.
"Governmental Body" means any federal, state, local, municipal, foreign or
other governmental or quasi-governmental entity or authority of any nature,
including without limitation any court or other tribunal.
"Governmental Order" means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
"Legal Requirement" means any United States federal, state, local or
foreign law, statute, ordinance, principle of common law, rule, regulation,
code, order or other requirement of a Governmental Body.
"Losses" means any and all liabilities, losses, damages, claims, costs,
interests, judgments, fines, amounts paid in settlement and expenses actually
incurred by a party.
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IN WITNESS WHEREOF, the parties hereto have had this Agreement executed by
their respective authorized officers as of the date first written above.
CENTURY ALUMINUM COMPANY
By:_______________________________
Its:______________________________
NSA, LTD.
by METALSCO LTD, its General Partner
By:_______________________________
Its:______________________________
GLENCORE ACQUISITION I LLC
By:_______________________________
Its:______________________________
SOUTHWIRE COMPANY
By:_______________________________
Its:______________________________
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EXHIBITS
A - Site Plan
B - Description of Shared Services
EXHIBIT A
Site Plan
EXHIBIT B
1. Electric Power
a) Electric Service Participation Agreement- The Smelter Site Owner
shall provide electric power to SCKP pursuant to the Electric Service
Participation Agreement of even date herewith. The Electric Service
Participation Agreement will also provide for a maximum limit on the amount
of electric power to be provided to and paid for by Southwire. In the event
of any inconsistency between the provisions of the Electric Service
Participation Agreement and this Agreement, the provisions of the Electric
Service Participation Agreement shall govern.
b) Description of Facilities and Property- Electric power is delivered
to the substation on the North side of the Smelter Site by five power lines
from a coal-fired plant on the adjacent property to the North. Electric
power is supplied to SCKP through two underground power lines that extend
from the substation on the Smelter Site along the East side of the potlines
to the new property line of SCKP. The Smelter Site does not manage the load
of SCKP. The Smelter Site and SCKP each have separate meters. The SCKP
meter is located on the Smelter Site in an electrical substation panel.
c) Ownership and Maintenance- The Smelter Site Owner shall own the
substation on the North side of the Smelter Site. The Smelter Site Owner
shall maintain the overhead lines from the utility into the substation.
Southwire shall own and maintain the 15 kV underground power lines which
serve SCKP. These 15 kV underground power lines extend from the meter base
at the Smelter Site Owner switchgear to the SCKP property line.
d) Rights of Access- The Smelter Site Owner shall grant to Southwire
an easement for the two underground power lines from the meter base at the
Smelter Site Owner Switchgear to the new property line of the SCKP and such
rights of access as may be necessary for the maintenance, repair and
replacement of such power lines. The Smelter Site Owner hereby grants
Southwire such rights of access as may be necessary for Southwire to read
the SCKP meters. The Smelter Site Owner and Southwire shall grant to the
electricity provider to the Hawesville Complex such rights of ingress to or
egress from their respective properties as is reasonably necessary in order
for the parties to obtain electric power as contemplated hereunder and to
carry out their respective responsibilities for the installation,
operation, maintenance, testing or replacement of electrical power
facilities.
2. Water
a) Process Water; Fire Water- There are three xxxxx on the Smelter
Site which connect to a process water treatment plant located on the
Smelter Site between the cast house and the potlines. An 8-inch process
water loop and a 10-inch fire water loop presently extend from the
treatment plant around the Smelter Site. SCKP ties in to the process water
loop and the fire water loop near its property line. Southwire shall
maintain the underground process water and fire water pipes from SCKP to
the respective points of tie-in. The fire water loop is not metered. The
Smelter Site Owner shall permit Southwire to retain its existing tie-in to
the fire water loop at no charge and the Smelter Site Owner shall not be
liable for any failure of the fire water loop system. The process water
loop is metered, but the existing meter is not functioning. The Smelter
Site Owner shall install a new meter for the process water loop, the cost
of which shall be shared equally by the Smelter Site Owner and Southwire.
b) Sanitary Waste Water- There is a sanitary wastewater treatment
facility on the Smelter Site that services both the Smelter Site and SCKP.
An underground line connects SCKP to the wastewater treatment plant.
Treated water is discharged through the 003 outfall on the Smelter Site.
The Smelter Site Owner will own, operate and maintain the wastewater
treatment facility. There are no meters within the wastewater treatment
loop. The Smelter Site Owner and Southwire shall share the Direct Costs of
the wastewater treatment facility in proportion to their respective water
usage as measured by the local county's water meters to the respective
Sites.
c) Payment- The Smelter Site Owner shall charge Southwire a flat
monthly fee in the amount of $3,457 payable monthly in arrears until the
new meter is installed and thereafter shall charge Southwire for the use of
process water based on Southwire's metered usage in gallons. The $ per
gallon charge rate will be equal to the annual Direct Costs of operating
and maintaining the process water system divided by the total gallons of
water processed by the Smelter Site for the preceding year.
