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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 1,1999
Accuride Corporation
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(Exact Name of Registrant as Specified in Charter)
Delaware 333-50239 61-1109077
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(State or Other (Commission (IRS Employer
Jurisdiction of Incorporation) File Number) Identification No.)
2315 Adams Lane, Henderson, Kentucky 42420
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (502) 826-5000
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 1, 1999, Accuride Corporation (the "Company") acquired Kaiser
Aluminum & Chemical Corporation's ("Kaiser") 50% interest in AKW L.P., a
Delaware limited partnership ("AKW"), pursuant to the terms of a Purchase
Agreement by and among the Company, Kaiser and Accuride Ventures, Inc., a
wholly owned subsidiary of Accuride (the "Acquisition", which is filed
herewith as Exhibit 2.1 and is incorporated herein by reference). In
connection with the Acquisition, AKW and Kaiser amended and restated an
existing lease agreement pursuant to which AKW leases certain property from
Kaiser (a copy of the amended and restated lease is filed herewith as Exhibit
10.1 and is incorporated herein by reference). A copy of the press release
dated April 1, 1999 issued by the Company with respect to the Acquisition is
filed herewith as Exhibit 99.1 and is incorporated herein by reference. AKW
was formed in 1997 as a 50-50 joint venture between Kaiser and Accuride to
design, manufacture, and sell heavy-duty aluminum wheels. The Acquisition
gives the Company, through its wholly owned subsidiary, 100% control of AKW.
Total consideration paid to Kaiser for the 50% interest was approximately $70
million, which was determined through arms-length negotiations between the
parties.
The Company financed the Acquisition through the Company's $140.0
million senior secured revolving credit facility, which is provided by a
syndicate of banks and other financial institutions led by Citicorp USA,
Inc., as administrative agent, Citicorp Securities, Inc., as arranger,
Bankers Trust Company, as syndication agent, and Wells Fargo Bank, as
documentation agent.
Except as set forth herein, no material relationships exist between
Kaiser and the Company or any of the Company's affiliates, directors,
officers, or any associate of any director or officer of the Company.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
The financial statements required pursuant to Rule 3-05 of Regulation S-X
will be provided within 60 days of the date of the filing of this Form 8-K.
(b) Pro forma financial information.
The financial information required pursuant to Article 11 of Regulation S-X
will be provided within 60 days of the date of the filing of this Form 8-K.
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(c) Exhibits
<TABLE>
<CAPTION>
Exhibit Number Description
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<S> <C>
2.1 Purchase Agreement
10.1 Amended and Restated Lease Agreement
99.1 Press release announcing completion of the Acquisition.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ACCURIDE CORPORATION
Dated: April 8, 1999 By: /s/ William P. Greubel
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William P. Greubel
President and Chief Executive Officer
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PURCHASE AGREEMENT
PURCHASE AGREEMENT ("AGREEMENT") dated as of April 1, 1999, by and
among ACCURIDE VENTURES, INC., a Delaware corporation and wholly-owned
subsidiary of Accuride Corporation ("ACCURIDE SUB"), ACCURIDE CORPORATION, a
Delaware corporation ("ACCURIDE"), and KAISER ALUMINUM & CHEMICAL
CORPORATION, a Delaware corporation ("KAISER").
W I T N E S S E T H:
WHEREAS, Accuride, acting through Accuride Sub, and Kaiser formed AKW
General Partner L.L.C., a Delaware limited liability company (the "GENERAL
PARTNER"), to act as the general partner of AKW L.P., a Delaware limited
partnership (the "COMPANY"); Accuride Sub and Kaiser each own a fifty percent
(50%) membership interest in the General Partner; and Accuride Sub, Kaiser
and Accuride (in its capacity as guarantor of Accuride Sub) entered into a
Limited Liability Company Agreement dated as of May 1, 1997 (the "LIMITED
LIABILITY COMPANY AGREEMENT"), providing for the operation of the General
Partner and for certain rights and restrictions applicable to the members
thereof;
WHEREAS, Accuride Sub and Kaiser each own a forty-nine percent (49%)
limited partnership interest in the Company; the General Partner owns a two
percent (2%) partnership interest in the Company; and Accuride Sub, Kaiser,
the General Partner and Accuride (in its capacity as guarantor of Accuride
Sub) entered into the Limited Partnership Agreement of AKW L.P., dated as of
May 1, 1997 (the "LIMITED PARTNERSHIP AGREEMENT"), providing for the
operation of the Company and for certain rights and restrictions applicable
to the partners thereof;
WHEREAS, Accuride desires to purchase, and Kaiser desires to sell,
Kaiser's fifty percent (50%) Interest (as defined in the Limited Liability
Company Agreement) in the General Partner and Kaiser's forty-nine percent
(49%) Interest (as defined in the Limited Partnership Agreement) in the
Company (collectively, the "KAISER INTERESTS") upon the terms and subject to
the conditions of this Agreement, so that upon consummation of the
Transactions (as defined below), Accuride Sub and Accuride shall collectively
hold one hundred percent (100%) of the Interest (as defined in the Limited
Liability Company Agreement) in the General Partner and a ninety-eight
percent (98%) Interest (as defined in the Limited Partnership Agreement) in
the Company;
NOW, THEREFORE, the parties, intending to be legally bound hereby,
agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings set
forth below or in the Section of this Agreement referred to below:
"ACCURIDE" has the meaning given in the first paragraph hereof.
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"ACCURIDE ADMINISTRATIVE SERVICES AGREEMENT" means the Accuride
Administrative Services Agreement between Accuride and the Company dated as
of May 1, 1997.
"ACCURIDE SALES AND MARKETING AGREEMENT" means the Accuride Sales and
Marketing Agreement between Accuride and the Company dated as of May 1, 1997.
"ACCURIDE TECHNICAL SERVICES AGREEMENT" means the Accuride Technical
Services Agreement between Accuride and the Company dated as of May 1, 1997.
"ADDITIONAL PREMISES" has the meaning set forth in the Restated Lease.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control
with, such Person. Control of any Person shall consist of the power to
direct the management and policies of such Person whether through the
ownership of voting securities or by contract or otherwise and shall be
deemed to exist upon the ownership of securities entitling the holder thereof
to exercise more than 50% of the voting power in the election of directors
(or other similar positions) of such Person.
"AGREEMENT" has the meaning given in the first paragraph hereof.
"APPLICABLE LAW" means all applicable provisions of all constitutions,
treaties, statutes, laws (including, but not limited to, the common law),
rules, regulations, ordinances, codes or orders of any Governmental Authority
and of all orders, decisions, injunctions, judgments, awards and decrees or
consents of or agreements with any Governmental Authority.
"BUSINESS DAY" means any calendar day other than a Saturday or Sunday
or a day on which either state or national banks in the States of California,
Kentucky or New York are not open for the conduct of normal banking business.
"CASH ADJUSTMENT" has the meaning given in Section 3.4.
"CASH ADJUSTMENT STATEMENT" has the meaning given in Section 3.5.
"CLAIM" has the meaning given in Section 7.1.
"CLOSING" has the meaning given in Section 3.1.
"CLOSING DATE" has the meaning given in Section 3.1.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor act thereto, and, to the extent applicable, any
Treasury Regulations promulgated thereunder.
"COMPANY" has the meaning given in the recitals.
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"COMPANY MATERIAL ADVERSE EFFECT" means any event, fact, effect or
change which, individually or in the aggregate, has, or is reasonably likely
to have, a material adverse effect on the condition (financial or otherwise),
business, prospects, results of operations, assets, liabilities or operations
of the Company taken as a whole.
"CONTRIBUTION AGREEMENT" means the Contribution Agreement among
Accuride, Kaiser, the Company and the General Partner dated as of May 1, 1997.
"DAILY RATE" shall be two and one-half percentage points over the one
month London Interbank Offered Rate as reported in The Wall Street Journal on
the date of this Agreement divided by three hundred sixty (360).
"ENVIRONMENTAL COMPLIANCE PLAN" has the meaning given in Section 6.3
of the Contribution Agreement.
"ERIE LEASE AGREEMENT" means the Lease Agreement between Kaiser and
the Company dated as of May 1, 1997.
"FORMATION AGREEMENTS" means the Contribution Agreement, the Limited
Liability Company Agreement, the Limited Partnership Agreement, the Interest
Purchase Agreement, the Erie Lease Agreement, the Accuride Administrative
Services Agreement, the Accuride Technical Services Agreement, the Kaiser
Technical Services Agreement, the Accuride Sales and Marketing Agreement, the
Kaiser Production Services Agreement, the Kaiser Administrative Services
Agreement and any other "Ancillary Agreements" (as defined in Article I of
the Contribution Agreement) entered into by Kaiser, Accuride, Accuride Sub,
the Company and/or the General Partner in connection with the transactions
contemplated by the Contribution Agreement.
"GENERAL PARTNER" has the meaning given in the recitals.
"GOVERNMENTAL AUTHORITY" means any nation or political subdivision
thereof, including any state, county or municipality; and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any of the foregoing, including, without
limitation, any legislature, elected official, authority, agency, department,
board, commission, court, tribunal or instrumentality.
"GOVERNMENTAL AUTHORIZATIONS" has the meaning given in Section 4.3.
"GOVERNMENTAL ORDER" means any statute, rule, regulation, order,
judgment, injunction, decree, stipulation or determination enacted, issued,
enforced or entered by any Governmental Authority of competent jurisdiction.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended from time to time, and the regulations promulgated
thereunder.
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"INDEMNIFIED PARTY" has the meaning given in Section 7.2.
"INDEMNIFYING PARTY" has the meaning given in Section 7.2.
"INSURANCE POLICIES" has the meaning given in Section 4.8.
"INTEREST PURCHASE AGREEMENT" means the AKW L.P. Interest Purchase
Agreement dated as of May 1, 1997, between Accuride Sub and Kaiser.
"INTERIM PERIOD" has the meaning given in Section 3.4.
"JOINT VENTURE PRODUCTS" means (i) aluminum wheels 16" in diameter and
larger primarily for light, medium and heavy duty trucks, trailers and buses
(classes 1-8), although certain of such wheels may also be sold into the
automotive original equipment manufacturer market; (ii) tire molds for
automotive and light-medium-heavy truck applications, as to each of clauses
(i) and (ii) above, produced by forging, fabricating or casting for marketing
and sale worldwide, including without limitation in the original equipment
manufacturer market, after-market and repair and replacement markets and
(iii) such additional or different products as the Members Committee has
approved pursuant to Section 6.4 of the Limited Liability Company Agreement
prior to the Closing Date. Notwithstanding the foregoing, Joint Venture
Products shall not include (i) motorcycle wheels and wheel parts, (ii) wheel
centers for any applications, (iii) forged one piece wheel blanks sold to
other wheel manufacturers, and (iv) finished wheels for the automotive
aftermarket market currently produced or being contemplated for production by
Kaiser.
"KAISER" has the meaning given in the first paragraph hereof.
"KAISER ADMINISTRATIVE SERVICES AGREEMENT" means the Kaiser
Administrative Services Agreement between Kaiser and the Company dated as of
May 1, 1997.
"KAISER INTERESTS" has the meaning given in the recitals.
"KAISER MARKS" shall have the meaning give in Section 4.15.
"KAISER PRODUCTION SERVICES AGREEMENT" means the Kaiser Production
Services Agreement between Kaiser and the Company dated as of May 1, 1997.
"KAISER TECHNICAL SERVICES AGREEMENT" means the Kaiser Technical
Services Agreement between Kaiser and the Company dated as of May 1, 1997.
"KNOWLEDGE" means (i) with respect to Kaiser, the actual knowledge of
those officers and employees of Kaiser listed on SCHEDULE 1(a), and (ii) with
respect to Accuride and Accuride Sub, the actual knowledge of those officers
and employees of Accuride listed on SCHEDULE 1(a), in each instance after
such investigation as such officer or employee deemed to be reasonably
necessary and appropriate.
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"LIEN" means any mortgage, lien, debt, pledge, security interest,
encumbrance, assessment, restriction, charge or other adverse claim or
interest of every nature. With respect to the Kaiser Interests, "Lien" shall
also include any agreement limiting or restricting Kaiser's right to vote,
transfer or otherwise dispose of the Kaiser Interests.
"LIMITED LIABILITY COMPANY AGREEMENT" has the meaning given in the
recitals.
"LIMITED PARTNERSHIP AGREEMENT" has the meaning given in the recitals.
"MEMBERS COMMITTEE" has the meaning given in the Limited Liability
Company Agreement.
"NONREFUNDABLE PAYMENT" has the meaning given in Section 3.2.
"PARTNERSHIP AGREEMENTS" means the Limited Liability Company Agreement
and the Limited Partnership Agreement.
"PERMITTED REAL PROPERTY LIENS" has the meaning given in Section 4.10.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, firm, association, public body,
governmental authority, trust or other entity.
"PHASE I IMPROVEMENTS" has the meaning given in the Contribution
Agreement.
"PROPOSED ACQUISITION TRANSACTION" has the meaning given in Section 8.14.
"PROPRIETARY RIGHTS" means any and all United States and foreign: (i)
patents (including design patents, industrial designs and utility models) and
patent applications (including docketed patent disclosures awaiting filing,
reissues, divisions, continuations-in-part and extensions), patent disclosure
awaiting filing determination, inventions and improvements thereto made or
developed prior to the Closing; (ii) trademarks, service marks, trade names,
trade dress, logos, business and product names, slogans, and registrations
and applications for registration thereof; (iii) copyrights (including
software) and registrations thereof; (iv) mask work rights and registrations
thereof; (v) inventions, processes, designs, formulae, trade secrets,
know-how and industrial models, confidential and technical information,
manufacturing, engineering and technical drawings, product specifications and
confidential business information; (vi) intellectual property rights similar
to any of the foregoing; (vii) copies and tangible embodiments thereof (in
whatever form or medium, including electronic media); and (viii) licenses
granting any rights with respect to any of the foregoing.
"PURCHASE PRICE" has the meaning given in Section 3.3.
"RECALL CAMPAIGN" means the recalling and replacing of wheels
identified in connection with the notice submitted to the National Highway
Safety Administration on or about April 17, 1998.
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"REFUND CLAIMS" has the meaning given in Section 3.9.
"RESTATED LEASE" means the Amended and Restated Lease Agreement
between Kaiser and the Company, to be dated as of the Closing Date,
substantially in the form of Exhibit A hereto.
"STRATEGIC PLAN" means the draft of the Strategic Plan (as defined in
the Limited Liability Company Agreement) presented by the Company to the
Members Committee at its December 1998 meeting.
"SUBSTANTIAL DETRIMENT" has the meaning given in Section 6.1(a).
"SURPLUS ASSETS" has the meaning given in Bill of Sale attached hereto
as Exhibit C.
"TAXES" means any tax, duty, fee, levy, impost, assessment or charge
of any nature, together with all interest or penalties thereon and additions
thereto, imposed by any Governmental Authority, whether computed on a
separate, consolidated, unitary, combined or any other basis, or any
liability for the payment of any of the foregoing (including without
limitation as a result of any express or implied obligation to indemnify any
other Person).
"TRANSACTIONS" means the transactions contemplated by this Agreement
and the Restated Lease.
"TREASURY REGULATIONS" means the federal income tax regulations,
including any temporary or proposed regulations, promulgated under the Code,
as such may be amended from time to time.
ARTICLE II
SALE AND PURCHASE
2.1 SALE AND PURCHASE. Upon the terms and subject to the
conditions of this Agreement, and in reliance upon the representations,
warranties and covenants contained herein, at the Closing Accuride will
purchase, and Kaiser shall transfer, sell and deliver to Accuride, all right,
title and interest of Kaiser in and to the Kaiser Interests and Kaiser shall
transfer, sell and deliver to the Company, all right, title and interest of
Kaiser in and to the Surplus Assets, in each instance, free and clear of all
Liens, other than Liens relating to, or otherwise granted by or on behalf of,
Accuride or Accuride Sub.
