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EXHIBIT 2.3 CENTURY ALUMINUM 8-K
MOLTEN ALUMINUM PURCHASE AGREEMENT
THIS MOLTEN ALUMINUM PURCHASE AGREEMENT (this "AGREEMENT") is
entered into as of September 20, 1999 ("EFFECTIVE DATE"), by and between CENTURY
ALUMINUM OF WEST VIRGINIA, INC., a Delaware corporation ("SELLER"), and PECHINEY
ROLLED PRODUCTS, LLC, a Delaware limited liability company ("BUYER").
RECITALS
A. Seller has sold to Buyer the assets consisting of an
aluminum rolling mill (the "ROLLING MILL") and cast house (the "CAST HOUSE")
located in Ravenswood, West Virginia (the Rolling Mill and the Cast House
together being the "FABRICATION PLANT").
B. Seller produces molten primary aluminum at the aluminum
reduction plant located adjacent to the Fabrication Plant in Ravenswood, West
Virginia (the "REDUCTION PLANT").
C. Seller wishes to sell to Buyer and Buyer wishes to purchase
from Seller certain quantities of Molten Aluminum (as hereinafter defined)
produced at the Reduction Plant.
NOW, THEREFORE, the Parties, intending to be legally bound by
this Agreement, agree as follows:
1. DEFINITIONS.
1.1. DEFINED TERMS. For purposes of this Agreement each of the
following terms shall have the meaning specified below and may be used in the
plural or singular form.
"AFFILIATE" of any person or entity shall mean any other
person or entity directly or indirectly controlling, controlled by, or under
common control with, such person or entity, whether through the ownership of
voting securities, by contract or otherwise. For purposes of this definition,
"control" (including with correlative meanings, the terms "controlling",
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"controlled by", and "under common control with") as applied to any person or
entity, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of that person or entity.
"ANNUAL FORECAST" shall have the meaning set forth in Section
2.2.
"APPLICABLE LAWS" shall mean any or all of the following to
the extent applicable in the context:
(i) federal, state, county and municipal or other local
laws, codes, rules and regulations;
(ii) judgments, decrees, writs and injunctions of any court,
arbitration panel, arbitrator or Regulatory Authority;
and
(iii) orders, licenses, permits, directives or other actions
of any Regulatory Authority.
"BANKRUPTCY LAWS" shall have the meaning specified in Section
12.2.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in New York City are required or
permitted by law to close.
"CAST HOUSE" shall have the meaning set forth in Recital A
hereof.
"CASTING CHARGE" shall have the meaning set forth in Section
8.2
"CENTURY INDEMNITEES" shall have the meaning set forth in
Section 15.7.
"DELIVERY POINT" shall have the meaning set forth in Section
3.1.
"DOLLARS" and "$" shall mean the legal currency of the United
States of America.
"EXCESS METAL" shall have the meaning set forth in Section
8.1.
"FABRICATION PLANT" shall have the meaning set forth in
Recital A hereof.
"FACILITY" shall mean the Reduction Plant and the Fabrication
Plant.
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"FORCE MAJEURE" shall have the meaning specified in Section
13.1.
"FORCE MAJEURE PARTY" shall have the meaning specified in
Section 13.2.
"HIGH IRON ALUMINUM" shall mean unalloyed molten primary
aluminum metal having an iron content greater than 0.50% but a monthly average
iron content of 1% or less and otherwise meeting the Molten Aluminum
Specifications.
"LIEN" shall mean any mortgage, pledge, lien, charge,
encumbrance, lease, security interest or claim.
"MAXIMUM QUANTITY" shall have the meaning set forth in Section
2.1.
"MINIMUM QUANTITY" shall have the meaning set forth in Section
2.1.
"MOLTEN ALUMINUM" shall mean unalloyed molten primary aluminum
metal conforming to the Molten Aluminum Specifications.
"MOLTEN ALUMINUM PRICE" shall have the meaning set forth in
Section 6(a).
"MOLTEN ALUMINUM SPECIFICATIONS" shall mean the specifications
set forth in Section 1 of Exhibit C hereto.
"MONTH" shall mean a calendar month.
"MONTHLY DECLARATION" shall have the meaning set forth in
Section 2.3.
"MONTHLY QUANTITY" shall mean the quantity of Molten Aluminum
to be delivered during a Month, as specified in the Monthly Declaration
delivered with respect to such Month in accordance with Section 2.3.
"NON-TERMINATING PARTY" shall have the meaning set forth in
Section 12.2.
"NOTICES" shall have the meaning specified in Section 15.10.
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"P4050" shall mean unalloyed primary molten aluminum metal
with an iron content greater than 0.30% but less than 0.50% and with silicon
content not greater than 0.40%, and otherwise meeting the Molten Aluminum
Specifications.
"PECHINEY INDEMNITEES" shall have the meaning set forth in
Section 15.6.
"POUND" shall mean a unit of weight equal to sixteen ounces
avoirdupois.
"POWER CONTRACT" shall mean Seller's existing contract for the
supply of electric power, dated July 1, 1996, between Seller and American
Electric Power (f.k.a. OPC Power Company) which expires on July 31, 2003.
"QUALITY SHORTFALL" shall have the meaning set forth in
Section 3.2(b).
"QUARTERLY FORECAST" shall have the meaning set forth in
Section 2.2.
"RECEIVING PARTY" shall have the meaning specified in Section
13.2.
"REDUCTION PLANT" shall have the meaning set forth in Recital
B hereof.
"REGULATORY AUTHORITY" shall mean any federal, state,
municipal, local or other governmental department, commission, board, agency,
taxing authority, possession, territory or instrumentality.
"ROLLING MILL" shall have the meaning set forth in Recital A
hereof.
"SOW" shall mean unalloyed primary aluminum metal in sow form
conforming to the Sow Specifications.
"SOW DELIVERY POINT" shall have the meaning set forth in
Section 8.4.
"SOW SPECIFICATIONS" shall have the meaning set forth in
Exhibit D.
"TAC" or "TAC SYSTEM" shall mean the patented equipment
designed for treatment of molten primary aluminum in crucible.
"TERMINATING PARTY" shall have the meaning specified in
Section 12.2.
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1.2. GENERAL PROVISIONS. In this Agreement, unless the context otherwise
requires:
1.2.1. References to a Section, Schedule or Exhibit not
otherwise identified in this Agreement shall be construed as references to that
specified Section of, or that Exhibit or Schedule to, this Agreement.
1.2.2. References to a document (including this Agreement), or
to any particular provision of a document, shall be construed as references to
that document or provision as amended or supplemented from time to time.
2. SALE AND PURCHASE; FORECASTS.
2.1. OBLIGATION TO PURCHASE AND SELL. Subject to the
provisions of this Section 2 and, to the extent applicable, Section 12.1, Buyer
shall purchase from Seller and Seller shall sell to Buyer a minimum of
[Confidential Information filed separately with the SEC] Pounds of Molten
Aluminum per Month ("MINIMUM QUANTITY") and a maximum of [Confidential
Information filed separately with the SEC] Pounds of Molten Aluminum per Month
("MAXIMUM QUANTITY"). Seller shall make deliveries of the Monthly Quantity for
each Month in approximately even daily amounts. It is understood that the
Minimum Quantity and the Maximum Quantity as stated above have been fixed on the
basis of a Month consisting of thirty (30) days and that such amounts are to be
adjusted pro rata in respect of any Month consisting of more or fewer days.
