TERMINATION AGREEMENT By and Between GLENCORE LTD. and CENTURY ALUMINUM COMPANY July 7, 2008
Table of Contents
| Page # | ||||
1. Termination By Mutual Consent |
1 | |||
2. Representations & Warranties of Century |
3 | |||
3. Representations & Warranties of Glencore |
4 | |||
4. Public Disclosure |
5 | |||
5. Confidentiality |
5 | |||
6. Further Assurances |
5 | |||
7. Survival of Representations and Warranties |
5 | |||
8. Interpretation |
5 | |||
9. Expenses |
5 | |||
10. Remedies; Specific Performance |
6 | |||
11. Governing Law |
6 | |||
12. Arbitration; Confidentiality |
6 | |||
13. Severability |
6 | |||
14. Amendments; Waivers |
6 | |||
15. Assignments; Successors |
7 | |||
16. Notices |
7 | |||
17. Entire Agreement |
8 | |||
18. Counterparts |
8 | |||
Exhibits:
Exhibit A: 2004 Sale Contract
Exhibit B: 2004 Purchase Contract
Exhibit C: 2005 Sale Contract
Exhibit D: 2005 Purchase Contract
Exhibit E: List of Relevant Individuals for Purposes of “Knowledge” Definition
Exhibit A: 2004 Sale Contract
Exhibit B: 2004 Purchase Contract
Exhibit C: 2005 Sale Contract
Exhibit D: 2005 Purchase Contract
Exhibit E: List of Relevant Individuals for Purposes of “Knowledge” Definition
THIS TERMINATION AGREEMENT is made and entered into as of July 7, 2008 (this
“Agreement”), by and between Glencore Ltd., the United States branch of Glencore AG, a
Swiss corporation (“Glencore”), and Century Aluminum Company, a Delaware corporation
(“Century”).
RECITALS
WHEREAS, the parties entered into certain swap contracts for the sale of primary unalloyed
aluminum ingots (“Ingots”), namely (i) contract no. 000-00-00000.S for the sale of Ingots
by Glencore to Century dated November 22, 2004, attached as Exhibit A hereto (“2004
Sale Contract”), (ii) contract no. 000-00-00000.P for the sale of Ingots by Century to Glencore
dated November 22, 2004, attached as Exhibit B hereto (“2004 Purchase Contract,”
and together with the 2004 Sale Contract, the “2004 Contracts”), (iii) contract no.
000-00-00000.S for the sale of Ingots by Glencore to Century dated June 8, 2005, attached as
Exhibit C hereto (“2005 Sale Contract”), and (iv) contract no. 000-00-00000.P for
the sale of Ingots by Century to Glencore dated June 8, 2005, attached as Exhibit D hereto
(“2005 Purchase Contract,” and together with the 2005 Sale Contract, the “2005
Contracts”; and the 2004 Contracts and the 2005 Contracts, together being the
“Contracts”), pursuant to which net payments are expected to be owed by Century to
Glencore;
WHEREAS, the parties desire to terminate the Contracts;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, intending to be
legally bound hereby, the parties agree as follows:
1. Termination By Mutual Consent.
(a) Subject to Sections 1(b) and 1(c) below, the parties agree to and do hereby terminate the
Contracts, and agree that such termination constitutes a full and final release and discharge of
all obligations respectively owed by them under the Contracts.
(b) The termination of Glencore’s obligations under the Contracts and the release and
discharge of Glencore provided for in Section 1(a) are subject to, and shall be effective only (i)
upon payment on the date of this Agreement by Glencore Investment Pty Ltd (“Glencore Investment”)
of the purchase price (“Purchase Price”) pursuant to that certain Stock Purchase Agreement
entered into as of the date of this Agreement between Century and Glencore Investment (the
“Purchase Agreement”), and (ii) if, as of the date hereof, there is not in effect any
statute, rule, regulation, executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which has the effect of making the transaction contemplated by this
Agreement illegal or otherwise prohibiting or preventing its consummation.