ARTICLE III
THE CLOSING
3.1 PLACE AND DATE. Subject to Section 9.1(ii), the closing of the
sale and purchase of the Kaiser Interests and Surplus Assets (the "CLOSING")
shall take place on a date within three (3)
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Business Days after Accuride obtains the financing necessary to satisfy the
condition to Closing set forth in Section 6.2(a) of this Agreement, unless
another date or time shall have been agreed to in writing by Accuride,
Accuride Sub and Kaiser (the "CLOSING DATE"). For all purposes relating to
their rights and obligations under this Agreement (other than the rights and
obligations with respect to the Nonrefundable Payment), the parties shall
treat the Closing and all Transactions contemplated herein as having occurred
simultaneously and become effective as of midnight at the beginning of the
actual date the Closing takes place.
3.2 NONREFUNDABLE PAYMENT. Upon the execution of this Agreement,
Accuride shall pay or cause to be paid to Kaiser an irrevocable,
nonrefundable payment in the amount of Thirty-Five Million Dollars
($35,000,000), payable in cash by wire transfer of immediately available
funds to the account or accounts specified in writing by Kaiser (the
"NONREFUNDABLE PAYMENT").
3.3 PURCHASE PRICE; PAYMENT. Upon the terms and subject to the
conditions of this Agreement, at the Closing, Accuride shall pay or cause to
be paid to Kaiser for the Kaiser Interests and the Surplus Assets a purchase
price of Seventy One Million Dollars ($71,000,000) as the same shall be
adjusted as provided for in Section 3.4 of this Agreement (the "PURCHASE
PRICE"). At the Closing, the Nonrefundable Payment shall be credited against
the Purchase Price and the balance of the Purchase Price shall be payable in
cash by wire transfer of immediately available funds to the account or
accounts specified in writing by Kaiser.
3.4 PURCHASE PRICE ADJUSTMENTS. The Purchase Price shall be
adjusted in an amount equal to the sum of (i) the aggregate cash infusions
made by Kaiser into the Company during the period from and including January
1, 1999, through March 31, 1999 (the "INTERIM PERIOD"), less the aggregate
cash distributions from the Company to Kaiser during the Interim Period (the
"CASH ADJUSTMENT"), plus (ii) an amount equal to the product of multiplying
(a) the sum of Seventy One Million Dollars ($71,000,000) and the Cash
Adjustment, less the Nonrefundable Payment, by (b) the product of the Daily
Rate multiplied the number of days from and including April 1, 1999, to, but
not including, the Closing Date, if the Closing Date is not April 1, 1999.
3.5 CASH ADJUSTMENT. As soon as reasonably practicable, but no
later than three (3) Business Days following the execution of this Agreement,
Kaiser shall provide Accuride with a statement calculating the Cash
Adjustment along with supporting detail and backup (the "CASH ADJUSTMENT
STATEMENT"). The amount set forth in the Cash Adjustment Statement shall be
binding on Accuride and Kaiser for all purposes unless Accuride gives written
notice of disagreement with the information reflected on the Cash Adjustment
Statement to Kaiser within three (3) Business Days after the receipt by
Accuride of the Cash Adjustment Statement or the last revision thereof by
Kaiser, specifying in reasonable detail, insofar as possible, the nature and
extent of such disagreement. If Accuride and Kaiser are unable to resolve
any such disagreement within three (3) Business Days after Accuride gives
Kaiser written notice thereof, the disagreement shall be referred for final
determination to any independent accounting firm of national reputation
mutually acceptable to Accuride and Kaiser. The determination of such
accounting firm shall be conclusive, nonappealable and binding upon Accuride
and Kaiser for all purposes. Accuride and Kaiser shall each pay the fees and
disbursements of their respective internal and independent accountants and
other personnel incurred in the initial preparation,
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review and final determination of the Cash Adjustment Statement. The fees and
expenses of such firm mutually selected by Accuride and Kaiser in connection
with the final determination of any disagreement submitted pursuant to the
terms hereof shall be shared equally by Accuride and Kaiser.
3.6 TRANSFER OF KAISER INTERESTS AND THE SURPLUS ASSETS. Upon the
terms and subject to the conditions of this Agreement, at the Closing, Kaiser
shall deliver to Accuride and the Company such instruments as may be
necessary or desirable to effect transfer, in form and substance reasonably
acceptable to Accuride, and take all such other actions as may be necessary
or desirable to convey and effectively vest (i) in Accuride good title in and
to the Kaiser Interests, free and clear of any Liens other than Liens
relating to, or otherwise granted by or on behalf of, Accuride or Accuride
Sub and to permit Accuride to become the substitute limited partner of the
Company and the substitute member of the General Partner pursuant to the
terms of the Limited Partnership Agreement and the Limited Liability Company
Agreement, respectively, and (ii) in the Company good title in and to the
Surplus Assets, free and clear of any Liens other than Liens relating to, or
otherwise granted by or on behalf of, Accuride or Accuride Sub. No portion
of the Kaiser Interests or Surplus Assets shall be transferred or conveyed,
or otherwise deemed to have been transferred or conveyed, by Kaiser hereunder
prior to the Closing Date.
3.7 [intentionally left blank]
3.8 CLOSING OF BOOKS. Whether or not a technical termination of
the Company results under Section 708 of the Code as a result of the
consummation of the Transactions, the Company shall have an actual closing of
the books as of the Closing Date. For the short period ending on the Closing
Date, all income, gains, profits and losses, and deductions of the Company
shall be allocated to its partners in accordance with the Limited Partnership
Agreement. Similarly, whether or not a technical termination of the General
Partner results under Section 708 of the Code as a result of the consummation
of the Transactions, the General Partner shall have an actual closing of the
books as of the Closing Date. For the short period ending on the Closing
Date, all income, gains, profits and losses, and deductions of the General
Partner shall be allocated to its members in accordance with the Limited
Liability Company Agreement.
3.9 RIGHTS WITH RESPECT TO NONREFUNDABLE PAYMENT. In the event
that the Transactions do not close for any reason other than a default by
Kaiser of its obligations under Section 6.2 of this Agreement, Kaiser shall
retain the Nonrefundable Payment as liquidated damages (and not as a penalty)
as consideration for other provisions contained in this Agreement, including,
but not limited to, Kaiser providing greater management control to Accuride
as provided in Section 8.8 hereof and Kaiser's agreement to the further
postponing of the Buy/Sell Option as provided in Section 8.22 hereof. In
such event, Accuride and Accuride Sub hereby (i) voluntarily and knowingly,
fully, finally, completely and forever waive and relinquish any and all
interests in the Nonrefundable Payment and any claims, actions, demands and
causes of action of whatever kind or character, whether in statutory or
common law, whether in law or in equity, and whether under any existing or
future theory of recovery, which either of them have, might have or might
claim with respect to the refund or return of the Nonrefundable Payment,
including rights of offset (collectively, "REFUND CLAIMS"), (ii) remise,
acquit, release and forever discharge Kaiser from
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any and all Refund Claims, and (iii) agree not to assert or otherwise
directly or indirectly pursue any Refund Claims now or at any time in the
future. Notwithstanding Kaiser's receipt of the Nonrefundable Payment, no
portion of the Kaiser Interests or Surplus Assets shall be transferred or
conveyed, or otherwise deemed to have been transferred or conveyed, by Kaiser
hereunder prior to the Closing Date. Similarly, nothing contained in this
Section 3.9 shall be deemed to preclude Accuride or Accuride Sub from
asserting claims against Kaiser (other than Refund Claims) arising from
Kaiser's breach of any of the terms or conditions contained herein or in
connection with the Transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF KAISER
Kaiser represents and warrants to Accuride Sub and Accuride:
4.1 CORPORATE EXISTENCE, POWER AND AUTHORIZATION. Kaiser is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware and has all requisite corporate power and
authority to execute and deliver this Agreement and the Restated Lease, to
perform its obligations hereunder and thereunder and to consummate the
Transactions. The execution, delivery and performance of this Agreement and
the Restated Lease and the consummation of the Transactions have been duly
authorized by the Board of Directors of Kaiser and no further corporate
actions or proceedings on Kaiser's part are necessary to authorize the
execution and delivery of this Agreement and the Restated Lease, the
performance of the obligations hereunder or thereunder or the consummation of
the Transactions. This Agreement has been duly executed and delivered by
Kaiser and constitutes the valid and binding obligation of Kaiser (assuming
due execution and delivery by the other parties hereto), enforceable against
Kaiser in accordance with its terms, except insofar as enforceability may be
limited by bankruptcy, insolvency, moratorium or other laws which affect
creditors' rights and remedies generally and by principles of equity. Upon
the Closing, the Restated Lease and all instruments of conveyance and other
documents to be executed and delivered by Kaiser shall be duly executed and
delivered by Kaiser and shall constitute valid and binding obligations of
Kaiser (assuming due execution and delivery by the other parties thereto),
enforceable against Kaiser in accordance with their respective terms, except
insofar as enforceability may be limited by bankruptcy, insolvency,
moratorium or other laws which affect creditors' rights and remedies
generally and by principles of equity.
4.2 NO CONFLICTS; CONSENTS AND APPROVALS.
(a) The execution, delivery and performance of this Agreement and
the Restated Lease and the consummation of the Transactions do not result in
(i) any conflict with the certificate of incorporation or bylaws of Kaiser,
or (ii) any breach or violation of, or default under, any Applicable Law or
any mortgage, agreement, deed of trust, indenture, lease, contract or any
other instrument to which Kaiser is a party or by which Kaiser or its
properties or assets (including without limitation the Kaiser Interests) are
bound, except any breach, violation or default which could not reasonably be
expected to have a material adverse effect on the ability of
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Kaiser to perform its obligations under this Agreement or the Restated Lease.
(b) No consent, approval or authorization of, or filing with, any
Governmental Authority or any other third party is required on the part of
Kaiser in connection with the execution and delivery by Kaiser of this
Agreement or the Restated Lease or the consummation by Kaiser of the
Transactions, other than any consents, approvals, authorizations or filings,
the failure of which to obtain would not, individually or in the aggregate,
have a material adverse effect on the ability of Kaiser to perform its
obligations under this Agreement or the Restated Lease.
4.3 GOVERNMENTAL AUTHORIZATIONS; COMPLIANCE WITH LAW. All
approvals, permits, certificates, qualifications, authorizations, licenses,
franchises, consents, orders and registrations of all Government Authorities
(collectively, "GOVERNMENTAL AUTHORIZATIONS") which are necessary for the
lawful consummation by Kaiser of the Transactions have been obtained and are
in full force and effect, or will be obtained and will be in full force and
effect by the Closing Date. There are no proceedings pending or, to the best
of Kaiser's Knowledge, threatened which could reasonably be expected to
result in the revocation, cancellation, suspension or modification of any
Governmental Authorization.
4.4 LITIGATION. There are no pending or, to the best of Kaiser's
Knowledge, threatened judicial or administrative actions, proceedings or
investigations which (i) would reasonably be expected, individually or in the
aggregate, to have a material adverse effect on the ability of Kaiser to
consummate the Transactions or (ii) question the validity of this Agreement,
the Restated Lease or any action taken or to be taken by Kaiser in connection
herewith or therewith.
4.5 BROKERS. All negotiations relating to this Agreement, the
Restated Lease and the Transactions have been carried out without the
intervention of any Person acting on behalf of Kaiser in such manner as to
give rise to any valid claim against Accuride or Accuride Sub for any
brokerage or finder's commission, fee or similar compensation.
4.6 DISCLOSURE. No representation, warranty or statement by Kaiser
in this Agreement or the Restated Lease contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein and therein not misleading.
4.7 TITLE. On the Closing Date, Kaiser will be the legal and
beneficial owner of, and will have the complete and unrestricted power and
the unqualified right to transfer, and will transfer, the Kaiser Interests
and Surplus Assets, free and clear of all Liens, other than Liens relating
to, or otherwise granted by or on behalf of, Accuride or Accuride Sub. Upon
the delivery of and payment for the Kaiser Interests and Surplus Assets as
provided in this Agreement, Accuride will acquire good and valid title to the
Kaiser Interests and the Company will acquire good and valid title to the
Surplus Assets, in each instance free and clear of all Liens, other than
Liens relating to, or otherwise granted by or on behalf of, Accuride or
Accuride Sub.
4.8 INSURANCE. To the best of Kaiser's Knowledge, (i) the policies
or binders of
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insurance as identified on Schedule 4.8 of which the Company is the owner,
insured or beneficiary (the "INSURANCE POLICIES") are in full force and
effect on the date hereof and, (ii) except as otherwise set forth on Schedule
4.8, shall be kept in full force and effect through April 30, 1999.
4.9 TAX MATTERS. Kaiser has acted as the tax matters partner under
the Partnership Agreements in accordance with the terms thereof. To the
best of Kaiser's Knowledge, (i) the Company and the General Partner have not
received a ruling from any taxing authority or signed an agreement with any
taxing authority that could reasonably be expected to have a Company Material
Adverse Effect, and (ii) there is no expectation that any taxing authority
may claim or assess any new or additional Taxes payable by the Company or the
General Partner for any period ending on or prior to the Closing Date that
could reasonably be expected to have a Company Material Adverse Effect.
4.10 ADDITIONAL PREMISES. To the best of Kaiser's Knowledge, there
is no violation of any restriction, condition, covenant or agreement
applicable to or affecting the Additional Premises, any part thereof or use
thereof, contained in any deed, subdivision map or other instrument, except
which, individually or in the aggregate, would not reasonably be expected to
have a Company Material Adverse Effect. Kaiser has good, valid and
marketable fee simple title to the Additional Premises, free and clear of all
Liens, except for (i) Liens and leases set forth on Schedule 3.4(b) to the
Contribution Agreement, (ii) liens for Taxes not yet due and payable or which
are being contested in good faith by appropriate proceedings and (iii)
imperfections of title which are not substantial in character, amount or
extent (in relation to the particular parcel) and that individually or in the
aggregate do not and would not interfere with the use of the Additional
Premises by the Company for the conduct of its business as currently
conducted (the Liens referred to in clause (i) and (ii) above being referred
to collectively as "PERMITTED REAL PROPERTY LIENS"). To the best of Kaiser's
Knowledge, Kaiser and/or the Company have all easements, rights of way and
similar authorizations required for the ownership and use of the Additional
Premises by the Company for the conduct of its business as currently
conducted. Upon execution and delivery of the Restated Lease, the Company
shall have the exclusive right to use and occupy the Additional Premises,
except as otherwise set forth in the Restated Lease.
4.11 CERTAIN PAYMENTS. Neither Kaiser nor any of its directors,
officers or agents has, directly or indirectly, (a) made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback or other payment to
any Person, private or public, regardless of form, whether in money, property
or services, for or in respect of the Company or any Affiliate of the Company
in connection with the business conducted by the Company, (i) to obtain
favorable treatment in securing business, (ii) to pay for favorable treatment
for business secured, (iii) to obtain special concessions or for special
concessions already obtained or (iv) in violation of any Applicable Law, or
(b) established or maintained any fund or asset for or in respect of the
Company or any Affiliate of the Company in connection with the business
conducted by the Company that has not been recorded in the books and records
of the Company.
4.12 CLAIMS. Following the Closing, to the best of Kaiser's
Knowledge, Kaiser will not have any outstanding claims against Accuride,
Accuride Sub or any of their respective Affiliates,
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including the Company and the General Partner, arising from or in connection
with the breach or alleged breach of any agreement between or among Kaiser
and Accuride, Accuride Sub or any of their respective Affiliates, including
claims arising under or in connection with the Partnership Agreements.
4.13 PHASE I IMPROVEMENTS. To the best of Kaiser's Knowledge,
Kaiser has satisfied its obligations in all material respects under Section
6.4 ("Covenants of Kaiser - Phase I Improvements") of the Contribution
Agreement. In addition, to the best of its knowledge, upon the Closing of the
Transactions, Kaiser will have satisfied any known obligations to the Company
and the General Partner under the Contribution Agreement and the Erie Lease
Agreement and with respect to the Landlord's Work (as defined in the Erie
Lease Agreement).
4.14 AGREEMENTS. Schedule 4.14 sets forth all existing material
agreements, contracts, leases, purchase orders, undertakings, understandings,
covenants not to compete, confidentiality agreements, licenses, obligations
or other commitments, whether oral or written, currently in effect between
Kaiser and any of its subsidiaries, on one hand, and Accuride, Accuride Sub,
the Company or the General Partner, on the other hand.