2.2. ANNUAL AND QUARTERLY FORECASTS. Between October 1 and
October 15th of each calendar year, Buyer shall deliver to Seller a non-binding,
good faith written forecast of Buyer's requirements for Molten Aluminum at the
Fabrication Plant during each Month of the immediately following calendar year
(the "ANNUAL FORECAST"). No later than forty-five (45)
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days prior to the first day of each calendar quarter, Buyer shall deliver to
Seller a revised forecast of Buyer's requirements for Molten Aluminum (the
"QUARTERLY FORECAST") for each Month of such calendar quarter. The quantity
forecast for each Month in the Quarterly Forecast shall not be less than the
Minimum Quantity or more than the Maximum Quantity.
2.3. MONTHLY DECLARATION. Within the last five (5) days of
each Month, Buyer shall deliver to Seller in writing a declaration (the "MONTHLY
DECLARATION") of the quantity of Molten Aluminum which it will purchase from
Seller during the Month beginning on the first day of the second Month
immediately following the Month in which the Monthly Declaration is required to
be delivered. (Example: the Monthly Declaration delivered within the last five
(5) days of December will fix the quantity for the following February.) The
quantity fixed in a Monthly Declaration shall not (i) vary by more than two
percent (2%) from the quantity forecast for such Month in the Quarterly
Forecast, or (ii) be less than the Minimum Quantity or more than the Maximum
Quantity. Once delivered to Seller, each Monthly Declaration shall be final and
binding upon the parties as to the quantities specified therein for the
applicable Month.
2.4. INITIAL FORECASTS. The Monthly Declarations for the
Months of September and October, 1999 are attached as Exhibit A hereto. The
Quarterly Forecast for the calendar quarter ending December 31, 1999 is attached
as Exhibit B hereto.
3. DELIVERY.
3.1. QUANTITY MAKEUP. (a) If at the end of a Month Buyer
shall determine that Seller has failed to deliver to Buyer the Monthly Quantity
required to be delivered for such Month, Buyer shall so notify Seller within
five (5) Business Days following the end of such Month, by notice ("BUYER'S
NOTICE") given in writing to the Reduction Plant manager, with a copy to Seller,
and, within twenty-four (24) hours of receipt of Buyer's Notice, Seller shall
give
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notice ("SELLER'S NOTICE") in writing to the Fabrication Plant manager, with a
copy to Buyer, as to whether or not Seller shall remedy such shortfall by
delivering Sows cast for Seller pursuant to Section 8. Buyer's Notice hereunder
shall specify the amount by which the Molten Aluminum delivered by Buyer during
the relevant Month is less than the Monthly Quantity for such Month. If Seller
shall so elect, Seller shall deliver Sows from Seller's inventory, sufficient on
a Pound for Pound basis to remedy such shortfall, within five (5) days of
delivery of Seller's Notice.
(b) To the extent that (i) Seller shall not elect to remedy a
quantity shortfall by delivery of Sows pursuant to Section 3.1(a) above or shall
have failed to deliver Seller's Notice as specified therein, and (ii) the total
quantity of Molten Aluminum and/or Sows delivered by Seller to Buyer during such
Month is less than ninety-eight percent (98%) in amount of the Monthly Quantity
for such Month, then Seller shall indemnify Buyer in an amount equal to the
product of (x) [Confidential Information filed separately with the SEC] and (y)
the amount in Pounds by which the total quantity of Molten Aluminum and/or Sows
delivered by Seller to Buyer during such Month is less than the Monthly Quantity
for such Month. Such indemnity shall be payable irrespective of any amounts of
molten or solid aluminum effectively purchased by Buyer from third parties to
compensate for such shortfall. The indemnity payable hereunder shall be deducted
from the amount that is to be paid by Buyer to Seller with respect to the
relevant Month, as provided in Section 7.2 (or, in the event that the amount
payable by Seller to Buyer shall be in excess of the amount payable by Buyer to
Seller with respect to such Month, then Seller shall pay to Buyer the balance
thereof not later than the fifteenth (15th) day of the Month immediately
following the Month in which the quantity shortfall occurred).
3.2. SELLER'S INDEMNITY FOR QUALITY SHORTFALL. (a) If, at any
time during a Month or to the extent practicable within one (1) day, but in no
event more than three (3) Business
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Days, following the end of such Month, Buyer determines that molten primary
aluminum delivered by Seller to Buyer during such Month will not meet or has not
met the Molten Aluminum Specifications, and such failure to meet the Molten
Aluminum Specifications will result or has resulted in a Quality Shortfall (as
hereinafter defined), then Buyer shall so notify Seller promptly upon such
determination and, to the extent practicable within one (1) day, but in no event
more than three (3) Business Days, following the end of such Month, by notice
("BUYER'S QUALITY SHORTFALL NOTICE") given in writing to the Reduction Plant
manager, with a copy to Seller. Within twenty-four (24) hours of receipt of
Buyer's Quality Shortfall Notice, Seller and Buyer shall confer, in good faith,
to determine the least cost solution to remedy such Quality Shortfall. In the
event that Seller and Buyer shall so agree on such least cost solution, then
such solution shall be utilized to remedy the Quality Shortfall and Seller shall
indemnify Buyer for the cost thereof, provided that in no event shall such cost
be in excess of the Shortfall Penalty which would otherwise be payable in
respect of such Quality Shortfall. In the event that Seller and Buyer shall fail
to agree on such least cost solution within such twenty-four (24) hour period,
then no later than five (5) days following receipt of Buyer's Quality Shortfall
Notice, Seller shall give notice ("SELLER'S QUALITY SHORTFALL NOTICE") to Buyer
in writing as to whether it shall (i) compensate for such Quality Shortfall by
delivery of Sows or (ii) pay the Shortfall Penalty, as determined in accordance
with Section 3.2(b) below. The amount payable by Seller to Buyer with respect to
the least cost solution utilized to remedy a Quality Shortfall or for a
Shortfall Penalty, as the case may be, shall be deducted from the amount that is
to be paid by Buyer to Seller with respect to the relevant Month, as provided in
Section 7.2 (or, in the event that the amount payable by Seller to Buyer shall
be in excess of the amount payable by Buyer to Seller with respect to such
Month, then Seller shall pay to Buyer the balance thereof not later
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than the fifteenth (15th) day of the Month immediately following the Month in
which the Quality Shortfall occurred).
(b) To the extent that a Quality Shortfall is not remedied by
utilization of the least cost solution determined by Seller and Buyer as
specified in Section 3.2(a) or by delivery of Sows, Seller shall indemnify Buyer
in an amount equal to the product of (x) [Confidential Information filed
separately with the SEC] and (y) the amount of the remaining Quality Shortfall,
in Pounds (the "SHORTFALL PENALTY").
(c) For purposes of this Section 3.2, a "QUALITY SHORTFALL"
shall mean the quantity expressed in Pounds by which the amount of Molten
Aluminum delivered by Seller to Buyer during such Month is less than the Monthly
Quantity with respect to such Month by virtue of the delivery by Seller to Buyer
of molten primary aluminum which failed to meet the Molten Aluminum
Specifications. For purposes of calculation of a Shortfall Penalty in accordance
with Section 3.2(b), the Quality Shortfall for the relevant Month shall not
include any amounts of molten primary aluminum not conforming to the Molten
Aluminum Specifications which were delivered by Seller during such Month and are
retained by Buyer and not cast by Buyer, other than for reason of lack of
available capacity, for the account of Seller and delivered to Seller in
accordance with Sections 3.3 and 8.4 hereof.