3. Fuel Oil
a) There is a 150,000-gallon fuel oil storage tank located at the
south end of the Smelter Site that supplies backup fuel oil to the cast
furnaces of both the Smelter Site and SCKP. Spillage dikes surround the
fuel oil storage tank. There is a pump station and meter located next to
the fuel tank with an underground pipe that connects to SCKP. The Smelter
Site does not utilize the pump station or the meter. Southwire shall own
and maintain the pump station, meter and underground pipe at its sole cost
and shall be solely responsible for any clean-up costs associated
therewith. The Smelter Site Owner shall permit Southwire to access the pump
station , meter and underground pipe for maintenance purposes. The Smelter
Site Owner shall own and maintain the fuel oil storage tank and spillage
dikes and charge Southwire for its proportionate share of Direct Costs
based on quantity of fuel oil used. The Smelter Site Owner shall be solely
responsible for any clean-up costs associated with the fuel oil storage
tank and spillage dikes for events occurring after the date hereof.
Southwire shall have the right to purchase up to 35,000 gallons of fuel oil
per day.
b) Payment- The Smelter Site Owner shall purchase an initial supply of
backup fuel oil and charge Southwire for 35,000 gallons of the fuel oil in
storage. Thereafter, the Smelter Site Owner shall charge Southwire for fuel
oil as used by Southwire.
4. Dross Storage; Dross Loading; Dust Waste
SCKP has three covered bays for dross storage. Southwire shall permit the
Smelter Site Owner to use one of the dross storage bays at SCKP for up to 18
months after the date hereof. The loading area abuts the dross storage bays at
SCKP. In consideration for its use of the storage bay at SCKP, the Smelter Site
Owner shall provide the front loader to load Southwire's dross onto trucks
approximately three times per week at no charge. Loading rates after the Smelter
Site Owner is no longer a recipient of this Shared Service will be negotiated at
B-2
the same time equipment rental rates are negotiated in 11 below. The loading
area has a bag house system to collect fugitive dust from the storage and
loading process. Southwire shall own, operate and maintain at its expense the
bag house, dross loading and dross storage facilities. The Smelter Site Owner
agrees to leave the dross bay the Smelter Site is currently using, in the same
condition as exists as of the date hereof when it terminates its use of the
dross storage bay.
The parties acknowledge that waste, which is sent from the dust waste
facility for off-site disposal is subject to a State-approved waste profile and
related conditions set forth by the State pursuant to the waste profile. The
parties agree that (i) only those wastes consistent with the State-approved
waste profile and related conditions will be sent to the dust waste facility,
and (ii) the parties will confer and cooperate in filing future waste profiles
relating to the dust waste facility.
5. Railroad
CSX owns the rail line that services the Hawesville Complex. CSX owns the
line to a point within the Smelter Site. CSX also owns a separate section of
side track located on the Smelter Site. The rail line runs across the Smelter
Site and connects to SCKP at the new property line. A rehabilitation agreement
will be negotiated among CSX, Southwire and other parties.
6. Drainage Ditch
SCKP shall not discharge process water into the main drainage ditch that
runs South to North on the East side of the Smelter Site to the north property
line of the Smelter Site (the "Ditch"). If SCKP discharges any storm water into
the Ditch, Southwire shall periodically sample its discharge into the Ditch as
required by applicable law, and Southwire shall be responsible for and shall
hold the Smelter Site Owner harmless from any legal obligation caused by such
SCKP discharge.
7. Family Medical Center
There is a contract medical service located on the Smelter Site that
provides clinical services to the employees and their dependents employed at the
Smelter Site and SCKP (the "Family Medical Center"). For a period of up to 3
years from the date hereof, the Smelter Site Owner shall permit Southwire
employees employed at SCKP, their dependents and retirees (covered under the
Southwire Medical Benefit Plan) to access and utilize the services of the Family
Medical Center. The Smelter Site Owner shall charge Southwire a monthly fee in
the amount of $7,000, payable in advance, to cover Southwire's prorated share of
the Direct Costs based on usage of the Family Medical Center. The Smelter Site
Owner will reconcile amounts paid by Southwire quarterly to Southwire's actual
prorated share of the Direct Costs of the Family Medical Center. Any payment or
credit adjustment necessary to reconcile the account will be made on the next
billing cycle. In addition to its obligations under section 11(b), subject to
Section 10, Southwire agrees to indemnify and hold harmless the Smelter Site
Owner and any Affiliates of NSA or GAC against and in respect of all Losses
(including reasonable attorneys' fees and litigation expenses) incurred by the
Smelter Site Owner or any Affiliate of NSA or GAC arising out of the Smelter
Site Owner providing the services described in Paragraphs 8 and 9 of this
Schedule B, except where such Losses were caused by the willful misconduct,
recklessness or negligence of the Smelter Site Owner or an Affiliate of NSA or
GAC.