4.15 KAISER'S PROPRIETARY RIGHTS. To the best of Kaiser's
Knowledge, except as contributed to the Company as part of the Kaiser Assets
(as defined in the Contribution Agreement) and except in connection with the
use of Kaiser trademarks, including trademarks, service marks, trade names,
trade dress, logos, business and product names and slogans using or
incorporating the name "Kaiser", "Kaiser Aluminum", "Kaiser Aluminum &
Chemical Corporation", or "KAE"or derivations thereof (collectively, "KAISER
MARKS"), the Company does not use any Proprietary Rights of Kaiser in the
conduct of the Company's business as presently conducted or presently
contemplated as reflected in the Strategic Plan. The Company has no
obligation to compensate Kaiser or, to the best of Kaiser's Knowledge, any
other Person, for the use of any Proprietary Rights of Kaiser in the conduct
of the Company's business as presently conducted or presently contemplated as
reflected in the Strategic Plan.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACCURIDE SUB AND ACCURIDE
Accuride Sub and Accuride each represent and warrant to Kaiser as
follows:
5.1 CORPORATE EXISTENCE, POWER AND AUTHORIZATION. It is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware, and has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the Transactions. The execution, delivery and
performance of this Agreement and the consummation of the Transactions have
been duly authorized by its Board of Directors and no further corporate
actions or proceedings on its part are necessary to authorize the execution
and delivery of this Agreement, the performance of the obligations hereunder
or the consummation of the Transactions. It has duly executed and delivered
this Agreement and this Agreement constitutes its valid and binding
obligation
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(assuming due execution and delivery by the other parties hereto) enforceable
against it in accordance with its terms, except insofar as enforceability may
be limited by bankruptcy, insolvency, moratorium or other laws which affect
creditors' rights and remedies generally and by principles of equity. Upon
the Closing, the other documents to be executed and delivered by it shall be
duly executed and delivered by it and shall constitute its valid and binding
obligations (assuming due execution and delivery by the other parties
thereto), enforceable against it in accordance with their respective terms,
except insofar as enforceability may be limited by bankruptcy, insolvency,
moratorium or other laws which affect creditors' rights and remedies
generally and by principles of equity.
5.2 NO CONFLICTS; CONSENTS AND APPROVALS.
(a) The execution, delivery and performance of this Agreement and
the consummation of the Transactions do not result in (i) any conflict with
its certificate of incorporation or bylaws, and (ii) any breach or violation
of, or default under, any Applicable Law or any mortgage, agreement, deed of
trust, indenture, lease, contract or other instrument to which it is a party
or by which it or any of its properties or assets are bound, except any
breach, violation or default which could not reasonably be expected to have a
material adverse effect on its ability to perform its obligations under this
Agreement.
(b) No consent, approval or authorization of, or filing with, any
Governmental Authority or any other third party is required on its part in
connection with the execution and delivery of this Agreement or the
consummation of the Transactions, other than any consents, approvals,
authorizations or filings, the failure of which to obtain would not,
individually or in the aggregate, have a material adverse effect on its
ability to perform its obligations under this Agreement.
5.3 GOVERNMENTAL AUTHORIZATIONS; COMPLIANCE WITH LAW. All
Governmental Authorizations which are necessary for the lawful consummation
by Accuride and Accuride Sub of the Transactions have been obtained and are
in full force and effect, or will be obtained and will be in full force and
effect by the Closing Date. There are no proceedings pending, or to the best
of its Knowledge, threatened which could reasonably be expected to result in
the revocation, cancellation, suspension or modification of any Governmental
Authorization.
5.4 LITIGATION. There are no pending or, to the best of its
Knowledge, threatened judicial or administrative actions, proceedings or
investigations which (i) would reasonably be expected, individually or in the
aggregate, to have a material adverse effect on its ability to consummate the
Transactions or (ii) question the validity of this Agreement or any action
taken or to be taken by it in connection herewith or therewith.
5.5 BROKERS. All negotiations relating to this Agreement, the
Restated Lease and the Transactions have been carried out without the
intervention of any Person acting on its behalf in such manner as to give
rise to any valid claim against Kaiser for any brokerage or finder's
commission, fee or similar compensation.
5.6 DISCLOSURE. No representation, warranty or statement made by
it in this
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Agreement contains or will contain any untrue statement of a material fact,
or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading.
5.7 INSURANCE. To the best of its Knowledge, (i) the Insurance
Policies are in full force and effect on the date hereof and (ii) except as
otherwise set forth on Schedule 4.8, shall be kept in full force and effect
through April 30, 1999.
5.8 TAX MATTERS. To the best of its Knowledge, (i) the Company and
the General Partner have not received a ruling from any taxing authority or
signed an agreement with any taxing authority that could reasonably be
expected to have a Company Material Adverse Effect, and (ii) there is no
expectation that any taxing authority may claim or assess any new or
additional Taxes payable by the Company or the General Partner for any period
ending on or prior to the Closing Date that could reasonably be expected to
have a Company Material Adverse Effect.
5.9 CERTAIN PAYMENTS. Neither it nor any of its directors,
officers or agents has, directly or indirectly, (a) made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback or other payment to
any Person, private or public, regardless of form, whether in money, property
or services, for or in respect of the Company or any Affiliate of the Company
in connection with the business conducted by the Company, (i) to obtain
favorable treatment in securing business, (ii) to pay for favorable treatment
for business secured, (iii) to obtain special concessions or for special
concessions already obtained or (iv) in violation of any Applicable Law, or
(b) established or maintained any fund or asset for or in respect of the
Company or any Affiliate of the Company in connection with the business
conducted by the Company that has not been recorded in the books and records
of the Company.
5.10 CLAIMS. Following the Closing, to the best of its Knowledge,
it will not have any outstanding claims against Kaiser or any of Kaiser's
Affiliates, including the Company and the General Partner, arising from or in
connection with the breach or alleged breach of any agreement with Kaiser or
any of Kaiser's Affiliates, including claims arising under or in connection
with the Partnership Agreements.
5.11 AGREEMENTS. Schedule 4.14 sets forth all existing material
agreements, contracts, leases, purchase orders, undertakings, understandings,
covenants not to compete, confidentiality agreements, licenses, obligations
or other commitments, whether oral or written, currently in effect between
Kaiser and any of its subsidiaries, on one hand, and Accuride, Accuride Sub,
the Company or the General Partner, on the other hand.
ARTICLE VI
CONDITIONS
6.1 [intentionally left blank]
6.2 CONDITIONS TO OBLIGATIONS OF ACCURIDE AND ACCURIDE SUB. The
obligations of
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Accuride and Accuride Sub to consummate the Transactions shall be subject to
the fulfillment (or waiver by Accuride and Accuride Sub) on or prior to the
Closing Date of each of the following conditions:
(a) FINANCING. Accuride shall have obtained the financing
necessary to consummate the Transactions upon terms reasonably satisfactory
to Accuride in its sole discretion.
(b) EXECUTION AND DELIVERY OF RESTATED LEASE. The Restated Lease
shall have been duly executed and delivered by the Company and Kaiser.
(c) FIRPTA. Kaiser shall have furnished a certificate, dated as of
the Closing Date and sworn to under penalty of perjury, that sets forth the
name, address and federal taxpayer identification number of Kaiser, states
that it is not a "foreign person" within the meaning of Section 1445 of the
Code, and is otherwise in the form set forth in the Treasury Regulations
thereunder.
(d) RESIGNATIONS. All employees and agents of Kaiser who are
officers of the General Partner and/or the Company shall deliver resignations
from such offices effective as of the Closing Date.
(e) OPINION OF COUNSEL. Accuride and Accuride Sub shall have
received from the general counsel of Kaiser, an opinion in the form of
Exhibit B hereto.
(f) BILLS OF SALE. Kaiser shall have delivered bills of sale in
the forms of Exhibits C and D hereto.
(g) TRANSFER DOCUMENTS. Kaiser shall have delivered an (i)
assignment and assumption of limited partnership interest and limited
liability company interest in the form of Exhibit E hereto and (ii) an
acknowledgment of limited partnership interest and limited liability company
interest in the form of Exhibit F hereto.
6.3 CONDITIONS TO OBLIGATIONS OF KAISER. The obligations of Kaiser
to consummate the Transactions shall be subject to the fulfillment (or waiver
by Kaiser) on or prior to the Closing Date of each of the following
conditions:
(a) PAYMENT OF THE PURCHASE PRICE. Kaiser shall have received the
remaining balance of the Purchase Price as adjusted in accordance with this
Agreement.
(b) EXECUTION AND DELIVERY OF RESTATED LEASE. The Restated Lease
shall have been duly executed and delivered by the Company.
(c) COMPANY AND GENERAL PARTNER DOCUMENTS AND INSTRUMENTS. Kaiser
shall have received on the date hereof from each of the Company and the
General Partner an acknowledgment and certificate in the form of Exhibit G
attached hereto.
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ARTICLE VII
INDEMNIFICATION
7.1 INDEMNIFICATION. (a) Kaiser shall indemnify and hold harmless
each of Accuride, Accuride Sub and their respective control persons (as such
term is defined in the Securities Act of 1933, as amended, and the rules and
regulations thereunder), directors, officers, employees and agents, and the
successors and assigns of each of the foregoing, from and against any and all
losses, liabilities, damages, claims, costs and expenses whatsoever
(including without limitation reasonable legal and consultant fees and
expenses and any court costs), as incurred, whether or not resulting from
third party claims (each, a "CLAIM," and collectively, "CLAIMS"), arising out
of, resulting from or attributable to (i) any breach by Kaiser of any of its
covenants or obligations contained in this Agreement or the Restated Lease;
(ii) any breach by Kaiser of, or any inaccuracy in, any representation or
warranty made by Kaiser in this Agreement or the Restated Lease; and (iii)
any breach by Kaiser of its obligations under the Partnership Agreements.
(b) Accuride and Accuride Sub shall indemnify and hold harmless
Kaiser and its respective control persons (as such term is defined in the
Securities Act of 1933, as amended, and the rules and regulations
thereunder), directors, officers, employees and agents, and the successors
and assigns of each of the foregoing, from and against any and all Claims
arising out of, resulting from or attributable to (i) any breach by Accuride
or Accuride Sub of any of their respective covenants or obligations contained
in this Agreement; (ii) any breach by Accuride or Accuride Sub of, or any
inaccuracy in, any representation or warranty made by Accuride and Accuride
Sub in this Agreement; and (iii) any breach by Accuride Sub of its
obligations under the Partnership Agreements.
7.2 INDEMNIFICATION PROCEDURES. For purposes of this Section 7.2,
the party seeking indemnification shall be known as the "INDEMNIFIED PARTY"
and the party from whom indemnification is sought shall be known as the
"INDEMNIFYING PARTY." As soon as reasonably practicable after receipt by an
Indemnified Party of notice of any Claim in respect of which an Indemnifying
Party may be liable under Section 7.1, the Indemnified Party shall give
notice thereof to the Indemnifying Party, setting forth in reasonable detail
the facts and circumstances pertaining thereto, but the failure to give such
notice shall not relieve the Indemnifying Party of its obligations under this
Article VII unless and to the extent that the Indemnifying Party is
prejudiced by such failure. In the event that the Claim arises out of or
results from a claim by any third party, the Indemnified Party shall permit
the Indemnifying Party, at its option and expense, to assume the defense of,
and subject to the consent of the Indemnified Party, which shall not be
unreasonably withheld, in each case settle or otherwise dispose of such claim
by counsel reasonably satisfactory to the Indemnified Party, provided that
the Indemnified Party may participate in such defense by counsel of its own
choice, but the fees, expenses and other charges of such counsel will be
solely for the account of the Indemnified Party, unless: (a) the employment
of counsel by the Indemnified Party has been authorized in writing by the
Indemnifying Party, (b) there is a conflict or potential conflict (based on
advice of counsel to the Indemnified Party reasonably acceptable to the
Indemnifying Party) between the Indemnified Party and the Indemnifying Party,
or (c) the Indemnifying Party has not in fact employed counsel
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to assume the defense of such action within a reasonable time after receiving
notice of the commencement of the action, and provided, further, that the
Indemnified Party shall be entitled to control such defense jointly with the
Indemnifying Party in the case of any litigation referred to in clause (b) of
the immediately preceding proviso to this sentence. Notwithstanding anything
to the contrary in this Section 7.2, without the prior written consent of
each Indemnified Party (or of each Indemnifyig Party if the Indemnified Party
is defending such third party claim), which consent shall not be unreasonably
withheld, the Indemnifying Party (or Indemnified Party, as the case may be)
shall not consent to the entry of any judgment or enter into any settlement
that does not include an unconditional release of each Indemnified Party (or
Indemnifying Party) from all liabilities in respect of such Claims. The
Indemnifying Party shall pay for any Claim promptly in cash once its
responsibility has been established.
7.3 THIRD PARTY BENEFICIARIES. Any Indemnified Party not party to
this Agreement shall be a third party beneficiary of this Agreement for
purposes of this Article VII.
ARTICLE VIII
OTHER MATTERS
8.1 TERMINATION OF CERTAIN AGREEMENTS. Unless sooner terminated
upon the mutual written agreement of the parties thereto and except as
otherwise set forth herein, each of the Kaiser Technical Services Agreement
and the Kaiser Production Services Agreement shall, and shall be deemed to,
terminate on August 31, 1999. Unless sooner terminated upon the mutual
written agreement of the parties thereto and except as otherwise set forth
herein, the Kaiser Administrative Services Agreement shall, and shall be
deemed to, terminate on August 31, 1999, with respect to all services
currently being provided by Kaiser thereunder other than tax services which
shall continue through the timely preparation and filing of the tax returns
specified in Section 8.10. Kaiser shall, pursuant to the terms of those
agreements, continue to be paid and reimbursed for any such services that it
continues to provide.
8.2 TERMINATION OF CERTAIN SERVICES. Effective as of April 2,
1999, or such other date mutually agreed to in writing by the parties hereto,
Accuride or Accuride Sub, shall assume control of all of the cash management,
treasury and hedging activities currently being performed by Kaiser for the
General Partner and the Company.
8.3 CONTINUATION OF RIGHTS AND OBLIGATIONS. Except as otherwise
specifically set forth in this Agreement or the Restated Lease, the rights
and obligations of Kaiser, Accuride Sub, Accuride, the General Partner and
the Company under each of the Formation Agreements, including, without
limitation, the covenants set forth in Article VI of the Contribution
Agreement and the indemnification provisions set forth in Article VII of the
Contribution Agreement, shall continue in full force and effect subject only
to the terms, conditions and limitations set forth herein and therein. The
parties hereto agree that the representations and warranties set forth in
Articles 4 and 5 of this Agreement shall not amend, limit or otherwise modify
in any manner any of the respective parties' rights and obligations under any
of the Formation Agreements. It being further understood by the parties that
the foregoing shall not preclude a claim under this
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Agreement by any party hereto based upon the breach of any such
representation or warranty.
8.4 RECALL CAMPAIGN. Notwithstanding any other provision to the
contrary contained in the Contribution Agreement, any other Formation
Agreement or otherwise, the Company shall be solely responsible for the
Recall Campaign and all liabilities, costs and expenses of the Recall
Campaign (the "Recall Costs") and Kaiser shall not have any liability to the
Company, the General Partner, Accuride, Accuride Sub or any of their
Affiliates for the Recall Costs, whenever incurred. This Section 8.4 does
not create additional indemnification rights except as set forth in the
Formation Agreements and indemnification against the Company for the Recall
Costs. Notwithstanding the foregoing, the parties hereto agree that the cause
of the Recall Campaign has not been mutually agreed upon by the parties
hereto and that this Section 8.4 does not amend, limit or otherwise modify in
any manner any of the respective parties's rights and obligations under the
Formation Agreements for any other liabilities, costs or expenses arising
from the wheels which are the subject of the Recall Campaign, including third
party claims or any claims based on product defects.