3.3. SHORTFALL TO BE CAST. Subject to Buyer's available
capacity to cast as provided in Section 8.1, Buyer shall cast for the account of
Seller all molten primary aluminum not conforming to the Molten Aluminum
Specifications which is delivered to Buyer by Seller during any Month.
3.4. REMEDIES EXCLUSIVE. Notwithstanding anything to the
contrary set forth in this Agreement, during the term of this Agreement, the
remedies for a quantity shortfall and a
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Quality Shortfall set forth in Sections 3.1 and 3.2, respectively, shall
constitute Buyer's exclusive remedies therefor.
3.5. TITLE AND RISK OF LOSS. Seller shall deliver Molten
Aluminum to Buyer hereunder in crucibles at the scale in the hot metal tunnel
between the Reduction Plant and the Cast House (the "DELIVERY POINT"). Title and
risk of loss to Molten Aluminum other than Excess Metal, (provided that the
parties acknowledge that the Molten Aluminum and Excess Metal shall be
commingled and Seller shall not remove any Excess Metal from the commingled
inventory until it has been identified as Excess Metal) shall pass to Buyer at
the Delivery Point. Deliveries shall be made from time to time as Molten
Aluminum is tapped by Seller accordance with Seller's normal practices. If
Seller substitutes Sows for Molten Aluminum pursuant to Section 2.5, the
delivery of such Sows shall be at such location at the Facility as Seller and
Buyer shall agree. Employees of Century WV shall retain control of the physical
delivery of the Molten Aluminum beyond the Delivery Point into the Cast House.
Neither Century WV nor any of such employees shall have any liability to
Pechiney with respect to such activities, except to the extent that any damage
to the property of Pechiney (including the Molten Aluminum) which may arise
therefrom shall be caused by the gross negligence, recklessness or willful
misconduct of any of such employees; provided that, without limiting the
foregoing, repeated violations by employees of Century WV of procedures in place
on the date hereof that have been notified to Century WV in writing by Pechiney
shall be deemed gross negligence.
3.6. TAC. As soon as practical and in any event within twenty
(20) Months following the Effective Date, Seller shall install a TAC System or
comparable equipment, and associated up-to-date skimming equipment, for use in
the production of all molten primary
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aluminum. Such equipment shall be installed on Seller's property. The TAC System
shall be operated by Seller.
3.7. OPERATION OF EQUIPMENT; DROSS. Until such time as Seller
shall have installed a TAC System, upon delivery of Molten Aluminum Buyer shall
skim bath and dross from each crucible and promptly return such bath and dross
to Seller. Following installation of a TAC System, Seller shall operate the TAC
System and skim bath and dross, prior to delivery of the Molten Aluminum. Bath
and dross skimmed from each crucible shall at all times be and remain the
exclusive property of Seller. Following installation of a TAC System, Buyer may
sample and test the Molten Aluminum in accordance with Section 5.2 during the
operation of the TAC System. Remaining bath and dross content shall be
determined as specified in Exhibit C. The percentage of remaining bath and dross
("PCT") shall be deducted for invoicing purposes in accordance with Section 7.1.
4. MOLTEN ALUMINUM WEIGHT.
The weight of Molten Aluminum delivered to Buyer hereunder
shall be determined by Buyer using the scale in the hot metal tunnel at the
Delivery Point. Not less frequently than monthly, Buyer will ensure that the
scale is certified as a commercial scale in accordance with customary industry
standards by an independent contractor mutually acceptable to Buyer and Seller,
and Buyer will promptly furnish Seller with the resulting certifications and
test results.
5. MOLTEN ALUMINUM QUALITY.
5.1. SPECIFICATIONS. Seller warrants that all Molten Aluminum
sold to Buyer hereunder shall meet the Molten Aluminum Specifications, and all
Sows delivered to Buyer pursuant to Section 3.1(a) or 3.2(a) shall meet the Sow
Specifications, in each case as such
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specifications may be adjusted or revised from time to time by written agreement
of the parties. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 5, SELLER MAKES NO
REPRESENTATION OR WARRANTY AS TO THE MOLTEN ALUMINUM OR SOWS TO BE SOLD BY
SELLER TO BUYER HEREUNDER, AND SELLER HEREBY DISCLAIMS ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, USAGE OR FITNESS FOR ANY PARTICULAR PURPOSE.
5.2. SAMPLING. Buyer shall sample and test the Molten Aluminum
contained in each crucible delivered by Seller hereunder using a method mutually
acceptable to the parties, and shall furnish the test results to Seller on a
daily basis. Buyer shall label and retain all samples taken for a period of no
less than thirty (30) days after delivery.
5.3. UMPIRES. If Buyer determines in accordance with Section
5.2 that molten primary aluminum delivered by Seller does not conform to the
Molten Aluminum Specifications, or determines that sows delivered by Seller
pursuant to Section 3 do not conform to the Sow Specifications, Buyer shall, no
later than two (2) Business Days after delivery of the relevant molten primary
aluminum or sows, deliver written notice of such failure to the Reduction Plant
manager, with a copy to Seller, describing the failure in reasonable detail. If
Seller disagrees with Buyer's determination that the molten primary aluminum or
sows do not meet the Molten Aluminum Specifications or Sow Specifications, as
the case may be, Seller shall have the right, exercisable by written notice
delivered to Buyer within five (5) Business Days after receipt of Buyer's
notice, to require an analysis of the relevant samples retained as provided for
in Section 5.2 by an independent umpire (applying, for purposes of rounding off,
the principles set forth in the "Standard Practice for Using Digits in Test Data
to Determine Conformance with Specifications" of ASTME 29), mutually acceptable
to the parties, whose determination shall be
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final and binding upon the parties. Without prejudice to any other remedies of
Buyer or Seller hereunder, if the molten primary aluminum or sows, as the case
may be, are found by the independent umpire to be not within the Molten Aluminum
Specifications or the Sow Specifications, as the case may be, then Seller shall
pay for the costs of the umpire's analysis and the non-conforming quantity shall
be excluded for purposes of determining compliance with the Monthly Quantity,
and if the molten primary aluminum or sows, as the case may be are found to be
within the Molten Aluminum Specifications or the Sow Specifications, as the case
may be, then Buyer shall pay for the costs of the umpire's analysis and the
conforming quantity shall be taken into account in determining compliance with
the Monthly Quantity.
5.4. LIENS. Seller warrants that all Molten Aluminum and all
Sows sold to Buyer hereunder shall be free from any lawful security interest or
lien thereon.