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8. First Aid Service
There is a first aid service located on the Smelter Site adjacent to the
Family Medical Center. For a period of up to 3 years from the date hereof, the
Smelter Site Owner shall permit SCKP employees to access and utilize the first
aid service. The Smelter Site Owner shall charge Southwire a monthly fee in the
amount of $300 payable in advance, which shall be subject to an annual
adjustment payment at year-end to allocate Direct Costs of the first aid service
according to respective usage during the year.
9. Machine Shop Services
After the Closing, the Smelter Site Owner shall use reasonable efforts to
accommodate Southwire in emergency situations by permitting Southwire to use the
services of the machine shop. The Smelter Site Owner shall charge Southwire for
the use of the machine shop's services based on Direct Costs according to usage.
10. Equipment
After the Closing, the Smelter Site Owner shall permit Southwire to use
certain of the Smelter Site Owner's mobile equipment (e.g., loaders, cranes)
upon request, subject to availability. The Smelter Site Owner shall charge
Southwire an hourly rate for the use of such equipment based on the rate
schedule to be agreed upon annually by the Smelter Site Owner and Southwire
based upon the then current market rates for the use of similar equipment. If a
qualified operator is required from the Smelter Site Owner, the Smelter Site
Owner shall charge Southwire $30 per hour for such operator.
11. Metal Lab Services
The Smelter Site Owner will perform hot metal lab analysis services to
Southwire at the metal analysis lab on the Smelter Site for a charge of $3.50
per sample. The Smelter Site Owner will make reasonable efforts to deliver metal
samples from the point of delivery at SCKP to the Smelter Site's lab, via the
hot metal trucker's return trip to the Hot Metal Scales. Southwire shall
ultimately be responsible for delivery of metal samples to the lab and SCKP
personnel shall be allowed access to the smelter site for such delivery. If a
special standard is needed in order to test any metal sample for Southwire,
Southwire shall reimburse the Smelter Site Owner for the cost of purchasing such
standard. In such an event, Southwire shall own the metal standard. The Smelter
Site Owner shall retain metal samples for Southwire for a period of seven days,
after which the Smelter Site Owner shall have no responsibility for the
retention of such samples. The Smelter Site Owner shall maintain an electronic
data system for delivering analysis results to SCKP.
12. Cafeteria
There is a cafeteria located on the Smelter Site that provides food
services to employees employed at the smelter site and SCKP. For a period of up
to 3 years from the date hereof, the Smelter Site Owner shall permit SCKP
employees access to the cafeteria and use of the food services at no charge to
Southwire. Use of the food services will be provided to employees of SCKP at the
same cost as provided to employees of the Smelter Site.
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13. Transition Services
To the extent permitted by applicable law, Southwire shall make the
following information and administrative services available to the Smelter Site
Owner, for a period of up to 1 year after the date hereof, upon reasonable
request by the Smelter Site Owner giving appropriate consideration to
Southwire's ongoing business requirements:
Payroll
Employee records
Medical benefits administration
Medical center liaison
The parties recognize that Southwire may need professional advice regarding
its ability to perform such services. In the event Southwire shall decide, in
its sole discretion, to seek such advice as a prerequisite to providing any
services to the Smelter Site Owner, Southwire shall notify the Smelter Site
Owner regarding the nature of the services required and the Smelter Site Owner
shall reimburse Southwire for the actual cost of such professional services. In
the event that such professional advice is that Southwire is prohibited from
providing such service, Southwire shall be relieved of any obligation to do so
to the extent prohibited. The Smelter Site Owner and Southwire shall in good
faith agree upon the compensation Southwire shall receive for providing such
services as a condition precedent to Southwire's obligation to do so. The
Smelter Site Owner will indemnify and hold harmless Southwire, its officers,
employees and agents from any cost or expense in performing such services. In
addition to its obligations under Section 11(a), and subject to Section 10, the
Smelter Site Owner agrees to indemnify and hold harmless Southwire, and any
Southwire Affiliate against and in respect of all Losses (including reasonable
attorneys' fees and litigation expenses) incurred by Southwire or a Southwire
Affiliate arising out of Southwire providing any services described in this
Paragraph 14, except where such Losses were caused by the willful misconduct,
recklessness or negligence of Southwire or a Southwire Affiliate.
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