8.5 COVENANT NOT TO COMPETE. Effective as of the Closing Date,
neither Kaiser, Accuride, Accuride Sub nor any of their respective Affiliates
shall have any obligations under Section 11.2 of each of the Partnership
Agreements. In lieu of the foregoing, effective as of the Closing Date,
Kaiser agrees that for a period of five (5) years after the Closing Date,
neither Kaiser nor any of its Affiliates (including future Affiliates) will,
compete with the business of the Company as currently being conducted or
otherwise, directly or indirectly, design, manufacture or sell, or
participate whether by ownership interest or otherwise in the design,
manufacture or sale of, any Joint Venture Products (except in connection with
or as a result of fundamental corporate transactions, including mergers,
spin-offs and sales of substantially all of the capital stock or assets of
Kaiser or its parent corporations, except that Kaiser shall not acquire any
businesses which have more than twenty-five percent (25%) of their revenues
derived from businesses which compete with the Company in the business as
currently conducted by the Company, and with respect to businesses which
derive less than 25% of their revenue from businesses which compete with the
Company in the business currently conducted by the Company, Kaiser will
dispose of any competing businesses acquired within twelve (12) months of
such acquisition). For purposes of this Section only, the term "Joint
Venture Products" shall include any wheels of the size and type described in
clause (i) of the definition of Joint Venture Products in Article I of this
Agreement manufactured from non-ferrous materials (other than thermoplastics
and thermosets). The foregoing restrictions shall not preclude or otherwise
prevent Kaiser or any of its Affiliates from (i) acting solely as a supplier
or toller of aluminum, aluminum alloys or other materials used in the
production of Joint Venture Products, or (ii) participating in or otherwise
conducting research or development of new alloys or materials.
8.6 AMENDMENT OF PUBLIC FILINGS AND REPLACEMENT OF DESIGNATED
AGENTS. Promptly following the Closing, Accuride and Accuride Sub shall cause
the Company and the General Partner to submit such filings and notifications
necessary to appoint Persons other than Kaiser as agents for service of
process or mailings for matters pertaining to the General Partner or the
Company and reflect the fact that Kaiser no longer owns any interest in the
General Partner and the Company.
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8.7 INSPECTION OF BOOKS AND RECORDS. (a) Following the Closing,
Kaiser and/or its representatives and agents, at Kaiser's expense and at
reasonable times during business hours, shall have the right to inspect and
make copies and extracts of all books of account and all financial, legal and
business records (which books of account, financial, legal and business
records shall be retained for not less than seven years after the Closing
Date) of (i) the Company and the General Partner, as well as access to, and
the cooperation of, any employee of the Company or General Partner having
knowledge of the information therein contained and the right to discuss the
matters recorded in such books and records with the independent certified
accountants retained by the Company and/or General Partner, and (ii) Accuride
related to the services provided by Accuride under any of the Ancillary
Agreements (as defined in the Contribution Agreement), including, without
limitation, the Accuride Technical Services Agreement, the Accuride Sales and
Marketing Agreement and the Accuride Administrative Services Agreement, as
well as access to, and the cooperation of, any employee of Accuride having
knowledge of the information therein contained, in each instance if such
inspection, access and cooperation are for any reasonable purpose, including
without limitation (1) preparation for proceedings, claims, actions, suits,
investigations or disputes to which Kaiser is a party relating to the conduct
of the business prior to the Closing Date by Kaiser, Accuride, the Company
and/or the General Partner, (2) any proceedings, claims, actions, suits,
investigations or disputes between Kaiser and the Company, the General
Partner, Accuride and/or Accuride Sub relating to the conduct of the business
prior to the Closing Date by Kaiser, Accuride, the Company and/or the General
Partner, (3) performance of accounting or tax reviews or audits of the
business conducted by the Company or the General Partner relating to periods
prior to the Closing Date or (4) any purpose reasonably related to Kaiser's
ownership of its Interest in the Company and/or the General Partner;
provided, that such inspection, access or cooperation shall not unreasonably
interfere with the normal operations of the Company and Kaiser and/or its
representatives shall not be entitled to any such inspection, access or
cooperation (i) as to which the attorney-client privilege applies or (ii) the
disclosure of which is restricted Applicable Law except in strict compliance
with such law.
(b) Following the Closing, Accuride or Accuride Sub and/or their
representatives and agents, at the expense of Accuride and Accuride Sub and
at reasonable times during business hours, shall have the right to inspect
and make copies and extracts of all the books of account and all financial,
legal and business records of Kaiser related to the services provided by
Kaiser under any of the Ancillary Agreements (as defined in the Contribution
Agreement), including, without limitation, the Kaiser Technical Services
Agreement, the Kaiser Production Services Agreement and the Kaiser
Administrative Services Agreement, as well as access to, and the cooperation
of, any employee of Kaiser having knowledge of the information therein
contained and the right to discuss the matters recorded in such books and
records with the independent certified accountants retained by Kaiser, if
such inspection, access and cooperation are for any reasonable purpose,
including without limitation (i) preparation for proceedings, claims,
actions, suits, investigations or disputes to which Accuride, Accuride Sub or
the Company is a party relating to the conduct of the business of the Company
prior to the Closing Date by Kaiser, Accuride, the Company or the General
Partner, (ii) any proceedings, claims, actions, suits, investigations or
disputes between Kaiser and the Company, the General Partner, Accuride and/or
Accuride Sub, or (iii)
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performance of accounting or tax reviews or audits of the business conducted
by the Company or the General Partner relating to periods prior to the
Closing Date; provided, that such inspection, access or cooperation shall not
unreasonably interfere with the normal operations of Kaiser and Accuride,
Accuride Sub and their representatives shall not be entitled to any such
inspection, access or cooperation (i) as to which the attorney-client
privilege applies or (ii) the disclosure of which is restricted by Applicable
Law except in strict compliance with such law.
8.8 INTERIM MATTERS. From and after the date of this Agreement,
Accuride shall, subject to the terms and conditions otherwise set forth in
this Agreement, have management control of the business conducted by the
Company. Notwithstanding the foregoing, Accuride agrees that between the date
hereof and the Closing Date, that (i) Accuride will, and will cause the
Company and the General Partner to (a) conduct the business of the Company
and the General Partner in a manner consistent with the ordinary course of
the normal day-to-day operations of the Company and the General Partner and
consistent with past practice and (b) use its reasonable best efforts to
preserve intact the current business organization and corporate structure of
the Company and the General Partner, and maintain the relations and good will
with suppliers, customers, landlords, creditors, employees, agents and others
having business relationships with the Company and/or the General Partner,
and (ii) Accuride will not, and will not permit the Company and the General
Partner to, in each case without Kaiser's prior written consent, take any of
the actions identified in Sections 6.4(vi), (vii), (xiii), (xiv), (xv), (xvi)
and (xviii) of the Limited Liability Company Agreement.
8.9 PROPERTY TAXES. Property taxes for 1999 shall be allocated to
the short period ending on the Closing Date based on the actual number of
calendar days in each period (it being understood that the foregoing shall
not alter, amend or otherwise modify the terms of the Restated Lease).
8.10 TAX RETURNS. Kaiser shall be responsible for the timely
preparation of all 1998 tax returns required to be filed for the General
Partner and the Company consistent with past practice in accordance with the
Partnership Agreements and the Kaiser Administrative Services Agreement.
Kaiser shall also be responsible for the timely preparation of 1999 tax
returns for the period through the Closing Date. With respect to the period
from January 1, 1999 through the Closing Date, no elections shall be made or
positions taken that are not consistent with past practice. Kaiser shall
remain the owner of the Kaiser Interests for income tax purposes through the
Closing Date.
8.11 NOTIFICATION OF CERTAIN MATTERS. From and after the date
hereof and up to the Closing, each party shall give prompt notice to the
other following its receipt of notice of any material failure of such party
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; PROVIDED, HOWEVER, that such disclosure
shall not be deemed to cure any breach of a covenant or agreement or to
satisfy any condition.
8.12 FURTHER ASSURANCES. Upon the terms and subject to the
conditions contained herein, the parties agree, in each case both before and
after the Closing, (i) to use all reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things
20
<PAGE>
necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement and the Restated Lease, (ii) to
execute any documents, instruments or conveyances of any kind which may be
reasonably necessary or advisable to carry out any of the Transactions, and
(iii) to cooperate with each other in connection with the foregoing.
8.13 NO SOLICITATION. For a period of five years following the
Closing Date, Kaiser shall not, and Kaiser shall cause its Affiliates not to,
directly or indirectly, hire or retain, or offer to hire or retain any
employee of the Company, except for employees who (i) contact Kaiser or its
Affiliates on his or her own initiative without any direct or indirect
solicitation or encouragement from Kaiser or its Affiliates, (ii) respond to
any public advertisement placed by Kaiser or its Affiliates, or (iii) have
been terminated by the Company prior to commencement of employment
discussions with Kaiser or its Affiliates.
8.14 NO-SHOP. From the date hereof through the Closing or the
earlier termination of this Agreement, Kaiser shall not, and Kaiser shall
cause its Affiliates and their respective employees, agents or advisors
(including without limitation investment bankers, attorneys and accountants),
not to, directly or indirectly, solicit, initiate or continue any discussions
or negotiations with, or encourage or respond to any inquiries or proposals
by, or participate in any negotiations with, or provide any information to,
or otherwise cooperate in any other way with, any corporation, partnership,
person or other entity or group, other than Accuride and Accuride Sub
concerning any sale of all or a portion of the Kaiser Interests (a "PROPOSED
ACQUISITION TRANSACTION"). From the date hereof through the Closing or the
earlier termination of this Agreement, Kaiser shall not, directly or
indirectly, through any officer, director, employee, representative, agent or
otherwise, solicit, initiate or encourage the submission of any proposal or
offer from any person relating to any Proposed Acquisition Transaction or
participate in any negotiations regarding, or furnish to any other person any
information with respect to the Company or otherwise cooperate in any way
with, or assist or participate in, facilitate or encourage, any effort or
attempt by any other person to seek or effect a Proposed Acquisition
Transaction.
8.15 KAISER MANUFACTURING AGREEMENT. The parties hereto agree that
there is no Kaiser Manufacturing Agreement (as defined in the Contribution
Agreement) and the parties shall not have any obligations thereunder.
8.16 CONFIDENTIAL INFORMATION. Effective as of the Closing Date
Kaiser shall not have any obligations under Section 11.1 of each of the
Partnership Agreements. In lieu thereof, effective as of the Closing Date
Kaiser agrees that during the existence of the Company or five years from the
Closing Date, whichever is later, Kaiser (i) shall maintain, and shall use
its best efforts to cause its Affiliates, officers, directors, employees,
accountants, counsel and agents to maintain, the confidentiality of any
confidential information concerning the Joint Venture Products, the Company,
the General Partner, Accuride, Accuride Sub or the business of the Company
that is not otherwise generally available to the public and (ii) without the
prior consent of Accuride and the Company, shall not use or disclose to any
third party (other than their respective financial advisors, attorneys and
other agents and representatives) such confidential information, except (a)
after receipt of a binding order of confidentiality, if available, in
enforcing
21
<PAGE>
its rights under one or both of the Partnership Agreements; any of the
Formation Agreements; any agreement between or among Kaiser, on the one hand,
and Accuride, Accuride Sub, the Company and/or the General Partner, on the
other; this Agreement; the Restated Lease; or the Transactions, or (b) to any
governmental agency if it believes in good faith that such disclosure is
required by applicable law or by governmental policy, provided that prior to
making any such disclosure Kaiser shall, unless prohibited by such
governmental agency, give written notice (identifying such agency and
describing the general nature of such disclosure) to, and consult with, the
Company and Accuride.
8.17 INSURANCE. After the date hereof, Kaiser shall provide
reasonable assistance in making and collecting claims on the Insurance
Policies.
8.18 USE OF NAMES. Neither the Company, the General Partner,
Accuride nor Accuride Sub will, directly or indirectly, use in any manner
whatsoever, or allow any of their respective Affiliates to use in any manner
whatsoever, the Kaiser Marks after the Closing Date. Notwithstanding the
foregoing, the Company and the General Partner may continue to use the Kaiser
Marks during the six month period beginning on the Closing Date in connection
with the use of existing inventories or materials and supplies containing any
such Kaiser Marks.
8.19 ULTRA-FORGE EQUIPMENT. Prior to the end of the six (6) month
period beginning on the Closing Date, Kaiser shall have removed or caused the
removal of its hub machining line and related Kaiser equipment and inventory
currently located at the Ultra-Forge facility in Cuyahoga Falls, Ohio.
Absent a written agreement to the contrary between Kaiser and Accuride, any
equipment remaining at the end of such six (6) month period shall become the
property of AKW on an "as is, where is" basis and with all faults.
8.20 DISTRIBUTIONS. The General Partner and the Company shall have
been deemed to have authorized pursuant to Sections 5.1 of Limited
Partnership Agreement and the Limited Liability Company Agreement,
respectively, distributions in an amount equal to net cash distributions
received by Accuride Sub and Kaiser from the General Partner and the Company
at any time prior through March 31, 1999, in connection with the sweeping of
the accounts maintained by the Company and/or General Partner and
distribution of such amounts to Accuride Sub and Kaiser in the ordinary
course of business of the Company and the General Partner.
8.21 ENGINEERING STORES. Within thirty (30) days of the Closing
Date, the Company shall return to Kaiser all surplus engineering stores in
its possession for which it has not reimbursed Kaiser.
8.22 EFFECTIVE DATE OF BUY/SELL OPTION. From and after the date
hereof, unless otherwise agreed by the parties in writing, the effective date
of the Buy/Sell Option set forth in Section 9.3 of each of the Partnership
Agreements shall be moved from May 1, 1999, to November 1, 1999.
8.23 FUNDING REQUIREMENTS. From and after the date hereof, Accuride
and Accuride Sub shall assume the financial obligations of the Company and
the General Partner, fund one
22
<PAGE>
hundred percent (100%) of the cash infusions required by the Company and the
General Partner and receive one hundred percent (100%) of the cash
distributions from the Company and the General Partner made in the ordinary
course of business and consistent with past practice.
ARTICLE IX
MISCELLANEOUS
9.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing:
(i) By the written agreement of Accuride, Accuride Sub and
Kaiser;
(ii) By any party hereto upon notice to each other party if
the Closing has not occurred on or prior to July 30, 1999, or such later date
as may be approved by the parties hereto;
(iii) By Accuride if it determines, in its sole discretion
that it cannot obtain the financing contemplated by Section 6.2(a) of this
Agreement.
Upon any termination of this Agreement, the parties hereto shall have
no liability to each other by reason of such termination except for
liabilities accrued on or prior to the date of such termination; provided
that if such termination shall result from the breach by a party of the
covenants or agreements of such party, such party shall be fully liable for
any and all damages, costs and expenses (including reasonable counsel fees)
sustained or incurred by the other parties to this Agreement and provided,
further, that the provisions contained in Sections 3.2, 3.9 and 8.22,
Articles VII and IX (except for Sections 9.4 and 9.7) hereof shall survive
any termination of this Agreement.
9.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. NOTWITHSTANDING
THE FOREGOING, ANY AND ALL MATTERS RELATING TO THE RIGHTS AND OBLIGATIONS
UNDER THE PARTNERSHIP AGREEMENTS SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (OTHER THAN ANY CONFLICT OF
LAW RULE WHICH MIGHT RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION). IN THE EVENT OF A CONFLICT BETWEEN ANY PROVISION OF EITHER OF
THE PARTNERSHIP AGREEMENTS AND ANY NON-MANDATORY PROVISION OF THE DELAWARE
REVISED UNIFORM LIMITED PARTNERSHIP ACT OR THE DELAWARE LIMITED LIABILITY
COMPANY ACT, AS APPLICABLE, THE PROVISIONS OF THE APPLICABLE PARTNERSHIP
AGREEMENT SHALL CONTROL AND TAKE PRECEDENCE.
9.3 ARBITRATION. (a) Any dispute, controversy or claim arising out
of, relating to or in connection with, this Agreement or the breach, validity
or termination thereof shall be finally settled by arbitration. The
arbitration shall be conducted in accordance with the American
23
<PAGE>
Arbitration Association's commercial arbitration rules in effect at the time
of arbitration, except as modified herein or by mutual agreement of the
parties. The seat of the arbitration shall be New York, New York; provided
that the arbitrators may hold hearings in such other locations as the
arbitrators determine to be most convenient and efficient for all the parties
under the circumstances. Notwithstanding anything to the contrary in Section
9.2, the arbitration shall be governed by the Federal Arbitration Act.
(b) The arbitration shall be conducted by three arbitrators. One
arbitrator shall be appointed by Accuride and/or Accuride Sub, as the case
may be, and one arbitrator shall be appointed by Kaiser. The two arbitrators
so selected shall appoint the third arbitrator. If any party to the dispute
fails to make a timely appointment, or if the initial two arbitrators cannot
agree on the third arbitrator within ten (10) days of their appointment, any
party hereto may request the American Arbitration Association to appoint such
arbitrator(s).