6. PRICE.
(a) The price for each Pound of Molten Aluminum sold by Seller
to Buyer hereunder shall be the [Confidential Information filed separately with
the SEC] price expressed in cents per Pound for P1020 aluminum as reported for
the Month immediately preceding the Month of delivery by [Confidential
Information filed separately with the SEC] ("MOLTEN ALUMINUM PRICE"), such
Molten Aluminum Price being net of sales taxes (if any) payable with respect to
such sale. The price may be subject to further adjustment as provided in Exhibit
C hereto. The price for each Pound of Sows delivered by Seller to Buyer pursuant
to Section 3.1(a) or 3.2(a) shall be the Molten Aluminum Price, [Confidential
Information filed separately with the SEC] per Pound. If [Confidential
Information filed separately with the SEC] ceases reporting the [Confidential
Information filed separately with the SEC] price, Buyer and Seller will in good
faith seek to determine a substitute publication or reference that most nearly
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approximates the price data reflected in [Confidential Information filed
separately with the SEC]. Failing agreement within three (3) days after the date
on which [Confidential Information filed separately with the SEC] ceased
reporting, Buyer and Seller will within three (3) additional days each designate
an independent expert and such independent experts will in good faith seek to
determine such a substitute publication or reference. If such independent
experts are unable to agree on such a substitute publication or reference within
ten (10) Business Days, the determination of a substitute publication or
reference price will be made by an arbitral panel appointed pursuant to the
procedures set forth in Section 15.3(b), in which case the arbitrators appointed
pursuant to such Section will be instructed to render their decision no later
than four (4) months from the date on which the arbitration procedure was
initiated. During any period in which no published price or other reference
price has been agreed or determined, the interim price for each Pound of Molten
Aluminum sold by Seller to Buyer hereunder shall be the sum of: (i) the average
per Pound in Dollars of the [Confidential Information filed separately with the
SEC] price for P1020 aluminum as published on [Confidential Information filed
separately with the SEC] for the Month prior to the Month of delivery plus (ii)
the amount per Pound in Dollars by which the last average [Confidential
Information filed separately with the SEC] price per Pound used as a basis for
pricing by the parties hereunder exceeded the average per Pound in Dollars of
the [Confidential Information filed separately with the SEC] Price for the Month
used to determine the last average [Confidential Information filed separately
with the SEC] price per Pound less (iii) [Confidential Information filed
separately with the SEC] per Pound. When the parties have agreed upon a
substitute reference price or such price has been determined by independent
experts or pursuant to Section 15.3, the parties will promptly make appropriate
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adjustments and payments in respect of Molten Aluminum for which an interim
price applied pursuant to the immediately preceding sentence.
(b) Notwithstanding the foregoing, the price for the
specified quantities of Molten Aluminum scheduled to be produced by Seller
during the Months specified on Exhibit A hereto shall be as set forth on such
Exhibit.
7. INVOICING AND PAYMENT.
7.1. INVOICING. Invoicing for Molten Aluminum sold hereunder
during each Month shall be made according to the following formula:
(i) Molten Aluminum weight determined as per
Section 4 of this Agreement ("W")
multiplied by (x) one (1) minus (-) Pct as
per Section 3.7 of this Agreement
multiplied by (x) the Molten Aluminum Price
("P"). Such formula can be summarized as
follows:
W x (1-Pct) x P
minus
(ii) Casting Charge as defined in Section 8.2
for molten primary aluminum cast in sow
form (Sows and/or sows not conforming to
the Sow Specifications): the Casting Charge
shall be equal to the weight of cast
aluminum in sow form (Sows and/or sows not
conforming to the Sow Specifications)
multiplied by (x) [Confidential Information
filed separately with the SEC].
7.2. PAYMENT. Payment for all Molten Aluminum sold hereunder
during each Month (including Sows substituted by Seller pursuant to Section
3.1(a) and 3.2(a)) shall be due
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from Buyer to Seller not later than the fifteenth (15th) day of the Month
immediately following the Month of delivery. Payment shall be made by wire
transfer of immediately available Dollars to such bank account as Seller may
designate from time to time by written notice to Buyer no later than five (5)
Business Days prior to the applicable payment date.
8. EXCESS MOLTEN ALUMINUM.
8.1. BUYER'S OBLIGATION TO CAST. Unless Seller, in its sole
discretion, chooses to develop its own casting capability, all Molten Aluminum
in excess of the quantities purchased by Buyer hereunder and all other molten
primary aluminum not conforming to the Molten Aluminum Specifications produced
by Seller at the Reduction Plant during the term of the Agreement ("EXCESS
METAL") shall be cast by Buyer into Sows or sows and delivered to Seller.
Notwithstanding the foregoing and the obligations of Buyer under Section 9,
whether or not Buyer exercises its option to reduce the quantities to be
purchased hereunder in accordance with the provisions of Section 12.1, Buyer's
obligation to cast Excess Metal into Sows and/or other sows for Seller shall be
limited to the extent of Buyer's available capacity to cast such Sows and/or
other sows at the Cast House at the xxxx Xxxxxx produces the applicable molten
primary aluminum; it being understood that (i) Buyer shall maintain the casting
capacity existing as of the date hereof, and (ii) there shall be no obligation
on Buyer to increase such casting capacity. Buyer shall not cast any form of
primary aluminum at the Cast House for sale by Buyer to third parties unless
Buyer has first cast all Excess Metal produced during such Month into Sows
and/or other sows for the account of Seller.
8.2. CASTING CHARGE. Any Excess Metal cast by Buyer for
Seller shall be subject to a casting charge (the "CASTING CHARGE"), payable by
Seller to Buyer, of [Confidential Information filed separately with the SEC] of
molten primary aluminum cast as Sows and/or
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other sows cast and delivered to Seller, such Casting Charge being net of sales
taxes (if any) payable with respect to such activity. If the Casting Charge is
not offset against amounts owed in respect of Molten Aluminum as provided in
Section 7.1 for any reason whatsoever, then the Casting Charge for all Excess
Metal cast for Seller during each Month which has not been so offset shall be
paid by Seller to Buyer no later than fifteen (15) days after the end of such
Month. Payment shall be made by wire transfer of immediately available Dollars
to such bank account as Buyer may designate from time to time by written notice
to Seller no later than five (5) Business Days prior to any payment date.
8.3. SOW WEIGHT. The weight of Sows and other sows cast for
Seller from Excess Metal shall be determined by Buyer, in cold form, using the
certified casting scale located in the M-1 bay in the Cast House or another
commercially certified scale acceptable to the parties. Not less frequently
than monthly, Buyer will ensure that such scale will be certified as a
commercial scale in accordance with customary industry standards by an
independent contractor mutually acceptable to Buyer and Seller, and Buyer will
promptly furnish Seller with the resulting certifications and test results.
8.4. SOW DELIVERY. Unless otherwise agreed by the parties,
all Sows and other sows cast by Buyer for the account of Seller during any
Month shall be delivered to Seller to the extent practicable within one (1)
day, and in no event more than five (5) days, after the end of such Month at
the outside primary sow storage pad or such other delivery point as may be
agreed from time to time (the "SOW DELIVERY POINT"). Buyer shall store such
Sows and other sows at no charge to Seller, and Buyer shall exercise such care
of Seller's Sows and other sows as Buyer would exercise if such Sows or other
sows belonged to Buyer. All Sows and other sows stored for Seller hereunder
shall be stored by Buyer as bailee, for the account of Seller, as xxxxxx, and
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Buyer shall have no ownership rights or interests in such Sows or other sows.
Buyer agrees to comply with all reasonable requests of Seller from time to time
to evidence Seller's ownership of the Sows and/or other sows, including without
limitation, (i) physical segregation of the Sows and/or other sows from Buyer's
property, (ii) conspicuous marking or posting to reflect Seller's ownership,
(iii) delivery of holding certificates, (iv) execution and delivery of UCC-1
financing statements to be filed for notice purposes, and (v) acknowledging
Seller's ownership of such Sows and/or other sows in such documents and
instruments as may from time to time be reasonably required by Seller.