(c) The termination of Century’s obligations under the Contracts and the release and discharge
of Century provided for in Section 1(a) are subject to, and shall be effective only (i) upon
payment by Century to Glencore of the sum of US$1,820,456,792 (“Cash Payment”), which
payment Century agrees to make immediately following receipt of the
Purchase Price, by wire transfer of immediately available funds to the bank account provided
by Glencore, (ii) upon issuance by Century to Glencore Investment of the convertible preferred
stock that is the subject of the Purchase Agreement, and (iii) if, as of the date hereof, there is
not in effect any statute, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which has the effect of making the transaction
contemplated by this Agreement illegal or otherwise prohibiting or preventing its consummation;
provided that US$505,197,592 (the “Deferred Amount”) of the Cash Payment, will be paid on August
31, 2008 (such date, the “Deferred Payment Date”), and otherwise on the terms and conditions set
forth in Section 1(d) below (and the condition in clause (i) above shall apply only in respect of
the amount of the Cash Payment minus the Deferred Amount).
(d) In the event Century fails to pay the Deferred Amount on or prior to the Deferred Payment
Date, Century shall make monthly payments of a minimum of US$25 million on the 1st of each month
(or if not a Business Day (as defined below), the first occurring Business Day thereafter),
commencing September 1, 2008 and continuing until the Deferred Amount is paid in full (each such
date, a “Installment Payment Date”); provided that (i) in any event, Century shall pay all
of the then unpaid Deferred Amount, if any, on December 31, 2009, and (ii) Century shall promptly
apply the net proceeds received from any public or private offering of debt or equity securities
(other than (x) issuances of securities in any business combination transaction or pursuant to
employee benefit plans or arrangements, or (y) to the extent such net proceeds are used to finance
the acquisition of any plant, equipment or other property or to refinance existing indebtedness) to
the prepayment of the unpaid Deferred Amount; and provided, further, that Century may, at any time
prior to or after the Deferred Payment Date, pay the full amount of the then unpaid Deferred
Amount. Century shall provide Glencore prior written notice of each proposed prepayment of the
Deferred Amount (which shall specify the date and the amount of the proposed prepayment). Interest
shall accrue on the Deferred Amount that is unpaid from time to time from and including the date
hereof to, but excluding, the date of payment, at the rate of LIBOR plus 2.50% per annum (based on
a 360 day year), and shall be paid in arrears on August 1, 2008 and thereafter at the time of each
payment of a portion (or all) of the Deferred Amount (including on the Deferred Payment Date).
Upon demand of Glencore, Century shall promptly compensate Glencore for and hold it harmless from
any loss, cost or expense incurred by it as a result of any payment of the Deferred Amount or any
portion thereof on a day other than the Deferred Payment Date or any Installment Payment Date (if
applicable). The Deferred Amount, together with all interest and other amounts due thereon or in
respect thereof, shall be paid by wire transfer of immediately available funds to the bank account
provided by Glencore under Section 1(c) above or such other bank account as is provided by
Glencore. As used in this Section 1(d), the following terms have the indicated meanings:
(i) “Business Day” means any day other than Saturday, Sunday or other day on which commercial
banks in New York, New York are authorized or required by applicable law to close.
(ii) “LIBOR” means (a) with respect to each date on which any portion of the Deferred Amount
is scheduled to be paid and each other date on which interest is payable under this Section 1(d)
(each, a “Payment Date”), the rate quoted at 11:00 am London time on the second Business
Day before the previously occurring Payment Date (which previously occurring
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Payment Date shall be deemed to be July 8, 2008, for purposes of the first interest payment on
August 1, 2008) on the Reuters LIBOR screen page, for deposits in United States dollars for a
one-month period, or (b) if for any reason such rate is not quoted on such screen page at such time
on the date applicable with respect to any Payment Date, the average of the one-month rates offered
to Glencore by three prime banks in London for a United States Dollar deposit in the amount of the
scheduled payment.
(e) Notwithstanding any other provision of this Agreement, the rights and obligations of the
parties to the Contracts with respect to any and all payments owed thereunder for the month of
June 2008 shall remain unaffected, and any and all such payments shall continue to be owing, and
shall be paid, in accordance with the terms and conditions of the Contracts.