(c) Any award rendered by the arbitrators shall be in writing,
state the reasons for the award and be final and binding upon the parties.
The award may include an award of costs, including reasonable attorneys' fees
and disbursements. Judgment upon the award rendered may be entered in any
court having jurisdiction thereof or having jurisdiction over the relevant
parties or their assets.
9.4 SURVIVAL. The representations and warranties of the parties
hereto contained in this Agreement or in the Restated Lease, or otherwise
made in writing in connection with the Transactions, shall survive until May
1, 2001, except with respect to the representations and warranties set forth
in (i) Section 4.7 (Title), which shall survive indefinitely and (ii)
Sections 4.9 and 5.8 (Tax Matters), which shall survive until the expiration
of the applicable statute of limitations (with extensions). Any due
diligence or investigation conducted by or on behalf of any party hereto, or
information furnished by such party or representative thereof in connection
therewith shall not limit or in any way prejudice the right of such party to
rely on the representations and warranties set forth herein.
9.5 ENTIRE AGREEMENT; AMENDMENT; ASSIGNMENT, ETC. This Agreement,
together with the Restated Lease and the Formation Agreements, embodies the
entire agreement and understanding between the parties relating to the
subject matter hereof and thereof, and supersedes any prior oral or written
agreements, commitments or terms. Neither this Agreement nor any of the
terms hereof may be amended, modified or waived, supplemented or terminated
other than by a document in writing, signed by the party or parties against
which the enforcement of such amendment, modification, waiver, supplement or
termination is sought. This Agreement shall be binding upon the respective
successors and permitted assigns of the parties hereto. This Agreement shall
not be assignable or otherwise transferable by any party without the prior
written consent of the other parties and any attempt to so assign or transfer
this Agreement without such consent shall be void and of no effect.
9.6. BUY/SELL OPTION. Notwithstanding anything to the contrary in
this Agreement, this Agreement is not related to and is not intended to
trigger the Buy/Sell Option set forth in Section 9.3 of either of the
Partnership Agreements.
24
<PAGE>
9.7. SPECIFIC PERFORMANCE. Each of the parties acknowledges and
agrees that the other parties would be irreparably damaged in the event the
provisions of Sections 8.5 and 8.13 are not performed in accordance with its
specific terms or otherwise are breached. Therefore, notwithstanding
anything to the contrary in this Agreement, each of the parties agrees that
the other parties shall be entitled to an injunction or injunctions to
prevent breaches of Sections 8.5 and 8.13 and to enforce specifically the
performance by such first party under Sections 8.5 and 8.13, and each party
agrees to waive the defense in any such suit that the other parties have an
adequate remedy at law and to interpose no opposition, legal or otherwise, as
to the propriety of injunction or specific performance as a remedy, and
agrees to waive any requirement to post any bond in connection with obtaining
such relief. The equitable remedies described in this Section 9.7 shall be
in addition to, and not in lieu of, any other remedies at law or in equity
that the parties hereto may elect to pursue.
9.8 NOTICES. Any notice or other communication required or
permitted to be given hereunder or for the purposes hereof to any party shall
be in writing and shall be sufficiently given if (i) delivered personally,
(ii) mailed by certified or registered mail, postage prepaid, (iii)
transmitted by facsimile (and confirmed by mail) or (iv) sent by next day or
overnight mail or delivery to:
(a) Accuride Sub and Accuride at:
Accuride Corporation
2315 Adams Lane/P.O. Box 40
Henderson, Kentucky 42420
Attn: William P. Greubel
Tel: (502)826-5000
Fax: (502)827-7601
with a copy to:
Accuride Corporation
2315 Adams Lane/P.O. Box 40
Henderson, Kentucky 42420
Attn: David K. Armstrong
Tel: (502)826-5000
Fax: (502)827-7601
(b) Kaiser at:
Kaiser Aluminum & Chemical Corporation
26957 Northwestern Highway Drive
Suite 200
Southfield, MI 48034
Attn: Vice President, Controller
25
<PAGE>
Tel: (248)352-4630
Fax: (248)352-4635
with a copy to:
Kaiser Aluminum & Chemical Corporation
5847 San Felipe, Suite 2600
Houston, Texas 77057
Attn: General Counsel
Tel: (713)267-3777
Fax: (713)267-3702
or at such other address or to such other person's attention as the party to
whom such notice is to be given shall have last notified the party giving the
same in the manner provided in this Section. Any notice so delivered to the
party to whom it is addressed shall be deemed to have been given and received
(a) if by personal delivery, on the day of such delivery, (b) if by certified
or registered mail, on the seventh day after mailing thereof, (c) if by
facsimile, the day on which such facsimile was sent as evidenced by receipt
of a confirmation indicating a successful transmission or (d) if by next day
or overnight mail delivery, on the day delivered, provided that if, with
respect to any of the foregoing, any such day is not a Business Day then the
notice shall be deemed to have been given and received on the Business Day
next following such day.
9.9 EXPENSES. Each party hereto shall pay all its own costs, fees
and expenses incident to this Agreement and the Transactions contemplated
hereby, including legal and accounting fees and disbursements.
9.10 SEPARABILITY OF PROVISIONS. Each provision of this Agreement
shall be considered separable and if for any reason any provision or
provisions herein are determined to be invalid, unenforceable or illegal
under any existing or future law, such invalidity, unenforceability or
illegality shall not impair the operation of or affect those portions of this
Agreement which are valid, enforceable and legal. If any provision of this
Agreement is held to be unenforceable for any reason, it shall be adjusted
rather than voided, if possible, in order to achieve the intent of the
parties to the extent possible.
9.11 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement will
be construed as giving any Person, other than the parties hereto and their
successors and permitted assigns, any right, remedy or claim under or in
respect of this Agreement or any provision hereof, except as specifically
provided for herein.
9.12 SECTION HEADINGS; COUNTERPARTS; ETC. The section headings of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of
which together shall constitute one and the same instrument.
26
<PAGE>
IN WITNESS WHEREOF, Accuride Sub, Accuride and Kaiser have caused this
Agreement to be duly executed in their respective corporate names by their
respective officers, each of whom is duly and validly authorized and
empowered, all on and as of the date first above written.
ACCURIDE CORPORATION ACCURIDE VENTURES, INC.
By: By:
------------------------------- --------------------------------
Name: William P. Greubel Name: William P. Greubel
Title: President Title: President
KAISER ALUMINUM & CHEMICAL
CORPORATION
By:
--------------------------------
Name: Jack A. Hockema
Title: Vice President
27
<PAGE>
Schedule 1(a)
Knowledge
<TABLE>
<S> <C>
Kaiser:
Jack A. Hockema Sections 4.3, 4.4, 4.8, 4.9, 4.10, 4.12, 4.13 and 4.15
Vice President and President
Kaiser Engineered Products
Kerry Shiba Sections 4.3, 4.4, 4.8, 4.9, 4.10, 4.12, 4.13 and 4.15
Vice President & Controller
Kaiser Engineered Products
John Barneson Sections 4.3, 4.4, 4.8, 4.9, 4.10, 4.12, 4.13 and 4.15
Vice President Planning and Development
Kaiser Engineered Products
Edward A. Kaplan Section 4.9
Director of Tax Planning
Dorothy W. Chapman Section 4.8
Director of Risk Management
Accuride:
William P. Greubel Sections 5.3, 5.4, 5.7, 5.8 and 5.10
John Murphy Sections 5.3, 5.4, 5.7, 5.8 and 5.10
Deepak Chaudrey Sections 5.7 and 5.8
</TABLE>
28
<PAGE>
Schedule 4.8
INSURANCE POLICIES
<TABLE>
<CAPTION>
POLICY TYPE POLICY NUMBER INSURER
- ----------- ------------- -------
<S> <C> <C>
Crime 861-49-06 National Union Fire Ins. Co.
Fiduciary Liability 751-119123-98 Executive Risk Indemnity Ins.
General Liability (1) 61 CES SS 853 Twin City Fire Ins. Co.
Workers' Compensation 382509 Employee Benefits Ins. Co.
Employers Liability
Primary Excess Liability 61 HU SL5703 Twin City Fire Ins. Co.
Excess Liability Incl. w/MAX Various
Automobile Liability KA0142481-0 Reliance National Indemnity
Property* 65060/98 Trochus Ins. Co. Ltd.
Marine Package* ARS-1930 American International
Marine Agency, Inc.
</TABLE>
* Indicates policies that are currently under the Kaiser umbrella, but that
will no longer cover the Company on or after the Closing Date.
- -------------------
(1) The limited recall coverage currently available under this policy cannot
be renewed or extended beyond April 30, 1999.
<PAGE>
Schedule 4.14
Agreements
1. Contribution Agreement
2. Erie Lease Agreement
3. Kaiser Administrative Services Agreement
4. Kaiser Production Services Agreement
5. Kaiser Technical Services Agreement
6. Limited Partnership Agreement
7. Limited Liability Company Agreement
8. Aluminum Supply Agreement between the Company and Kaiser Aluminum &
Chemical of Canada Limited, a subsidiary of Kaiser ("KACOCL"), pursuant
to which KACOCL supplies aluminum billet to the Company.
9. Aluminum Supply Agreement, including forward purchase commitment, between
the Company and Kaiser, pursuant to which Kaiser supplies aluminum billet
to the Company.
10. Scrap Purchase Agreement between the Company and KACOCL pursuant to which
KACOCL purchase aluminum scrap from the Company.
<PAGE>
Exhibit A
Restated Lease
<PAGE>
Exhibit B
Form of Kaiser Opinion
<PAGE>
April 1, 1999
Accuride Corporation
Accuride Ventures, Inc.
2315 Adams Lane
Henderson, Kentucky 42420
Ladies and Gentlemen:
This opinion is being furnished to you pursuant to Section 6.2(f) of
the Purchase Agreement, dated as of April 1, 1999 (the "PURCHASE AGREEMENT"),
among Kaiser Aluminum & Chemical Corporation, a Delaware corporation
("KAISER"), Accuride Corporation, a Delaware corporation ("Accuride"), and
Accuride Ventures, Inc., a Delaware corporation and wholly-owned subsidiary
of Accuride ("ACCURIDE SUB"). Capitalized terms used herein without
definition shall have the meanings specified in the Purchase Agreement.
I am Vice President and General Counsel of Kaiser and I, or attorneys
under my supervision, have acted as counsel to Kaiser in connection with the
preparation of the Purchase Agreement and the Restated Lease.
I, or attorneys under my supervision, have reviewed executed copies of
the Purchase Agreement and the Restated Lease and have also examined and
relied, without independent investigation or verification, upon the
representations and warranties of Kaiser as to factual matters contained in
and made pursuant to the Purchase Agreement, and upon certificates of
officers of Kaiser and the originals, or copies certified or otherwise
identified to my or their satisfaction, of corporate records of Kaiser,
certificates of public officials and such other documents as in our judgment
are necessary or appropriate to render the opinion expressed below. In the
course of the examination of the documents referred to above, I have assumed
the genuineness of all signatures (other than those of the officers of
Kaiser) and the authenticity of all certificates and other documents
submitted to me or to attorneys under my supervision as originals and the
conformity to originals of all documents submitted to me or to attorneys
under my supervision as conformed or photocopies.
Based on the foregoing, I am of the opinion that:
(a) DUE INCORPORATION. Kaiser is a corporation duly incorporated,
validly existing and
<PAGE>
in good standing under the laws of the State of Delaware. Kaiser has all
requisite corporate power and authority to execute and deliver the Purchase
Agreement and the Restated Lease, to perform its respective obligations
thereunder, and to consummate the transactions contemplated thereby.
(b) DUE AUTHORIZATION. The execution, delivery and performance by
Kaiser of the Purchase Agreement and the Restated Lease and the consummation
by Kaiser of the transactions contemplated thereby have been duly and validly
authorized by all necessary corporate action on the part of Kaiser. The
Purchase Agreement and the Restated Lease have been duly executed and
delivered by Kaiser, and, assuming the due authorization, execution and
delivery thereof by the other parties thereto, each constitutes a legal,
valid and binding obligation of Kaiser enforceable against Kaiser in
accordance with its respective terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other laws
relating to or affecting creditors' rights generally and general equitable
principles (whether considered in a proceeding in equity or at law).
(c) TRANSFER OF KAISER INTERESTS; LEASE OF REAL PROPERTY. The
instruments of conveyance, transfer and assignment executed and delivered by
Kaiser in connection with the transfer of the Kaiser Interests to Accuride
and the Surplus Assets to the Company have been duly authorized, executed and
delivered by Kaiser and are valid and effective to vest in Accuride all of
the right, title and interest of Kaiser in and to the Kaiser Interests and to
vest in the Company all of the right, title and interest of Kaiser in and to
the Surplus Assets, in each case free and clear of any Liens known to us.
The Restated Lease is valid and effective to vest in AKW a valid leasehold
interest and the exclusive right to use and occupy the Additional Premises
except as otherwise set forth in the Restated Lease, free and clear of any
Liens known to us, other than Permitted Real Property Liens.
(d) NO CONFLICTS. The execution, delivery and performance of the
Purchase Agreement and the Restated Lease by Kaiser and the consummation by
Kaiser of the transactions contemplated thereby, do not and will not (i)
conflict with the Certificate of Incorporation or By-Laws of Kaiser, (ii)
constitute a breach or violation of, or default under, any mortgage,
agreement, deed of trust, indenture, lease, contract or other instrument
known by us or by which all of its properties or assets are bound, including
without limitation the Credit Agreement, dated as of February 15, 1994, as
amended, between Kaiser, Kaiser Aluminum Corporation, a Delaware corporation,
the various Lenders a party thereto, and BankAmerica Business Credit, Inc., a
Delaware corporation, and all collateral agreements related thereto, except
for such violations as could not reasonably be expected to have (x) a
material adverse effect on Kaiser or (y) a material adverse effect on the
ability of Kaiser to perform its obligations thereunder or (iii) to our
knowledge, result in the creation or imposition of any Liens on any of the
properties or assets of Kaiser, other than Permitted Real Property Liens.
(e) GOVERNMENT AUTHORIZATIONS. To our knowledge, no consent,
approval or authorization of, or filing with, any Governmental Authority of
the States of New York or Delaware or of the federal government of the United
States or any third party is required to be obtained or filed on the part of
Kaiser in connection with the execution and delivery of the
<PAGE>
Purchase Agreement and the Restated Lease or the consummation of the
transactions contemplated thereby, other than any consents, approvals,
authorizations or filings the failure to obtain which would not, individually
or in the aggregate, have a Company Material Adverse Effect or have a
material adverse effect on the ability of Kaiser to perform its obligations
under the Purchase Agreement and the Restated Lease.
I call your attention to the fact that I am admitted to practice law
only in the State of California, the Commonwealth of Pennsylvania and the
District of Columbia, and, in rendering the foregoing opinion, I do not
express any opinion as to any laws other than the laws of the State of
California and the Commonwealth of Pennsylvania, the Federal laws of the
United States of America and the General Corporation Law of the State of
Delaware.
This opinion is being delivered to you solely for your benefit, and
neither this opinion nor any part hereof may be delivered to, or used or
relied upon by any other person or for any other purpose without my express
prior written consent.
Very truly yours,
E. Bruce Butler
Vice President and General Counsel
<PAGE>
Exhibit C
Surplus Assets Bill of Sale
<PAGE>
BILL OF SALE
Kaiser Aluminum & Chemical Corporation, a Delaware corporation
("KAISER"), for good and valuable consideration, the sufficiency and receipt
of which is hereby acknowledged, hereby sells, transfers, and delivers to AKW
L.P., a Delaware limited partnership ("AKW"), all of Kaiser's right, title
and interest in and to the assets identified on Exhibit A attached hereto
(collectively, the "SURPLUS ASSETS"). Capitalized terms used but not
otherwise defined in this Bill of Sale, including Schedule 1 attached hereto,
shall have the meaning assigned to them in the Purchase Agreement dated as of
April 1, 1999, by and among Accuride Ventures, Inc., a Delaware corporation,
Accuride Corporation, a Delaware corporation, and Kaiser (the "PURCHASE
AGREEMENT")
Kaiser hereby disclaims all other representations or warranties
expressed or implied as to the condition, value or quality of the Surplus
Assets, and specifically disclaims with respect to the Surplus Assets any
representations and warranties of merchantability, usage or fitness for any
particular purpose, it being Kaiser's intent, except as otherwise provided in
the Agreement, to convey the Surplus Assets sold hereby AS IS, WHERE IS.