8.5. LOADING AND REPORTING SERVICES. In further consideration
for the Casting Charge, Buyer shall load Seller's Sows and/or other sows for
shipment from the Facility in accordance with Seller's contracts for sale to
its customers, prepare bills of lading and other shipping documents and furnish
written reports to Seller in such detail and at such times as Buyer and Seller
shall agree. Buyer shall maintain the Sow and other sow inventory records by
grade employing Seller's existing metal grade system. Buyer shall continue
Seller's existing practice of checking the weight of Sows and/or other sows by
a second weighing on the main gate scales, and if the second weighing indicates
a weight discrepancy of more than one percent (1%), Buyer shall reweigh any
such Sows or other sows on the scale in the M-1 bay in the Cast House. The
weight thus determined will be the basis for the weight shipped to Seller's
customers and reported by Buyer to Seller's invoicing system.
9. CARE OF SELLER'S PROPERTY.
The parties recognize that Buyer will have possession and use
of Seller's property and equipment from time to time, including, without
limitation, crucibles, sow molds, and other equipment. Buyer shall exercise
such care of Seller's property and equipment as Buyer would
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exercise if such property and equipment belonged to Buyer. Buyer shall be
liable to Seller for all repair and/or replacement costs for damage to Seller's
property and equipment caused by acts or omissions of Buyer, including, without
limitation, repair or replacement of crucibles damaged by freezing of Molten
Aluminum contained therein. Buyer shall return all crucibles and other
equipment to Seller in sufficient time so that production at the Reduction
Plant is not delayed or interrupted due to lack of such equipment. Subject to
Section 10, Buyer shall indemnify and reimburse Seller for any damages,
expenses and liabilities arising from Buyer's failure to timely return any such
property and equipment to Seller; provided, however that Buyer shall be
relieved of any liability for such damages, expenses and liabilities to the
extent these arise out of Seller's failure to perform any of its obligations
hereunder. Each of Seller and Buyer shall, in accordance with good industry
practices, maintain, repair and/or replace all equipment that may, from time to
time, be in possession of the other party.
10. LIMITATION OF LIABILITY.
Neither party shall be liable to the other for special,
punitive or consequential damages (including but not limited to loss of profits
and loss of production that could arise out of Buyer's actions under Section 9)
resulting from breach of warranty, delay of performance or other default
hereunder.
11. SETOFF.
Either Buyer or Seller may setoff amounts then due to the
other hereunder against amounts then due to it from the other hereunder.
12. TERM; TERMINATION.
12.1. TERM. The initial term of this Agreement shall commence
on the Effective Date and shall continue in effect until July 31, 2003. If
Seller determines, in its sole
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discretion, that it will not extend or replace the Power Contract, Seller may
terminate this Agreement upon not less than twelve (12) months prior written
notice to Buyer, provided that the termination date specified in such notice
shall not be earlier than July 31, 2003. If Seller extends or replaces the
Power Contract or otherwise obtains electrical power through alternative
sources, this Agreement shall automatically be extended until the earlier of
(A) the date of termination of the extended or replacement Power Contract (or
the date on which the Reduction Plant will no longer be in operation for reason
of lack of electricity supply) and (B) July 31, 2007. Buyer shall have the
right, upon not less than twelve (12) months prior written notice to Seller, to
reduce the Minimum Quantity and the Maximum Quantity by fifty percent (50%)
each, for the then remaining term of this Agreement, provided that the
effective date of reduction may not be earlier than July 31, 2003. If Buyer
exercises its option to reduce the Minimum Quantity and Maximum Quantity, all
other provisions of this Agreement shall remain in full force and effect.
Notwithstanding the foregoing provisions of this Section 12.1, this Agreement
may be terminated at any time pursuant to Section 12.2.
12.2. TERMINATION. Either Buyer or Seller (the "TERMINATING
PARTY") may terminate this Agreement by notice to the other party or parties
(the "NON-TERMINATING PARTY") after the occurrence of any of the following
events:
12.2.1. A Non-Terminating Party in any material respect
fails to perform or breaches any material provision of this Agreement on its
part to be performed (other than any failure or breach excused under Section
13), and such failure or breach continues unremedied for a period of (i) in the
case of an obligation to make payment, thirty (30) days, and (ii) in the case of
any other material provision, ninety (90) days, after notice from the
Terminating Party. Notwithstanding indemnity payments by Seller under Section
3.1(b) and Section 3.2(b),
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consistent material failure by Seller to comply with its obligations to
deliver Molten Aluminum hereunder shall be deemed to be a breach by Seller
under this Section 12.2.1.
12.2.2. A Non-Terminating Party:
(i) consents to the appointment of a receiver,
trustee or liquidator of itself or of a
substantial part of its property, or admits
in writing its inability to pay its debts
generally as they become due, or makes a
general assignment for the benefit of
creditors;
(ii) files a voluntary petition in bankruptcy or
a voluntary petition or an answer seeking
reorganization under any bankruptcy or
insolvency law (as now or hereafter in
effect) or any other now existing or future
law providing for the reorganization or
winding-up of corporations, or providing
for an agreement, composition, extension or
adjustment with its creditors
(collectively, for purposes of this Section
12.2, "BANKRUPTCY LAWS"); or
(iii) is a defendant in an action or proceeding
under any bankruptcy law which action or
proceeding is not withdrawn or dismissed
within sixty (60) days after filing of the
petition or other paper initiating such
action or proceeding.
12.2.3. Any material provision of this Agreement
shall at any time for any reason cease to be legal, valid and binding on or
enforceable against a Non-Terminating Party, or shall be declared to be null and
void, or the validity or enforceability thereof shall be contested by a
Non-Terminating Party, or the Non-Terminating Party shall deny that it has any
further liability or obligation under this Agreement;
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12.2.4. The Power Contract, or any extension thereof or
replacement contract pursuant to which Seller purchases electrical power for
use at the Reduction Plant, shall be terminated for any reason other than
voluntary agreement of Seller or Seller's breach of such contract;
12.2.5. An event constituting Force Majeure which
prevents the performance by a party (for purposes of this Section 12.2.5, a
Force Majeure Party) of its obligations under this Agreement shall have
continued for a continuous period in excess of six (6) consecutive months.
12.3. EFFECT OF TERMINATION. Termination of this Agreement for
whatever reason shall not affect Seller's warranty obligations under Section 5,
Buyer's warranty obligations under Section 8.4, the indemnification obligations
under this Agreement, or any other duties of either party which by their nature
are to be performed after termination of this Agreement or which were due to be
performed or accrued as of the date of termination. Nothing in this Section 12.3
shall limit any remedies which are expressly provided to Buyer in this Agreement
for any breach by Seller of any covenant or agreement herein. The parties hereby
acknowledge and agree that, upon a termination of the Agreement by Buyer, as
Terminating Party, pursuant to Section 12.2.1, 12.2.2 or 12.2.3, in the event of
a failure by Seller to fulfill its obligations to deliver Molten Aluminum, Buyer
shall be entitled to liquidated damages equal to the product of (x)
[Confidential Information filed separately with the SEC] and (y) the Minimum
Quantity, per Month, for each Month during the period commencing with the date
of termination and expiring on (i) the date of termination of the initial term
of this Agreement as set forth in the first sentence of Section 12.1 or (ii) if
this Agreement has been extended as provided for in the third sentence of
Section 12.1, the date to which the term is extended as so provided in such
third sentence.
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13. FORCE MAJEURE.