(f) The parties agree and acknowledge that for U.S. federal income tax purposes, the amount
paid by Century in respect of the termination of the Contracts is the Cash Payment, together with
any and all interest paid under Section 1(d) above, and that Century shall treat gain or loss from
termination of the Contracts as ordinary income or loss pursuant to Section 1221(a)(7) of the
Internal Revenue Code of 1986, as amended, and Treasury Regulation Section 1.1221-2. Glencore
shall deliver to Century a valid IRS Form W8-ECI upon the execution of this Agreement and at any
other time as required by applicable law.
2. Representations & Warranties of Century. Century hereby represents and warrants to
Glencore as follows, as of the date hereof:
(a) Century has the corporate power and legal capacity to execute and deliver this Agreement
and to perform its obligations hereunder. The execution, delivery and performance of this
Agreement have been authorized by all necessary corporate actions on the part of Century. This
Agreement has been duly executed and delivered on behalf of Century, and constitutes its legal,
valid, and binding obligation, enforceable against it in accordance with its terms. Neither
Century nor any of its subsidiaries is in violation of any of the provisions of its respective
certificate of incorporation, bylaws or other constituent documents.
(b) Neither the execution and delivery by Century of this Agreement nor the performance of its
obligations hereunder do or will conflict with, result in any breach of or constitute a default (or
an event that with notice or lapse of time or both would become a default) under, require, trigger
or accelerate any “change of control”, anti-takeover provision or “poison pill” payment or other
rights under, or otherwise entitle any person to any payment or to exercise any rights under or
impair the rights of any person under, any provisions of (i) the certificate of incorporation or
by-laws of Century, (ii) any law, order, judgment, award, injunction, decree applicable to or by
which Century or any of its subsidiaries is bound, or (iii) any contract to which Century or any of
its subsidiaries is a party or by which any of them is bound (including under any employment,
severance or similar contract or arrangement), except in the case of the clause (iii) as would not
be reasonably expected to have a material adverse effect on Century’s ability to consummate the
transactions contemplated by this Agreement.
(c) No consent, waiver, approval, order or authorization of, or registration, declaration or
filing with any person or entity, including any supranational, national, state,
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municipal, local or foreign government, any instrumentality, subdivision, court,
administrative agency or commission or other governmental authority or instrumentality or any
quasi-governmental or private body performing any regulatory, taxing, importing or other
governmental or quasi-governmental function (“Governmental Entity”), is required to be
obtained or made by Century in connection with its execution, delivery or performance of this
Agreement and the transaction contemplated hereby, other than such filings and notifications as may
be required under, the Delaware General Corporation Law, the Securities Exchange Act of 1934, as
amended and the rules and regulations of The NASDAQ Stock Market.
(d) There is no action, suit, proceeding, inquiry or investigation before or by any
Governmental Entity or any self-regulatory organization or body pending or, to Century’s Knowledge,
threatened against or affecting Century that challenges, or may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, this Agreement or the transaction
contemplated hereby. For purposes of this Agreement, the term “Knowledge” means, with respect to
each party, the reasonable knowledge of the individuals respectively indicated on Exhibit E
hereto, after and/or assuming due inquiry.
3. Representations & Warranties of Glencore. Glencore hereby represents and warrants
to Century as follows, as of the date hereof:
(a) Glencore has the corporate power and legal capacity to execute and deliver this Agreement
and to perform its obligations hereunder. The execution, delivery and performance of this
Agreement have been authorized by all necessary corporate actions on the part of Glencore. This
Agreement has been duly executed and delivered on behalf of Glencore, and constitutes its legal,
valid, and binding obligation, enforceable against it in accordance with its terms. Neither
Glencore nor any of its subsidiaries is in violation of any of the provisions of its respective
certificate of incorporation, bylaws or other constituent documents.
(b) Neither the execution and delivery by Glencore of this Agreement nor the performance of
its obligations hereunder do or will conflict with, result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, require,
trigger or accelerate any “change of control”, anti-takeover provision or “poison pill” payment or
other rights under, or otherwise entitle any person to any payment or to exercise any rights under
or impair the rights of any person under, any provisions of (i) the constitutive documents of
Glencore, or (ii) any law, order, judgment, award, injunction, decree applicable to or by which
Glencore or any of its subsidiaries is bound.