Notwithstanding the foregoing, Kaiser represents and warrants that Kaiser has
good and marketable title to the Surplus Assets and upon the consummation of
the transactions contemplated hereby, AKW will acquire good and marketable
title to the Surplus Assets free and clear of any and all liens, claims or
encumbrances and Kaiser agrees to indemnify and hold AKW harmless from any
loss, claim or liability arising from the breach of these representations or
warranties.
Kaiser shall execute and deliver such further instruments of transfer
and assignment as AKW may reasonably request to effect the transfer and
assignment of the Surplus Assets to AKW.
IN WITNESS WHEREOF, Kaiser has executed this Bill of Sale as of
April 1, 1999.
KAISER ALUMINUM & CHEMICAL
CORPORATION
By:
---------------------------
Name: Jack A. Hockema
Title: Vice President
<PAGE>
Schedule 1
<PAGE>
Exhibit D
Environmental Assets Bill of Sale
<PAGE>
BILL OF SALE
Kaiser Aluminum & Chemical Corporation, a Delaware corporation
("KAISER"), for good and valuable consideration, the sufficiency and receipt
of which is hereby acknowledged, hereby sells, transfers, and delivers to AKW
L.P., a Delaware limited partnership ("AKW"), all of Kaiser's right, title
and interest in and to the assets identified on Exhibit A attached hereto
(collectively, the "ENVIRONMENTAL ASSETS"). Capitalized terms used but not
otherwise defined in this Bill of Sale, including Exhibit A attached hereto,
shall have the meaning assigned to them in the Contribution Agreement among
Accuride Corporation, a Delaware corporation, AKW General Partner L.L.C., a
Delaware limited liability company, AKW and Kaiser dated as of May 1, 1997
(the "CONTRIBUTION AGREEMENT").
Kaiser hereby disclaims all other representations or warranties
expressed or implied as to the condition, value or quality of the
Environmental Assets, and specifically disclaims with respect to the
Environmental Assets any representations and warranties of merchantability,
usage or fitness for any particular purpose, it being Kaiser's intent, except
as otherwise provided in the Agreement, to convey the Environmental Assets
sold hereby AS IS, WHERE IS. Notwithstanding the foregoing, Kaiser represents
and warrants that AKW will acquire good and marketable title to the
Environmental Assets free and clear of any and all liens, claims or
encumbrances and Kaiser agrees to indemnify and hold AKW harmless from any
loss, claim or liability arising from the breach of these representations or
warranties. Nothing contained herein shall be deemed to alter or limit
Kaiser's obligations with respect to the Environmental Compliance Plan under
the Contribution Agreement.
Kaiser shall execute and deliver such further instruments of transfer
and assignment as AKW may reasonably request to effect the transfer and
assignment of the Environmental Assets to AKW.
IN WITNESS WHEREOF, Kaiser has executed this Bill of Sale as of
April 1, 1999.
KAISER ALUMINUM & CHEMICAL
CORPORATION
By:
---------------------------
Name: Jack A. Hockema
Title: Vice President
<PAGE>
Exhibit A
1. All of the machinery and equipment acquired by or on behalf of Kaiser and
installed at the Erie Facility pursuant to the Environmental Compliance
Plan, including, but not limited to, all machinery and equipment relating
to the Wet Venturi Scrubbers (Unit ID Nos. 22-13 and 22-15) located in
Building 12 at the Erie Facility for the 5000 and 8000 ton hydraulic
presses located in Building 22 at the Erie Facility, including hood
enclosures, ductwork, venturi scrubber fan, silencer and stack, process
controls and wash system.
2. To the extent assignable, all of Kaiser's rights and interests in and to
all contracts entered into by or on behalf of Kaiser in connection with
the installation of the foregoing equipment, including all purchase
orders, engineering contracts and construction contracts.
<PAGE>
Exhibit E
Assignment and Assumption of Limited Partnership Interest and
Limited Liability Company Interest
<PAGE>
ASSIGNMENT AND ASSUMPTION OF LIMITED PARTNERSHIP INTERESTS AND LIMITED LIABILITY
COMPANY INTERESTS
This Assignment and Assumption of Limited Partnership
Interests and Limited Liability Company Interests (the "Agreement") is made
and entered into as of April 1, 1999 (the "Effective Date"), by and between
Kaiser Aluminum & Chemical Corporation, a Delaware corporation ("Kaiser"),
and Accuride Corporation, a Delaware corporation ("Accuride"). Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed
thereto in the Purchase Agreement (as defined below).
RECITALS
WHEREAS, Accuride, acting through Accuride Sub, and Kaiser formed the
General Partner, to act as the general partner of AKW L.P., a Delaware
limited partnership ("AKW"); Accuride Sub and Kaiser each own a fifty percent
(50%) membership interest in the General Partner; and Accuride Sub, Kaiser
and Accuride (in its capacity as guarantor of Accuride Sub) entered into the
Limited Liability Company Agreement.
WHEREAS, Accuride Sub and Kaiser each own a forty-nine percent (49%)
limited partnership interest in AKW; the General Partner owns a two percent
(2%) limited partnership interest in AKW; and Accuride Sub, Kaiser, the
General Partner and Accuride (in its capacity as guarantor of Accuride Sub)
entered into the Limited Partnership Agreement.
WHEREAS, Accuride desires to purchase, and Kaiser desires to sell,
Kaiser's fifty percent (50%) Interest (as defined in the Limited Liability
Company Agreement) in the General Partner, Kaiser's forty-nine percent (49%)
Interest (as defined in the Limited Partnership Agreement) in AKW
(collectively, the "Kaiser Interests") pursuant to a Purchase Agreement (the
"Purchase Agreement") dated as of March 31, 1999 by and among Accuride,
Kaiser and Accuride Sub, whereby upon consummation of the Transactions (as
defined below in the Purchase Agreement), Accuride Sub and Accuride shall
collectively hold one hundred percent (100%) of the Interest (as defined in
the Limited Liability Company Agreement) in the General Partner and a
ninety-eight percent (98%) Interest (as defined in the Limited Partnership
Agreement) in AKW.
WHEREAS, pursuant to the Purchase Agreement, Kaiser
hereby desires to assign to Accuride, and Accuride desires to accept an
assignment from Kaiser of, the entirety of Kaiser's Interests, together with
all rights, duties and obligations related thereto (the "Transferred
Interest"), and each of them intends concurrently therewith that Accuride
shall become a substitute Limited Partner of AKW and a substitute Member of
the General Partner, as applicable, with respect to the Transferred Interest,
subject to the terms of the Limited Partnership Agreement and the Limited
Liability Company Agreement, as applicable, and this Agreement.
WHEREAS, General Partner has consented to the assignment
of Kaiser's
<PAGE>
forty-nine percent (49%) Interest (as defined in the Limited Partnership
Agreement) pursuant to that certain Consent dated as of the date hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and for other good and valuable consideration, the receipt
and sufficiency which are hereby acknowledged, the parties hereto, intending
to be legally bound, agree as follows:
A. AGREEMENT TO ASSIGN AND ACCEPT TRANSFERRED INTEREST
Effective as of April 1, 1999:
1. Kaiser assigns and transfers to Accuride all right,
title and interest in and to the entirety of the Transferred Interest.
2. Accuride accepts the assignment and transfer from
Kaiser of said Transferred Interest and agrees to be bound by the terms of
the Limited Partnership Agreement and the Limited Liability Company Agreement.
B. INTENT OF SUBSTITUTION
Accuride shall succeed Kaiser as a Limited Partner of AKW and a
Member of the General Partner and Kaiser shall have no further interest
whatsoever in AKW and the General Partner. Kaiser and Accuride hereby agree
to execute such other instruments, and take such other actions, as may be
deemed necessary to admit Accuride as a substitute Limited Partner of AKW and
substitute Member of the General Partner.
IN WITNESS WHEREOF, the parties have executed this Assignment
and Assumption of Limited Partnership Interests and Limited Liability Company
Interests as of the day and year first above written.
Kaiser Aluminum & Chemical Corporation,
a Delaware corporation
By:
---------------------------
Name: Jack A. Hockema
Title: Vice President
Accuride Corporation,
a Delaware corporation
By:
---------------------------
Name:
-------------------------
Title:
------------------------
<PAGE>
Exhibit F
Acknowledgment of Limited Partnership Interest and Limited
Liability Company Interest
<PAGE>
ACKNOWLEDGMENT OF LIMITED PARTNERSHIP INTEREST AND LIMITED
LIABILITY COMPANY INTEREST
Pursuant to a Purchase Agreement (the "Purchase
Agreement") dated as of April 1, 1999 by and among Kaiser Aluminum & Chemical
Corporation, a Delaware corporation ("Kaiser"), Accuride Corporation, a
Delaware corporation ("Accuride"), and Accuride Ventures, Inc., a Delaware
corporation and a wholly owned subsidiary of Accuride ("Accuride Sub"), this
certificate acknowledges that Accuride will become the holder of fifty
percent (50%) Interest (as defined in the Limited Liability Company
Agreement) in the General Partner and forty-nine percent (49%) Interest (as
defined in the Limited Partnership Agreement) in the Company, upon the
execution of the attached Assignment and Assumption of Limited Partnership
Interests and Limited Liability Company Interests by Kaiser and Accuride of
even date herewith. Capitalized terms used herein without definition shall
have the meanings ascribed to them in the Purchase Agreement.
IN WITNESS WHEREOF, this Acknowledgment of Limited Partnership
Interests and Limited Liability Company Interests is executed as of April 1,
1999.
KAISER ALUMINUM & CHEMICAL CORPORATION
By:
---------------------------
Name: Jack A. Hockema
Title: Vice President
<PAGE>
Exhibit G
Acknowledgment and Certificate
<PAGE>
Acknowledgment and Certificate
Acknowledgment and Certificate dated as of April 1, 1999, by AKW L.P.,
a Delaware limited partnership (the "Company"), and AKW General Partner
L.L.C., a Delaware limited liability company (the "General Partner").
WHEREAS, Accuride Ventures, Inc., a Delaware corporation and
wholly-owned subsidiary of Accuride Corporation ("Accuride Sub"), Accuride
Corporation, a Delaware corporation ("Accuride"), and Kaiser Aluminum &
Chemical Corporation, a Delaware corporation ("Kaiser") have entered into
that certain Purchase Agreement dated as of April 1, 1999 (the "Purchase
Agreement"), pursuant to which Kaiser is selling all of its interests in the
Company and the General Partner to Accuride;
WHEREAS, the Purchase Agreement contains certain terms and conditions
which affect the Company and the General Partner and modify the terms of the
Limited Liability Company Agreement and the Limited Partnership Agreement;
and
WHEREAS, Section 6.3(c) of the Purchase Agreement requires the
execution and delivery of this Acknowledgment and Certificate as a condition
to Kaiser's obligations thereunder.
NOW, THEREFORE, the Company and the General Partner, intending to be
legally bound hereby, each acknowledge and certify the following:
1. DEFINITIONS. Capitalized terms used but not otherwise defined in this
Acknowledgment and Certificate shall have the meanings assigned to them
in the Purchase Agreement.
2. INSURANCE. To its knowledge, (i) the policies or binders of insurance as
identified on Schedule 4.8 of the Purchase Agreement which the Company is
the owner, insured or beneficiary are in full force and effect on the
date hereof and, (ii) except as otherwise set forth on Schedule 4.8,
shall be kept in full force and effect through April 30, 1999.
3. TAX MATTERS. To its knowledge, (i) Kaiser has acted as the tax matters
partner under the Partnership Agreements in accordance with the terms
thereof, (ii) the Company and the General Partner have not received a
ruling from any taxing authority or signed an agreement with any taxing
authority that could reasonably be expected to have a Company Material
Adverse Effect, and (iii) there is no expectation that any taxing
authority may claim or assess any new or additional Taxes payable by the
Company or the General Partner for any period ending on or prior to the
Closing Date that could reasonably be expected to have a Company Material
Adverse Effect.
4. ADDITIONAL PREMISES. To its knowledge, (ii) there is no violation of any
restriction, condition, covenant or agreement applicable to or affecting
the Additional Premises, any part thereof or use thereof, contained in
any deed, subdivision map or other instrument, except which, individually
or in the aggregate, would not reasonably be expected to have
<PAGE>
a Company Material Adverse Effect, and (ii) Kaiser and/or the Company
have all easements, rights of way and similar authorizations required for
the ownership and use of the Additional Premises by the Company for the
conduct of its business as currently conducted.
5. CLAIMS. Following the Closing, to its knowledge, it will not have any
outstanding (i) claims against Kaiser or any of Kaiser's Affiliates
arising from or in connection with the breach or alleged breach of any
agreement pursuant to which Kaiser or any of Kaiser's Affiliates is a
party, or (ii) receivables from Kaiser or any of Kaiser's Affiliates
other than trade receivables arising in the ordinary course of business.
6. CONTRIBUTION AGREEMENT. To its knowledge, upon the Closing of the
Transactions, Kaiser will have satisfied any known obligations to it
under the Contribution Agreement and the Erie Lease Agreement and with
respect to the Landlord's Work (as defined in the Erie Lease Agreement).
7. AGREEMENTS. To its knowledge, Schedule 4.14 of the Purchase Agreement
sets forth all existing material agreements, contracts, leases, purchase
orders, undertakings, understandings, covenants not to compete,
confidentiality agreements, licenses, obligations or other commitments,
whether oral or written, currently in effect between Kaiser and any of
its subsidiaries, on one hand, and the Company or the General Partner, on
the other hand.
8. TERMINATION OF CERTAIN AGREEMENTS. Unless sooner terminated upon the
mutual written agreement of the parties thereto and except as otherwise
set forth herein, each of the Kaiser Technical Services Agreement and the
Kaiser Production Services Agreement shall, and shall be deemed to,
terminate on August 31, 1999. Unless sooner terminated upon the mutual
written agreement of the parties thereto and except as otherwise set
forth herein, the Kaiser Administrative Services Agreement shall, and
shall be deemed to, terminate on August 31, 1999, with respect to all
services currently being provided by Kaiser thereunder other than tax
services which shall continue through the timely preparation and filing
of the tax returns specified in Section 8.10 of the Purchase Agreement.
Kaiser shall, pursuant to the terms of those agreements, continue to be
paid and reimbursed for any such services that it continues to provide.
9. TERMINATION OF CERTAIN SERVICES. Effective as of April 2, 1999, or such
other date mutually agreed to in writing by the parties hereto, Accuride
or Accuride Sub, shall assume control of all of the cash management,
treasury and hedging activities currently being performed by Kaiser for
the General Partner and the Company.
10. RECALL CAMPAIGN. Notwithstanding any other provision to the contrary
contained in the Contribution Agreement, any other Formation Agreement or
otherwise, the Company shall be solely responsible for the Recall
Campaign and all liabilities, costs and expenses of the Recall Campaign
(the "Recall Costs") and Kaiser shall not have any liability to the
Company, the General Partner, Accuride, Accuride Sub or any of their
Affiliates for the
3
<PAGE>
Recall Costs, whenever incurred. This paragraph does not create
additional indemnification rights except as set forth in the Formation
Agreements and indemnification against the Company for the Recall Costs.
Notwithstanding the foregoing, the parties hereto agree that the cause
of the Recall Campaign has not been mutually agreed upon by the parties
hereto and that this paragraph does not amend, limit or otherwise modify
in any manner any of the respective parties's rights and obligations
under the Formation Agreements for any other liabilities, costs or
expenses arising from the wheels which are the subject of the Recall
Campaign, including third party claims or any claims based on product
defects.
11. COVENANT NOT TO COMPETE. Effective as of the Closing Date, neither
Kaiser, Accuride, Accuride Sub nor any of their respective Affiliates
shall have any obligations under Section 11.2 of each of the Partnership
Agreements. In lieu of the foregoing, Section 8.5 of the Purchase
Agreement shall set forth the limitations on Kaiser's activities in that
regard.