13.1. FORCE MAJEURE EVENTS. Except to the extent caused by
the negligence, recklessness or willful misconduct of the party asserting Force
Majeure, the following shall constitute "FORCE MAJEURE" for purposes of this
Agreement:
(i) an act of God or the public enemy, fire,
explosion, lightning, perils of the sea,
flood, drought, war, riot, sabotage or
embargo;
(ii) interruption of or delay in transportation,
interruption of electrical power supply
(including due to exercise by the
applicable power company of its contractual
rights to interrupt power supply),
inadequacy or shortage or failure of supply
of raw materials, breakdowns of key
equipment at the Reduction Plant or the
Fabrication Plant, and labor disputes from
whatever cause arising and whether or not
the demands of the employees involved are
reasonable and within the affected party's
power to concede;
(iii) compliance with any order, action,
injunction, decree, law or regulation of
any Regulatory Authority or with any other
Applicable Laws;
(iv) without limiting the foregoing, any
circumstances of like or different
character beyond the reasonable control of
the affected party; or
(v) a Force Majeure affecting the other party.
13.2. EFFECT OF FORCE MAJEURE. If a party is prevented from,
or delayed in, performing any obligation on its part under this Agreement by
reason of Force Majeure, the party
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so affected (the "FORCE MAJEURE PARTY"), upon prompt written notice to the
other party (the "RECEIVING PARTY") shall be excused from making or taking such
delivery to the extent and for the duration of the period that the same is
prevented or delayed and, at the sole option of the Receiving Party exercised
by notice to the Force Majeure Party, the total quantity of Molten Aluminum (or
substitute Sows) to be sold and purchased hereunder or the total quantity of
Sows to be converted by Buyer for Seller hereunder, as the case may be, at such
time shall be reduced by the quantity so affected. If the Force Majeure affects
the Fabrication Plant but not the Cast House, Buyer shall continue, to the
extent reasonably feasible and subject to Buyer's available casting capacity,
to cast molten primary aluminum for the account of Seller pursuant to Section
8.1.
13.3. NOTICE; EFFORTS TO REMEDY. 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
probable extent to which the affected party will be unable to perform or will
be delayed in performing its obligations hereunder. 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.
13.4. MONTHLY QUANTITY REDUCTION. Any quantity of primary
aluminum purchased by Buyer from third parties as a substitute for Molten
Aluminum and/or Sows not delivered by Seller during an event of Force Majeure
shall be deducted from the relevant Monthly Quantity that otherwise would have
been required to be delivered by Seller to Buyer during the period of a Force
Majeure.
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14. ASSIGNMENT; MERGER.
14.1. ASSIGNMENT. Seller may assign this Agreement or any of
its rights hereunder to one or more of its secured lenders as collateral.
Either Buyer or Seller 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 such party shall remain liable for all obligations of the assignee
hereunder. The parties agree that, (i) in the case of a direct or indirect sale
of substantially all the assets of the Reduction Plant to a non-Affiliate of
Seller, Seller shall assign all its rights and obligations hereunder to the
purchaser of such assets and the purchaser shall assume all such rights and
obligations and Seller shall have no further rights or obligations hereunder,
and (ii) in the case of a direct or indirect sale of substantially all the
assets of the Fabrication Plant to a non-Affiliate of Buyer, Buyer 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 Buyer 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.
14.2. MERGER. In the event of a merger between either party
hereto and a third party, the party hereto entering into such merger shall
cause the surviving party (if other than the party hereto) of such merger to
assume all the rights and obligations hereunder of the party hereto entering
into such merger.
15. MISCELLANEOUS PROVISIONS.
15.1. ENTIRE AGREEMENT; AMENDMENT. This Agreement (including
its Exhibits) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes any prior expressions of
intent or understandings with respect to such
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subject matter. This Agreement may only be amended, modified, supplemented,
released, discharged or abandoned by an instrument in writing signed by a duly
authorized officer of each of the parties.
15.2. WAIVER. The failure or delay of either party to require
performance by the other of any provisions of this Agreement shall not affect
such party's right to require performance of that provision unless and until
performance has been waived in writing.
15.3. GOVERNING LAW; DISPUTES. (a) This Agreement shall in all
respects be governed by, and construed in accordance in accordance with, the
laws of the State of New York without application of the principles of conflicts
of laws of such state.
(b) All disputes arising in connection with this Agreement
shall be finally settled by arbitration under the Rules of Conciliation and
Arbitration of the International Chamber of Commerceby a panel of three (3)
arbitrators appointed in accordance with such rules, and any award or decision
rendered by such arbitral panel shall be final and binding on the parties and
nonappealable. The arbitration shall take place in New York, New York.
The parties submit to the jurisdiction of any court in the
United States having jurisdiction over a party or such party's assets for the
purposes of granting interim or conservatory measures prior to the constitution
of the arbitral tribunal in any dispute arising hereunder. After such
consitution of the arbitral tribunal, applications for interim or conservatory
measures must be made to the arbitral tribunal, to the exclusion of any court
or other judicial authority.
(c) Prior to submission to arbitration, Buyer and Seller shall
first attempt to resolve any dispute hereunder informally at the lowest
possible level of authority. If Buyer and Seller fail to promptly agree through
such normal channels and procedures, then Buyer and
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Seller each shall designate an authorized representative from senior management
who does not devote substantially all of his or her time to performance under
this Agreement and whose task it will be to meet and negotiate in good faith
for the purpose of resolving the dispute. If the authorized representatives of
Buyer and Seller cannot resolve the dispute within twenty (20) days after the
initial request to negotiate, either Buyer or Seller may require that the
dispute be finally resolved by arbitration as provided above.
15.4. TAXES. Buyer shall bear all sales taxes (if any) on
Molten Aluminum sold to Buyer hereunder (including Sows substituted by Seller
pursuant to Section 3.1(a) or 3.2(a)) now imposed or hereafter becoming
effective during the term of this Agreement. Seller shall bear all sales taxes
(if any) in respect of casting work done for Seller by Buyer hereunder now
imposed or hereafter becoming effective during the term of this Agreement. Each
of Seller and Buyer shall accept from the other a West Virginia direct pay
permit in lieu of collecting sales taxes from such other party. Neither Buyer
nor Seller shall be liable for any other governmental taxes, duties, charges or
imposts, including, without limiting the generality of the foregoing, any
federal, state or local taxes on corporate income incurred by the other party
with respect to payment from Buyer or Seller, as the case may be.
15.5. INDEPENDENT CONTRACTORS. Each party's duties and
performance under this Agreement shall be those of an independent contractor,
and nothing in this Agreement shall be deemed to make either party a partner,
joint venturer or otherwise liable for the performance of the other party's
obligations under this Agreement or otherwise. Without limiting the generality
of the foregoing:
15.5.1. Subject to Section 13, each of the parties shall
provide, at its own cost and risk, the requisite electrical power and materials,
and all requisite labor, to (i) produce
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Molten Aluminum sold under this Agreement in the case of Seller, and (ii) to
convert Molten Aluminum into Sows, in the case of Buyer;
15.5.2. Each party shall be solely responsible for its
employee's compensation, benefits and well-being, and the functioning and
maintenance of the Reduction Plant (in the case of Seller) and the Fabrication
Plant (in the case of Buyer), in accordance with all Applicable Laws and any
contractual arrangements which each party may have or hereafter enter into.