(c) No consent, waiver, approval, order or authorization of, or registration, declaration or
filing with any person or entity, including any Governmental Entity, is required to be obtained or
made by Glencore in connection with its execution, delivery or performance of this Agreement and
the transaction contemplated hereby.
(d) There is no action, suit, proceeding, inquiry or investigation before or by any
Governmental Entity or any self-regulatory organization or body pending or, to Glencore’s
Knowledge, threatened against or affecting Glencore that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, this Agreement or the
transaction contemplated hereby.
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4. Public Disclosure. The parties acknowledge that they have agreed to the text of
the press release announcing the signing of this Agreement and the transaction contemplated by the
Purchase Agreement. Without limiting any other provision of this Agreement, the parties will
consult with each other before issuing, and provide each other the opportunity to review and
comment upon and use reasonable best efforts to agree on any other press release or public
statement with respect to this Agreement, the transaction contemplated hereby and the transaction
contemplated by the Purchase Agreement, and will not issue any such press release or make any such
public statement prior to such consultation and (to the extent practicable) agreement, except as
may be required by applicable law or applicable requirements of The NASDAQ Stock Market. Without
limitation to the generality of the foregoing, the parties acknowledge that Century may disclose
the material terms of this transaction, including copies of this agreement and associated
agreements to the extent required pursuant to the rules and regulations of the U.S. Securities and
Exchange Commission without the prior consent of, or consultation with, Glencore.
5. Confidentiality. Each party agrees to maintain in confidence, and to cause its
directors, officers, employees, agents, and advisors to maintain in confidence, and not use for any
purpose, any written, oral, or other information obtained in confidence from the other party in
connection with this Agreement or the transactions contemplated hereby; provided that the foregoing
shall not apply to information: (a) that is already known to the receiving party or to others not
bound by a duty of confidentiality, (b) that becomes publicly available through no fault of the
receiving party, or (c) the disclosure of which is required pursuant to applicable law (including
pursuant to subpoena, court order or similar instruments issued by any court or regulatory body) or
applicable requirements of The NASDAQ Stock Market.
6. Further Assurances. The parties hereto agree (a) to furnish upon request to each
other such further information, (b) to execute and deliver to each other such other documents, and
(c) to do such other acts and things, all as the other party may reasonably request for the purpose
of carrying out the transaction contemplated by this Agreement.
7. Survival of Representations and Warranties. The respective representations and
warranties of Glencore and Century set forth in this Agreement will survive performance of the
transaction contemplated by this Agreement.
8. Interpretation. This Agreement shall be deemed to have been jointly drafted by the
parties hereto and no provision of it shall be interpreted or construed for or against either party
because such party actually or purportedly prepared or requested such provision, any other
provision or the Agreement as a whole.
9. Expenses. Each party to this Agreement will bear its respective costs and expenses
incurred in connection with the preparation, execution, and performance of this Agreement
and the transaction contemplated hereby, including all fees and expenses of its counsel,
accountants and other agents and representatives. Notwithstanding the foregoing sentence, Century
shall indemnify and hold harmless Glencore for all fees, expenses and costs, including reasonable
fees and expense of attorneys’, incurred by Glencore in connection with its enforcement of its
rights to payment of the Deferred Amount, including rights under Section 1(d). Century shall
discharge such indemnification obligation by reimbursing Glencore for such
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amounts from time to time within fifteen calendar days of Glencore’s written request for such
reimbursement.
10. Remedies; Specific Performance. Any and all remedies available to a party will be
deemed cumulative with and not exclusive of any other remedy available to it, whether conferred
hereby, or by law or equity, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy. The parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
11. Governing Law. This Agreement, the rights and obligations of the parties under
this Agreement and any claim or controversy directly or indirectly based upon or arising out of
this Agreement (whether based on contract, tort or any other theory), including all matters of
construction, validity and performance, shall in all respects be governed by and interpreted,
construed and determined in accordance with, the laws of the State of New York, without giving
effect to any conflict of laws rules that might lead to the application of the laws of any other
jurisdiction.