12. INSPECTION OF BOOKS AND RECORDS. (a) Following the Closing, Kaiser
and/or its representatives and agents, at Kaiser's expense and at
reasonable times during business hours, shall have the right to inspect
and make copies and extracts of all books of account and all financial,
legal and business records (which books of account, financial, legal and
business records shall be retained for not less than seven years after
the Closing Date) of (i) the Company and the General Partner, as well as
access to, and the cooperation of, any employee of the Company or General
Partner having knowledge of the information therein contained and the
right to discuss the matters recorded in such books and records with the
independent certified accountants retained by the Company and/or General
Partner, in each instance if such inspection, access and cooperation are
for any reasonable purpose, including without limitation (1) preparation
for proceedings, claims, actions, suits, investigations or disputes to
which Kaiser is a party relating to the conduct of the business prior to
the Closing Date by Kaiser, Accuride, the Company and/or the General
Partner, (2) any proceedings, claims, actions, suits, investigations or
disputes between Kaiser and the Company, the General Partner, Accuride
and/or Accuride Sub relating to the conduct of the business prior to the
Closing Date by Kaiser, Accuride, the Company and/or the General Partner,
(3) performance of accounting or tax reviews or audits of the business
conducted by the Company or the General Partner relating to periods prior
to the Closing Date or (4) any purpose reasonably related to Kaiser's
ownership of its Interest in the Company and/or the General Partner;
provided, that such inspection, access or cooperation shall not
unreasonably interfere with the normal operations of the Company and
Kaiser and/or its representatives shall not be entitled to any such
inspection, access or cooperation (i) as to which the attorney-client
privilege applies or (ii) the disclosure of which is restricted
Applicable Law except in strict compliance with such law.
13. PROPERTY TAXES. Property taxes for 1999 shall be allocated to the short
period ending on the Closing Date based on the actual number of calendar
days in each period (it being understood that the foregoing shall not
alter, amend or otherwise modify the terms of the Restated Lease).
4
<PAGE>
14. TAX RETURNS. Kaiser shall be responsible for the timely preparation of
all 1998 tax returns required to be filed for the General Partner and the
Company consistent with past practice in accordance with the Partnership
Agreements and the Kaiser Administrative Services Agreement. Kaiser
shall also be responsible for the timely preparation of 1999 tax returns
for the period through the Closing Date. With respect to the period from
January 1, 1999 through the Closing Date, no elections shall be made or
positions taken that are not consistent with past practice. Kaiser shall
remain the owner of the Kaiser Interests for income tax purposes through
the Closing Date.
15. CONFIDENTIAL INFORMATION. Effective as of the Closing Date Kaiser shall
not have any obligations under Section 11.1 of each of the Partnership
Agreements. In lieu thereof, effective as of the Closing Date Kaiser
obligations with respect to confidential information shall be governed by
Section 8.16 of the Purchase Agreement.
16. USE OF NAMES. Neither the Company nor the General Partner will, directly
or indirectly, use in any manner whatsoever, or allow any of their
respective Affiliates to use in any manner whatsoever, the Kaiser Marks
after the Closing Date. Notwithstanding the foregoing, the Company and
the General Partner may continue to use the Kaiser Marks during the six
month period beginning on the Closing Date in connection with the use of
existing inventories or materials and supplies containing any such Kaiser
Marks.
17. DISTRIBUTIONS. The General Partner and the Company shall have been
deemed to have authorized pursuant to Sections 5.1 of Limited Partnership
Agreement and the Limited Liability Company Agreement, respectively,
distributions in an amount equal to net cash distributions received by
Accuride Sub and Kaiser from the General Partner and the Company at any
time through March 31, 1999, in connection with the sweeping of the
accounts maintained by the Company and/or General Partner and
distribution of such amounts to Accuride Sub and Kaiser in the ordinary
course of business of the Company and the General Partner.
18. ENGINEERING STORES. Within thirty (30) days of the Closing Date, the
Company shall return to Kaiser all surplus engineering stores in its
possession for which it has not reimbursed Kaiser.
19. FUNDING REQUIREMENTS. From and after the date hereof, Accuride and
Accuride Sub shall assume the financial obligations of the Company and
the General Partner, fund one hundred percent (100%) of the cash
infusions required by the Company and the General Partner and receive one
hundred percent (100%) of the cash distributions from the Company and the
General Partner made in the ordinary course of business and consistent
with past practice.
20. KNOWLEDGE. For purposes of this Acknowledgment and Certificate,
knowledge with respect to the Company and the General Partner shall mean
the actual knowledge of Richard Giromini, Dave Hixson and Al Prus.
5
<PAGE>
21. FORMATION AGREEMENTS. Each of the General Partner, the Company and
Kaiser agrees that the representations and warranties set forth in
Sections 2 through 7 of this Acknowledgment and Certificate shall not
amend, limit or otherwise modify in any manner any of the respective
parties' rights and obligations under any of the Formation Agreements;
provided, however that the foregoing shall not preclude Kaiser from
asserting a claim hereunder arising from a breach of any such
representation or warranty.
IN WITNESS WHEREOF, the Company and General Partner have caused this
Acknowledgment and Certificate to be duly executed in their respective
corporate names by their respective officers, each of whom is duly and
validly authorized and empowered, all on and as of the date first above
written.
AKW L.P., by its sole general partner, AKW GENERAL PARTNER L.L.C.
AKW GENERAL PARTNER L.L.C.,
By: By:
-------------------------- ---------------------------
Name: Name:
------------------------ -------------------------
Title: Title:
------------------------ -------------------------
Agreed and Acknowledged:
KAISER ALUMINUM & CHEMICAL
CORPORATION
By:
--------------------------
Name: Jack A. Hockema
Title: Vice President
<PAGE>
CERTIFICATION PURSUANT TO INTERNAL REVENUE CODE SECTION 1445
Section 1445 of the Internal Revenue Code of 1986 (the "Code") provides
that a transferee of a U.S. real property interest, as defined in Section
897(c) of the Code, must withhold tax if the transferor is a foreign person.
To inform the transferee that withholding of tax is not required upon the
disposition by Kaiser Aluminum & Chemical Corporation (the "Company") to
Accuride Corporation of all of the Company's interests in AKW L.P. and AKW
General Partner L.L.C. (collectively, the "Kaiser Interests"), the
undersigned hereby certifies the following on behalf of the Company:
1. The Company is not a nonresident alien, foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined
in the Code and/or Treasury regulations);
2. The Kaiser Interests do not constitute a "U.S. real property interest"
(as defined in Section 897(c) of the Code);
2. The Company's U.S. taxpayer identification number is 94-0928288; and
3. The Company's address is: 5847 San Felipe, Suite 2600
Houston, Texas 77057
The Company understands that this certification may be disclosed to
the Internal Revenue Service by the transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct,
and complete, and I further declare that I have authority to sign this
document on behalf of the Company.
KAISER ALUMINUM & CHEMICAL
CORPORATION
By:
---------------------------
Name: Jack A. Hockema
Title: Vice President
<PAGE>
Funds Flow Memorandum
This memorandum describes the flow of funds in connection with the
sale of the Kaiser Interests to Accuride Corporation, a Delaware corporation
("ACCURIDE"), pursuant to the terms of the Purchase Agreement dated as of
April 1, 1999, by and among Accuride Ventures, Inc., a Delaware corporation
and wholly-owned subsidiary of Accuride ("ACCURIDE SUB"), Kaiser Aluminum &
Chemical Corporation, a Delaware corporation ("KAISER"), and Accuride (the
"PURCHASE AGREEMENT"). Capitalized terms used but not otherwise defined in
this memorandum have the meanings assigned to them in the Purchase Agreement:
<TABLE>
<CAPTION>
Amount Payable To Amount Payable To Amount Payable To
Item or Issue (By) Kaiser (By) Accuride (By) the Company
- ------------- ----------------- ----------------- -----------------
<S> <C> <C> <C>
Purchase Price $71,000,000.00 ($71,000,000.00) $ 0.00
Phase I Improvements and (143,813.99) 0.00 143,813.99
Environmental Compliance Plan
Water Main Break (5,898.71) 0.00 5,898.71
Mellon Leasing (double payment)* (46,709.05) 0.00 46,709.05
Ron Golas (3,024.23) 0.00 3,024.23
Arbon Equip. Corp. (door repair) (4,298.04) 0.00 4,298.04
Clerical Temp. (218.50) 0.00 218.50
Erie Utilities (7/98 through 3/99) (90,000.00) 0.00 90,000.00
Estimated Cash Adjustment (265,000.00) 265,000.00 0.00
Totals: $70,441,037.48 ($70,735,000.00) $293,962.52
</TABLE>
*Kaiser is assuming that the Company's position is accurate for purposes
hereof without prejudicing its position in the event the Company's position
is in error.
<PAGE>
AMENDED AND RESTATED LEASE AGREEMENT
THIS AMENDED AND RESTATED LEASE AGREEMENT (the "LEASE"), dated as of
April 1, 1999, between KAISER ALUMINUM & CHEMICAL CORPORATION, a Delaware
corporation (the "LANDLORD"), and AKW L.P., a Delaware limited partnership,
having an address at 3560 West Market Street, Suite 315, Akron, Ohio 44333
(the "TENANT") amends and restates that certain Lease Agreement dated as of
May 1, 1997, between Landlord and Tenant (the "ORIGINAL LEASE").
W I T N E S S E T H :
WHEREAS, Landlord, Accuride Corporation (collectively, the
"CONTRIBUTING PARTIES"), Tenant and AKW General Partner L.L.C., a Delaware
limited liability company, entered into a Contribution Agreement, dated as of
May 1, 1997 (the "CONTRIBUTION AGREEMENT"), pursuant to which, INTER ALIA,
the Contributing Parties contributed or otherwise caused to be transferred to
Tenant certain assets and rights necessary to permit Tenant to engage in the
Business (as defined in the Contribution Agreement); and
WHEREAS, Landlord is the owner of certain improved real property
located at 1015 E. 12th Street, Erie, Pennsylvania (the "PLANT") at which
Landlord conducted certain businesses, including without limitation, certain
aspects of the Business; and
WHEREAS, pursuant to the Contribution Agreement, Landlord and Tenant
agreed to enter into the Original Lease in order to provide for the leasing
by Landlord to Tenant of certain portions of the Plant used in connection
with the Business, all on the terms and conditions provided therein; and
WHEREAS, subsequent to the execution of the Original Lease, Landlord
ceased to independently conduct manufacturing operations at the Plant and
Tenant began to utilize space at the Plant in addition to the Demised
Premises (as defined in the Original Lease); and
WHEREAS, the Landlord and Tenant desire to enter into this Amended and
Restated Lease Agreement in order to amend the Original Lease to include the
Additional Premises (as defined) and to incorporate certain other changes and
modifications reflected herein;
NOW, THEREFORE, in consideration of the mutual covenants, and subject
to the terms and conditions, contained herein, the parties hereto agree as
follows:
<PAGE>
ARTICLE 1
PREMISES - TERM
Section 1.1 (a) (i) The Landlord, for and in consideration of the
rents, covenants and agreements contained in this Lease to be paid, kept and
performed by the Tenant, demises and leases to the Tenant, and the Tenant
does hereby take and hire, upon and subject to the covenants, terms,
conditions and agreements in this Lease, which the Tenant agrees to keep and
perform, certain portions of the Plant which are described below and are
shown on EXHIBIT "A-1" attached hereto and made a part hereof:
(1) Building 11- an approximately 26,650 square foot building used for
the storage of raw materials, billet preparation and storage for
maintenance and production supplies;
(2) Building 22- an approximately 52,650 square foot building which
houses the hydraulic presses used to forge and extrude aluminum
products, and also houses the hydraulic pumps and contains office
space and a maintenance area;
(3) Building 26 - an approximately 33,750 square foot building used
for receiving production and maintenance supplies, shipping
products and spinning and heat treating products;
(4) Building 16 - an approximately 2,500 square foot building which
houses certain employee lockers;
(5) The second floor of the Administration Building;
(6) The training room located in Building 1 comprising an
approximately 1,600 square foot area;
(7) The dispensary located in Building 2 comprising an approximately
800 square foot area;
(8) Building 15A - an approximately 1,800 square foot building used to
house compressors;
(9) Building 19 - an approximately 800 square foot building used as an
oil house;
(10) Building 24 - an approximately 6,500 square foot building used as
a battery shop;
(11) The Substation;
(12) Building 3 - an approximately 16,575 square foot building used as
a die shop;
2
<PAGE>
(13) Building 4 - an approximately 16,575 square foot building used as
a die shop;
(14) The southern portion of Building 9 - comprising an approximately
2,200 square foot space used as a spinner/furnace loading area;
(15) Building 10 - an approximately 16,800 square foot building used as
a storage and layout area;
(16) Building 12 - an approximately 77,109 square foot area, including
Buildings 12A, 12B, 12N and 12S, which houses certain maintenance
areas, a maintenance and scrap loading dock and solution/aging
furnaces;
(17) Building 13 - an approximately 2,800 square foot area used for lab
and engineering purposes; and
(18) Building 25 - an approximately 6,500 square foot store room.
(ii) For purposes of this Lease, items (1) through (4) and the
eastern portion of item (5) above are collectively referred to in this Lease
as the "ORIGINAL DEMISED PREMISES", items (6) through (11) are collectively
referred to in this Lease as the "DESIGNATED ORIGINAL LICENSED PREMISES", and
the remaining portion of item (5) and items (12) through (18) above are
collectively referred to in this Lease as the "ADDITIONAL PREMISES", and the
Original Demised Premises, the Designated Original Licensed Premises and the
Additional Premises are collectively referred in this Lease to as the
"DEMISED PREMISES".
(iii) The Landlord also hereby grants to the Tenant, its agents,
employees, vendors and contractors a license to use, during the Term, on a
non-exclusive basis, the roadways, sidewalks, designated parking lots,
portions of the Plant not within the Demised Premises as reasonably necessary
in order for AKW to traverse from one portion of the Demised Premises to
another in connection with the operation of its business, and other areas as
generally shown on EXHIBIT "A-1" attached hereto and made a part hereof as
the "Licensed Premises" (the "LICENSED PREMISES", and together with the
Demised Premises, the "PREMISES") for purposes of access to and parking in
the vicinity of the Demised Premises. Landlord may, at its option, at any
time during the Term after reasonable prior notice to Tenant (except in the
event of an emergency), relocate all or a portion of the Designated Original
Licensed Premises or Licensed Premises to other areas in the Plant, provided
that such alternative areas provide reasonable access to, and parking in the
vicinity of, the Demised Premises. The Tenant shall use the Premises in
accordance with the terms and conditions set forth in this Lease and in
Section 6.5 of the Contribution Agreement. Tenant acknowledges and agrees
that the privileges granted Tenant under this Section shall merely constitute
a license and shall not be deemed to grant Tenant a leasehold or other real
property interest in the Licensed Premises. This license shall automatically
terminate and expire upon the expiration or earlier termination of this Lease
and the termination of such license shall be self-operative and no further
instrument shall be required to effect such termination.
3
<PAGE>
(iv) The Premises shall specifically exclude any and all steam
tunnels at the Plant and the emergency generator room located between
Buildings 11 and 26 housing the diesel generator which provides emergency
lighting for the east end of the Plant (collectively, the "PROHIBITED
AREAS"), irrespective of whether such Prohibited Areas or access thereto lies
within or beneath any portion of the land or improvements comprising the
Premises. Notwithstanding the foregoing, Tenant may access the Prohibited
Areas as necessary for purposes of normal routine maintenance of equipment
located in those areas; provided that all such work is performed in
accordance with applicable laws and regulations, including applicable health
and safety regulations.
(b) The Landlord hereby leases to the Tenant the items of
personal property set forth on EXHIBIT "A-2" annexed hereto and made a part
hereof (the "ORIGINAL PERSONAL PROPERTY") and the items of personal property
set forth on EXHIBIT "A-3" annexed hereto and made a part hereof (the "NEW
PERSONAL PROPERTY", the Original Personal Property and the New Personal
Property being collectively referred to herein as the "PERSONAL PROPERTY").
Section 1.2 (a) This Lease shall have an initial term of ten
(10) years (the "INITIAL TERM"), which Initial Term commenced on May 1, 1997
(the "COMMENCEMENT DATE") and shall expire on the day (the "EXPIRATION DATE")
immediately preceding the tenth (10th) anniversary of the Commencement Date,
unless the Initial Term shall be extended or sooner terminated as hereinafter
provided (the Initial Term, as the same may be extended from time to time,
the "TERM").