Without limiting the foregoing, neither party shall have any responsibility for
salaries or wages payable to employees of the other party or any withholding
with respect to such salaries or wages, for any claims by employees of the
other party for workers' compensation, for any acts or negligence of employees
or agents of the other party, or for any acts or negligence of the other party
(including, without limitation, disposal of all residue, slag, dross, bath and
process by-products); and
15.5.3. Each party shall be exclusively responsible for,
and hereby covenants that it will comply with, all Applicable Laws relating to
its ownership or other interest in, or operation of, (i) the Fabrication Plant
in the case of Buyer, and (ii) the Reduction Plant in the case of the Seller,
including, without limitation, disposal of all residue, slag, dross, bath and
process by-products by the applicable party.
15.6. INDEMNITY BY SELLER. Subject to the provisions of
Section 5.1 and Section 10 hereof, Seller shall indemnify Buyer, its successors
and assigns, and its shareholders, directors, officers, employees, agents and
customers (collectively, the "PECHINEY INDEMNITEES"), against, and agrees to
protect, save and keep harmless each Pechiney Indemnitee from, any and all
liabilities, obligations, losses, damages, claims (including without limitation
claims based on warranty, breach of contract, negligence or strict liability in
tort), penalties,
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actions, suits, costs, expenses and disbursements (including without limitation
legal fees and expenses) of whatsoever kind and nature, imposed on, incurred by
or asserted against any Pechiney Indemnitee by any third party to the extent
that any such third party claim relates to or arises out of a breach by Seller
of its obligations under this Agreement.
15.7. INDEMNITY BY BUYER. Subject to Section 10 hereof, Buyer
shall indemnify Seller, its successors and assigns and its shareholders,
directors, officers, employees, agents and customers (collectively, the
"CENTURY INDEMNITEES"), against, and agrees to protect, save and keep harmless
each Century Indemnitee from, any and all liabilities, obligations, losses,
damages, claims (including without limitation claims based on warranty, breach
of contract, negligence or strict liability in tort), penalties, actions,
suits, costs, expenses and disbursements (including without limitation legal
fees and expenses) of whatsoever kind and nature, imposed on, incurred by or
asserted against any Century Indemnitee by any third party to the extent that
any such third party claim relates to or arises out of a breach by Buyer of its
obligations under this Agreement.
15.8. PROCEDURES FOR INDEMNIFICATION. If any action, suit or
proceeding shall be commenced against an indemnified party or parties by a
third party, or any claim, demand or assessment shall be asserted against an
indemnified party or parties by a third party, in each case resulting from or
arising out of the circumstances described above, which may result in liability
with respect to which the indemnified party or parties intends to seek
indemnification pursuant to Sections 15.6 or 15.7, the party from whom
indemnification is sought shall be notified as soon as practicable and shall
have the right to assume the entire control of the conduct, defense, compromise
and settlement thereof, at their own expense, including employment of counsel,
and, in connection therewith, each indemnified party shall cooperate fully in
such defense and make
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available to the indemnifying party (at the indemnifying party's own expense)
all relevant information under its control; provided that nothing herein shall
authorize an indemnifying party to assume the conduct, defense, compromise or
settlement of any matter involving a criminal proceeding or to agree on behalf
of any indemnified party to any non-monetary compromise or settlement
15.9. CONFIDENTIALITY. Except as required by Applicable Law,
neither party shall use or disclose to others at any time, except as is
necessary to its performance hereunder, any information regarding the other
party's plans, programs, plants, process, products, prices, costs, equipment,
operations, customers or the like. Each party shall restrict the knowledge of
all such information to as few as possible of its employees and, upon request of
the other party hereto, shall deliver to such other party secrecy agreements
executed by such employees in form and substance reasonably satisfactory to such
other party.
15.10. NOTICES.
15.10.1. Any and all notices, demands or other
communications (collectively, "NOTICES") required or permitted to be given by
either party to the other party under this Agreement shall be in writing and
shall be delivered by hand to the recipient party at that party's address set
forth below (other than (i) a Buyer's Notice pursuant to Section 3.1(a) or a
Buyer's Quality Shortfall Notice pursuant to Section 3.2(a), which shall be
delivered by hand or by telephonic facsimile transmission confirmed by telephone
to Seller's Reduction Plant manager, or (ii) a Seller's Notice pursuant to
Section 3.1(a) or a Seller's Quality Shortfall Notice pursuant to Section
3.2(a), which shall be delivered by hand or by telephonic facsimile transmission
confirmed by telephone to Buyer's Fabrication Plant manager), or sent by postage
prepaid certified mail (return receipt requested) or by telephonic facsimile
transmission, to the
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recipient party's address or facsimile number set forth below, and shall be
effective on the date the hand delivery or telephonic facsimile transmission is
received by the other party or, in the case of a Notice by mail, five days
after deposit in the mail. Any Notice given by telephonic facsimile
transmission shall be confirmed by postage prepaid certified mail (return
receipt requested). Notices shall be sent:
If to Seller:
Century Aluminum of West Virginia, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: President
Facsimile No.: (000) 000-0000
with a copy to:
Century Aluminum Company
0000 Xxxxxx Xxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
If to Buyer:
Pechiney Rolled Products, LLC
0000 Xxxx Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxxx Xxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Xxxxxx X. Xxxx, Xx., Esq.
Facsimile No.: (000) 000-0000
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15.10.2. Any change in a party's address or telex or
facsimile transmission number for the purposes of notice under this Section
15.10 shall be communicated to the other parties in the manner set forth in
this Section 15.10 for providing notice.
15.11. ILLEGALITY; SEVERABILITY.
15.11.1. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Applicable
Law or public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
15.11.2. If any provision of this Agreement is
prohibited or unenforceable in any jurisdiction, any such prohibition or
non-enforceability shall not by that fact alone render such provision invalid or
unenforceable in any other jurisdiction.
15.11.3. To the extent permitted by Applicable Law,
each of Seller and Buyer hereby waives any provisions of any Applicable Law
which render any provision of this Agreement prohibited or unenforceable in any
respect.
15.12. NO BROKERS. Each of Seller and Buyer warrants that
neither it nor any of its Affiliates has engaged any broker or finder with
respect to the transactions under this Agreement, and each agrees to indemnify
the other against, and agrees to protect the other from, any and all
liabilities, obligations, losses, damages, claims, penalties and disbursements
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(including without limitation legal fees and expenses) of whatsoever kind and
nature arising out of any breach by the indemnifying party of the foregoing
warranty or incurred by the other with respect to or resulting from any claims
of any broker or finder engaged by the indemnifying party or any of its
Affiliates.
15.13. HEADINGS. Headings used in this Agreement are for
convenience of reference only, and shall not limit or otherwise affect the scope
or interpretation of any provision.
15.14. COUNTERPARTS. This Agreement may be signed in any
number of counterparts, and any single counterparts or a set of counterparts
signed, in either case, by all the parties hereto shall constitute a full an
original agreement for all purposes.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their duly authorized representatives as of the date first
above written.
CENTURY ALUMINUM OF WEST VIRGINIA, INC.
By /s/ Xxxxxx X. Kitchen
--------------------------------------
Name: Xxxxxx X. Kitchen
------------------------------------
Title: Vice President
-----------------------------------
PECHINEY ROLLED PRODUCTS, LLC
By /s/ Xxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxx
------------------------------------
Title: Vice President and Treasurer
-----------------------------------
35
EXHIBIT A
1. SEPTEMBER MONTHLY DECLARATION (2.4)
The Monthly Quantity for September 1999 has been
fixed at [Confidential Information filed separately with the SEC] Lbs.