12. Arbitration; Confidentiality. Except as otherwise provided in Section 10 above,
any dispute, controversy or claim arising out of or relating to this Agreement, or the breach
thereof, shall be finally settled by binding arbitration in New York, New York administered by the
American Arbitration Association (AAA) under its Commercial Arbitration Rules, (the “AAA
Rules”) and judgment on the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. The arbitral tribunal shall be composed of three arbitrators,
selected in accordance with the AAA Rules. The language to be used in the arbitral proceedings
shall be in English. All arbitral proceedings conducted pursuant to this Section 12, all
information disclosed and all documents submitted or issued by or on behalf of any of the disputing
parties or the arbitrators in any such proceedings as well as all decisions and awards made or
declared in the course of any such proceedings shall be kept strictly confidential, except for any
disclosure as may be required by law, and may not be used for any other purpose than these
proceedings nor be disclosed to any third party without the prior written consent of the party to
which the information relates or, as regards to a decision or award, the prior written consent of
all the other disputing parties.
13. Severability. If any provision of this Agreement is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions of this Agreement will remain in full
force and effect. Any provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or unenforceable.
14. Amendments; Waivers. No modification, amendment or waiver of any provision of
this Agreement shall be effective unless in writing and signed by each party hereto. No waiver by
any party of any breach of this Agreement shall be construed as a waiver of any subsequent breach,
and the failure by any party to enforce any provision of this Agreement or to require at any time
performance by any other party of any provision hereof shall in no way be
6
construed to be a waiver of any provision of or to affect the validity of this Agreement, or
any part hereof, or the right of any party thereafter to enforce each and every provision in
accordance with the terms of this Agreement.
15. Assignments; Successors. Neither party hereto may assign any of its rights under
this Agreement to another person without the prior consent of the other party. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties.
16. Notices. Any notice, request or other communication made by a party hereto
regarding this Agreement or the transactions contemplated hereby shall be in writing and may be
personally served or sent by overnight courier, electronic transmission or facsimile. Addressed to
the relevant party at its address, electronic mail or facsimile number as specified below or at
such other address, electronic mail or facsimile number as such party may subsequently request in
writing. All such communications and notices shall be effective upon receipt.
If to Century:
Century Aluminum Company
Office of the General Counsel
0000 Xxxxxx Xxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Office of the General Counsel
0000 Xxxxxx Xxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Xxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Xxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Glencore:
Glencore Ltd.
Three Stamford Plaza
000 Xxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attn: Head of the Aluminum Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Three Stamford Plaza
000 Xxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attn: Head of the Aluminum Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
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Glencore AG
Xxxxxxxxxxxxxxxxx 0
XX-0000 Xxxx, Xxxxxxxxxxx
Attn: Xxxxxxx Xxxxxxxx
Telephone: x00-00-000-0000
Facsimile: x00-00-000-0000
Xxxxxxxxxxxxxxxxx 0
XX-0000 Xxxx, Xxxxxxxxxxx
Attn: Xxxxxxx Xxxxxxxx
Telephone: x00-00-000-0000
Facsimile: x00-00-000-0000
with a copy to:
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxx
Attn: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxx
Attn: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
17. Entire Agreement. This Agreement supersedes all prior and contemporaneous
negotiations, promises, covenants, agreements, understandings, representations and warranties
between the parties with respect to the subject matter hereof and constitute a complete and
exclusive statement of the terms of the agreement between the parties with respect to their
respective subject matters; provided that it shall not limit or otherwise affect the Purchase
Agreement and the transactions contemplated thereby.
18. Counterparts. This Agreement may be executed in multiple original counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.
[Signature page follows]
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IN WITNESS WHEREOF, the undersigned Glencore Ltd. and Century Aluminum Company have executed
this Termination Agreement as of the date first above written.
| CENTURY ALUMINUM COMPANY: |
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| By: | /s/ Xxxxxxx X. Bless | |||
| Name: | Xxxxxxx X. Bless | |||
| Title: | Executive Vice President & Chief Financial Officer |
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| GLENCORE LTD.: |
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| By: | /s/ Xxxxxx Xxx Xxxxxxxx | |||
| Name: | Xxxxxx Xxx Xxxxxxxx | |||
| Title: | Corporate Secretary | |||