2. OCTOBER MONTHLY DECLARATION
Notwithstanding the provisions of Section 2.3, Buyer
shall deliver to Seller the October Monthly Declaration within 15 days after
the Closing Date (as defined in the Stock and Asset Purchase Agreement dated as
of July 26, 1999 among Century Aluminum Company, Seller and Buyer).
36
EXHIBIT B
Notwithstanding the provisions of Section 2.2, Buyer shall
deliver to Seller the Quarterly Forecast for the calendar quarter ending
December 31, 1999 within 15 days after the Closing Date.
37
EXHIBIT C
MOLTEN ALUMINUM SPECIFICATIONS
1. All Molten Aluminum sold by Seller to Buyer hereunder shall be
unalloyed molten primary aluminum produced at the Reduction Plant, and having
for each Month an average composition (such average for a Month shall be the
weighted average of the analysis of each crucible delivered during the Month)
in compliance with P1020A specifications as published by the Aluminum
Association, subject to a Gallium content not in excess of 0.08% and a Vanadium
content not in excess of 0.05%, and subject to the further provision below:
Sodium - maximum Sodium daily average not more than 40
parts per million; provided, that before
installation and operation of the TAC System or
comparable equipment as stipulated in Section 3.6
of this Agreement, the acceptable maximum Sodium
monthly average shall be 80 parts per million.
2. IRON CONTENT.
(a) The quantity of High Iron Aluminum contained in the Molten Aluminum
delivered hereunder in any Month shall not exceed 2% thereof.
Buyer shall cast all High Iron Aluminum delivered in any Month in
excess of the percentage specified above for the account of Buyer
pursuant to Section 8.1.
(b) The quantity of P4050 contained in the Molten Aluminum delivered
hereunder in any Month shall not exceed 12% thereof.
Buyer shall cast all P4050 delivered in any Month in excess of the
percentage specified above for the account of Buyer pursuant to
Section 8.1.
The average composition of the Molten Aluminum delivered for each Month
determined for purposes of Section 1 of this Exhibit C shall include the High
Iron Aluminum and P4050 delivered during such Month up to the percentage
thresholds set forth in subsections (a) and (b), respectively, of this
Section 2.
3. CRUCIBLE DELIVERIES
Temperature of Molten Aluminum delivered to the scales in the hot metal tunnel
shall be equal to or greater than 900(Degrees)C.
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The average weight of the crucibles calculated on a calendar week basis will be
approximately 7,500 pounds, but may range as low as 5,000 pounds. In no event
will a crucible be overfilled (closer than six inches to the top).
It is understood that Molten Aluminum, even after skimming at the Cast House
tunnel scale, may contain some drosses and electrolytic bath. In order to
reduce Sodium and such content of drosses and electrolytic bath, Seller shall
purchase, install and operate TAC System and associated skimming equipment as
per Section 3.6 hereof. The remaining quantity of drosses and electrolytic bath
will be determined every Month by difference of weight between the sows cast
for Seller during the given Month and the molten primary aluminum used for this
purpose and shall be expressed as a percentage of the molten primary aluminum
("Pct"). The Pct shall be used for the given Month as Pct in the invoicing
formula as per Section 7.1(i) hereof.
4. QUALITY
If Seller foresees any change in raw material (alumina, coke, pitch, cast iron,
cryolite, bath) Seller will inform the Buyer by written notice as soon as
practical, typically at least 30 days prior notice except in the case of
emergencies, in which case Seller shall give notice as soon as practical in
light of the emergency. In the case of a significant change, Seller and Buyer
may agree to conduct a trial, processing a trial amount of material to ensure
the material so changed will not result in molten primary aluminum or sows, as
the case may be, not meeting the Molten Aluminum Specifications or Sow
Specifications, as the case may be. If it is demonstrated by Buyer that the raw
material change being evaluated causes a material adverse impact on its
processing, despite the fact that the molten primary aluminum or sows, as the
case may be, comply with the Molten Aluminum Specifications or the Sow
Specifications, as the case may be, Seller will discontinue use of that raw
material, provided reasonable alternatives exist.
Seller will keep track of all significant process parameters for a period of
five years.
Seller will develop and keep an up-to-date quality survey plan, which will be
discussed with Buyer. Buyer and Seller will put together a "customer/supplier"
committee whose purposes will be to xxxxxx positive customer/supplier
communications, provide an environment for continuous improvement in both
areas, and who will perform process quality audits (to include reduction and
sowing, and other related process steps). It is understood that such quality
audits may be restricted from certain areas or items due to confidentiality
issues.
5. WEEKLY AND MONTHLY REPORTS
To monitor quality and to provide a basis for adjustments to the price
according to the provisions of this Exhibit C, Buyer will prepare and deliver
to Seller weekly and monthly reports showing:
Quantity of Molten Aluminum delivered by Seller.
Percentage of drosses and electrolytic bath in Molten Aluminum.
Weekly average analysis of molten primary aluminum composition.
Average composition of Molten Aluminum and basis for any rebates related to
average composition.
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Distribution of composition by grade, depicting percentage of purchased Molten
Aluminum meeting the P4050 specifications and purchased Molten Aluminum
with an iron content exceeding the P4050 specifications.
- Quantity of molten primary aluminum poured as sow.
Quantity of Sows and sows poured - to be weighed on certified scales (such
scales are currently available in the Cast House).
Average analysis of Sows.
Individual analysis of heats (one heat equals one crucible, which may produce
up to five or six Sows).
Distribution of trace elements by grade of Molten Aluminum (e.g. P1020A,
P1020B, P1020C and P1020D) depicting the percentage of Molten Aluminum by
grade and the basis for any castings of offgrade Molten Aluminum pursuant
to this Exhibit C.
Any other relevant information as may be agreed by the parties.
6. RELATED MATTERS
Buyer and Seller agree to develop further procedures for the handling of Molten
Aluminum, treatment of mobile equipment, Sow molds, crucibles, and other such
procedures as may be necessary to operate efficiently and cooperatively under
this Agreement.
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EXHIBIT D
SOW SPECIFICATIONS
COMPOSITION SPECIFICATIONS: All Sows cast by Buyer for Seller in any
Month hereunder shall be unalloyed primary aluminum having for each Month an
average composition in compliance with P1020A specifications as published by
the Aluminum Associations, subject to a Gallium content not in excess of 0.08%
and a Vanadium content not in excess of 0.05% (the "SOW SPECIFICATIONS"),
subject to the further provisions below.
All sows (other than Sows) cast by Buyer for Seller shall be unalloyed
primary aluminum having for each Month the same average specifications as the
molten primary aluminum (other than Molten Aluminum) delivered by Seller to
Buyer during such Month.
WEIGHT AND SHAPE: Sows and sows weighing the nominal standard weight
of 1,500 Pounds each, in Seller's molds and marked in accordance with P1020A
specifications.
OTHER QUALITY REQUIREMENTS:
1. Each Sow and each sow shall be skimmed and poured so that the
surface is free of surface and/or entrained salts, excessive
skim, surface contamination, corrosion, or seams and folds
caused by multiple pours.
2. Buyer shall cast Sows and/or sows for Seller with the same
care and to the same standards it uses in casting sows for
its own use.
3. Each Sow and sow shall clearly display the heat number on its
side.
4. Every shipment shall be accompanied by chemical analysis for
each heat. Each shipment shall be accompanied with a sample
button for each heat.
5. Each Sow and sow shall be poured level so it can be stacked
properly.
6. There will be no excessive splashing on the sides of Sows or
sows.
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