(b) Provided that this Lease is in full force and effect and
that the Tenant is not then in default hereunder beyond any applicable grace
periods, the Tenant shall have the right to renew this Lease for three (3)
periods of five (5) years each (each, a "RENEWAL PERIOD"), exercisable by
delivery of a written notice ("TENANT'S RENEWAL NOTICE") received by Landlord
no later than one hundred eighty (180) days prior to the expiration of the
then-current Term. Each Renewal Period shall commence on the day following
the expiration date of the Initial Term or the immediately preceding Renewal
Period, as the case may be, and shall end on the fifth (5th) anniversary of
such expiration date. Upon the exercise by the Tenant from time to time of
its right to renew as aforesaid, this Lease shall be deemed extended through
the last day of the applicable Renewal Period upon the terms and conditions
herein set forth except that the Basic Rent (as hereinafter defined) payable
during the Renewal Period shall be fixed in accordance with the provisions of
Section 2.1(a) and Section 2.1 (b) below.
(c) The Tenant shall have the right to terminate this Lease
at any time during the Term by giving the Landlord at least one hundred
eighty (180) days' prior written notice of such termination, which notice
shall specify the termination date. In the event of such termination, all
Basic Rent and Additional Rent shall be apportioned as of the termination
date set forth in Tenant's termination notice.
(d) The portions of the Plant being used by Tenant shall not
be increased without Landlord's prior written consent, which consent shall
not be unreasonably withheld. Tenant shall have the right to vacate any
portion of the Premises pursuant to the terms of this
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Lease. The parties hereto acknowledge and agree to communicate and
coordinate any contemplated increase or decrease in the portions of the Plant
included within the Premises and to promptly enter into written amendments to
this Lease to reflect any increase or decrease and reflect any necessary
reallocations of the appropriate costs.
ARTICLE 2
BASIC RENT - ADDITIONAL RENT
Section 2.1 (a) The Tenant shall pay to the Landlord during
the Initial Term an annual basic rent (the "BASIC RENT") equal to One Dollar
per annum, which Basic Rent shall be payable in advance on January 2 of each
year during the Initial Term. If the Term is extended pursuant to Section
1.2(b), the Basic Rent for the first Renewal Period shall be equal to One
Dollar per annum, which Basic Rent shall be payable in advance on January 2
of each year during the first Renewal Period.
(b) If the Term is extended from time to time for any
Renewal Period after the first Renewal Period, as provided in Section 1.2 (b)
above, the Basic Rent for such Renewal Period (the "RENEWAL RENT") shall be
determined as provided in this Section 2.1(b). Upon receipt of Tenant's
Renewal Notice, the Landlord and the Tenant shall attempt for thirty (30)
days to agree upon the Renewal Rent, which the parties agree shall be the
fair market rental value of the Demised Premises, taking into account the
Personal Property, the obligation of the Tenant to pay Taxes (hereinafter
defined) and other expenses allocated to the Demised Premises as provided
elsewhere in this Lease. Should the Landlord and the Tenant be unable to
agree on the Renewal Rent within such thirty (30) day period, the Tenant
shall, at its own cost, appoint a disinterested real estate broker licensed
in the State of Pennsylvania involved in the rental of similar space in the
area in which the Plant is located for at least five (5) years (a "QUALIFIED
BROKER") to serve as an appraiser on its behalf and shall give notice thereof
to the Landlord within sixty (60) days after the Landlord's receipt of the
Tenant's Renewal Notice. The Landlord shall, at its own cost, within thirty
(30) days after receiving said notice appoint a second Qualified Broker to
serve as appraiser on its behalf and shall give written notice thereof to the
Tenant. The Qualified Brokers shall independently, within thirty (30) days
after their appointment, render in writing to the Landlord and the Tenant
their independent appraisals of what the annual fair market rental value of
the Demised Premises would be for the applicable Renewal Period. If Landlord
and the Tenant or the two (2) Qualified Brokers cannot, within thirty (30)
days thereafter, agree on what the annual fair market rental value of the
Demised Premises would be for the applicable Renewal Period, the two (2)
Qualified Brokers theretofore appointed shall appoint a third Qualified
Broker. The third Qualified Broker shall then promptly select the amount set
forth in one or the other of the two appraisals theretofore prepared which
such Broker believes most closely approximates the annual fair market value
of the Demised Premises, and same shall be the Renewal Rent for the
applicable Renewal Period. The determination of the Qualified Broker(s)
shall conclusively be and be deemed to be the Renewal Rent and shall be
binding on Landlord and Tenant. In rendering their determination, the
Qualified Brokers shall have no power to modify or in any manner alter or
reform any of the provisions of this Lease. The cost of the third Qualified
Broker shall be shared equally by
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Landlord and Tenant. If, for any reason whatsoever, the Renewal Rent has
not been determined on or prior to the commencement of the applicable Renewal
Period, Tenant shall pay to the Landlord on account of Basic Rent (subject to
retroactive adjustment back to the beginning of the applicable Renewal
Period once the Basic Rent is determined) one hundred ten (110%) percent of
the Basic Rent payable by the Tenant immediately prior to the commencement of
the applicable Renewal Period.
Section 2.2 (a) In addition to the Basic Rent, the Tenant
shall pay and discharge, as additional rent (the "ADDITIONAL RENT"), any and
all other amounts, liabilities, charges, obligations and other payments which
the Tenant, under any of the provisions of this Lease, is now or hereafter
obligated to pay or discharge, as more particularly described in this Lease.
In the event of any failure on the part of the Tenant to pay all or any part
of the Additional Rent when due, the Landlord shall have the same rights and
remedies provided for herein or by applicable law or otherwise in the case of
the nonpayment of the Basic Rent.
(b) It is intended that the Basic Rent be net to the
Landlord and that the Tenant shall pay, as Additional Rent, all Taxes,
utilities, and other costs and expenses relating to the Demised Premises
(other than those environmental costs which Landlord shall pay pursuant to
Sections 6.3 and 6.4 of the Contribution Agreement) and an equitable portion
of such Taxes, utilities, insurance and other costs and expenses relating to
the Licensed Premises, all as reasonably determined by the Landlord and the
Tenant pursuant to the provisions of this Lease, including, without
limitation, Articles 4, 5, 6, 8 and 24 hereof, and taking into account the
total area occupied and their respective requirements based on usage. The
Landlord and the Tenant have agreed upon a preliminary allocation of certain
of these items as set forth in EXHIBIT "B" attached hereto and made a part
hereof (the "INITIAL EXPENSE ALLOCATIONS"), and as referenced below in
Section 24.4.
Section 2.3 During the term of this Lease, if the Tenant
shall fail to pay any installment of the Basic Rent or any of the Additional
Rent due or payable hereunder or in connection herewith, within 10 days after
Landlord notifies Tenant in writing that any such amount is due or payable,
in addition to all of the other rights and remedies of the Landlord
hereunder, the Tenant shall pay to the Landlord, in addition to all other
payments required to be made under this Lease, the amount not paid when due,
together with interest thereon, at a rate (the "INTEREST RATE") equal to the
lower of (i) 3% over the prime rate publicly announced from time to time by
Morgan Guaranty Trust Company of New York and (ii) the highest rate permitted
by applicable law, from the due date until the date of payment. All amounts
payable to the Landlord pursuant to this Section 2.3 shall constitute
Additional Rent.
ARTICLE 3
CONDITION OF PREMISES AND PERSONAL PROPERTY; LANDLORD'S WORK
Section 3.1 Except as otherwise provided in Section 3.2
below, Tenant acknowledges that it inspected the Original Demised Premises,
the Designated Original Licensed Premises, the Licensed Premises and the
Original Personal Property prior to the Commencement
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Date and agreed to take the same "as is", where is, and with all faults, and
Landlord has no obligation to prepare the foregoing for Tenant's occupancy.
In addition, Tenant has inspected the Additional Premises and the New
Personal Property, and agrees to take the same "as is", where is, and with
all faults, including but not limited to, the conditions noted in the
engineering reports identified in Section 8.5 hereof, and Landlord shall have
no obligation to prepare the Additional Premises or the New Personal Property
for Tenant's occupancy or use.
Section 3.2 Landlord agrees to perform the following work
("LANDLORD'S WORK"):
(a) the Phase 1 Improvements (as defined in the Contribution
Agreement), to the extent the same affect or relate to the Demised Premises;
(b) the work (the "ENVIRONMENTAL WORK") described in the
Environmental Compliance Plan (as defined in the Contribution Agreement), to
the extent the same affects or relates to the Demised Premises; and
(c) the removal of furnace No. 9 from Building 12 (the
"FURNACE REMOVAL WORK").
Section 3.3 Landlord shall use its reasonable efforts to
complete Landlord's Work in a timely manner assuming reasonable cooperation
from Tenant (subject to Unavoidable Delays (hereinafter defined)); provided,
however that Landlord shall have no obligation to employ contractors or labor
at so-called overtime or other premium pay rates or to incur any other
overtime costs or expenses whatsoever. Landlord's Work shall be performed on
a timely basis and in such a manner so as to minimize interference with the
operation of the Business by the Tenant. Landlord shall have the right to
enter the Demised Premises subsequent to the Commencement Date to perform
Landlord's Work and the payment of Basic Rent and Additional Rent shall not
be affected thereby; provided, that in all such cases Landlord shall provide
notice to Tenant, shall coordinate all required work with Tenant and
Landlord's activities shall not unreasonably interfere with Tenant's business
operations.
Section 3.4 The cost of performing the Phase I Improvements
and the Environmental Work shall be borne by the party or parties responsible
therefor under Sections 6.3 and 6.4 of the Contribution Agreement. The cost
of performing the Furnace Removal Work shall be borne by Landlord.
Section 3.5 The Tenant shall comply with the operations and
maintenance plan for the Pits (as defined in the Contribution Agreement) as
set forth in Schedule 6.3(a) to the Contribution Agreement and for the
Personal Property.
Section 3.6 Any work performed after the date hereof and
otherwise deemed to be reasonably necessary by either party in order to
further segregate the Demised Premises from the rest of the Plant, to
segregate certain parking lots for Tenant's use from the parking lots for the
Plant, and to secure and provide for the independent use and operation of the
same, including
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without limitation, installing or causing to be installed, if possible,
separate metering devices for utilities serving the Demised Premises and the
Plant, shall, in the absence of a mutually written agreement to the contrary,
be borne by the party desiring to have the work performed.
Section 3.7 Tenant and Landlord agree to arrange for the
replacement of the sprinkler heads throughout the Plant as recommended in the
November 30, 1998, report prepared by Global Risk Consulting Corp. The cost
of performing the work shall be allocated between Tenant and Landlord based
on the location of the sprinkler heads actually replaced with Tenant being
responsible for replacements within the Demised Premises and Landlord being
responsible for replacements in areas of the Plant not included within the
Demised Premises.
Section 3.8 Except as otherwise set forth above, Landlord
shall not have any obligation hereunder to remove any machinery and equipment
owned by Landlord from areas of the Plant included within the Demised
Premises now or in the future except to the extent that such removal is
required by law or such machinery and equipment presents unreasonable health
and/or safety issues arising from or attributable to the materials contained
therein. Notwithstanding the foregoing, the parties agree that Landlord shall
have six months from the date hereof to dispose of surplus equipment owned by
Landlord currently located within the Demised Premises. Any such equipment
not removed during that period may be removed and disposed of by Tenant on an
"as is" where is basis at Tenant's sole costs and expense with Tenant
retaining any residual value realized on the sale or disposal. In the event
that Tenant and Landlord subsequently desire to include additional portions
of the Plant in the Demised Premises and notifies Landlord of its desire to
have additional equipment located within those areas removed, Landlord shall
have six months thereafter to dispose of such equipment and any such
equipment not removed during that period may be removed and disposed of by
Tenant on an "as is" where is basis at Tenant's sole costs and expense with
Tenant retaining any residual value realized on the sale or disposal.
ARTICLE 4
PAYMENT OF TAXES
Section 4.1 Subject to the provisions of Section 4.2 and
Article 24 below, Tenant shall pay (prior to the addition or imposition of
any fine, penalty, interest, cost or expense in respect of the nonpayment
thereof, if applicable), all real estate taxes, personal property taxes,
occupancy taxes, assessments, water and sewer rents and charges, vault
charges, license and permit fees and other governmental levies and charges,
of any kind or nature (collectively, "TAXES"), which are assessed, levied,
confirmed, imposed or which may become a lien upon all or any portion of the
Demised Premises, or shall become payable, during and with respect to the
Term; provided, that any Taxes relating to a fiscal period of the taxing or
imposing authority, a part of which period is included in a period of time
before the Commencement Date or after the Expiration Date, shall (whether or
not such Taxes shall be assessed, levied, confirmed, imposed or become a lien
upon the Demised Premises or the Personal Property, or shall become payable,
during the Term) be adjusted between the Landlord and the Tenant as of the
Commencement Date or as of the Expiration Date, as applicable. The Tenant,
on or before the date any installment of Taxes shall become delinquent, shall
furnish the Landlord with evidence of
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payment of such Taxes, in form reasonably satisfactory to the Landlord.
Tenant shall be responsible for any fine, penalty, interest, cost or expense
imposed upon the Demised Premises in respect of the nonpayment or late
payment of Taxes.
Section 4.2 In the event that any Taxes are billed pursuant
to a tax or other billing scheme that incorporates property owned by the
Landlord other than the Demised Premises and the Personal Property, then,
notwithstanding the other provisions of this Article 4, all such Taxes
respecting the Demised Premises and/or the Personal Property shall be paid by
the Landlord, and the Landlord shall thereafter bill the Tenant for the
Tenant's pro rata share of such Taxes as shall be reasonably determined by
the Landlord and the Tenant. In addition to the payment of Taxes
attributable to the Demised Premises and the Personal Property, the Tenant
shall pay a pro rata share of Taxes attributable to the Licensed Premises.
The determination of Tenant's pro rata share of Taxes shall be made by the
Landlord and the Tenant in accordance with Article 24 below and as set forth
on EXHIBIT "B" attached hereto. All amounts payable by the Tenant under this
Section 4.2 shall be treated as Additional Rent hereunder and shall be due
and payable thirty (30) days after delivery of such bill to the Tenant and
otherwise in accordance with the terms of this Lease.
Section 4.3 Nothing in this Lease shall require the Tenant to
pay any franchise, corporate, estate, inheritance, succession, capital levy,
income, profits, revenue or transfer tax imposed upon the Landlord, nor shall
any tax, assessment, charge or levy of the character above in this Section
4.3 be deemed to constitute Taxes, except if such taxes are customarily
payable by the Tenant in substitution of any item of Taxes.
ARTICLE 5
INSURANCE
Section 5.1 At all times during the term of this Lease the
Tenant shall maintain workers' compensation insurance in the amount required
by applicable law and employer's liability insurance to a limit of not less
than $1,000,000; and keep the Demised Premises and the Personal Property
insured against:
(1) loss or damage by fire, and such other risks as may be
included in the standard form of extended coverage insurance policy in an
amount not less than 100% of the replacement value of the Demised Premises
and the Personal Property (as reasonably determined by Landlord and
communicated to Tenant on an annual basis or as otherwise necessary to
reflect changes in the Demised Premises and/or Personal Property), with
reasonable deductibles not exceeding $100,000; and further provided that the
amount of such insurance is at all times sufficiently large and the amount of
such deductibles are sufficiently small, to prevent the Landlord from
becoming a co-insurer within the terms of the applicable policies;
(2) loss or damage by explosion of high pressure steam
boilers, air conditioning equipment, pressure vessels, motors or similar
apparatus, now or hereafter installed in the Demised Premises, in an amount
of not less than 100% of the replacement value of the Demised
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Premises and the Personal Property (as reasonably determined by Landlord and
communicated to Tenant on an annual basis or as otherwise necessary to
reflect changes in the Demised Premises and/or Personal Property); and
(3) such other insurance and increased policy limits with
respect to the Demised Premises or the Personal Property as may be reasonably
required from time to time by the Landlord.
Section 5.2 The Tenant shall also maintain a policy of
Commercial General Liability Insurance naming the Tenant as insured and the
Landlord as additional insured against claims by third parties arising from
the Tenant's use and occupancy of the Premises and the Personal Property.
Such insurance shall provide amounts of insurance of not less than $5,000,000
per occurrence for bodily injury including death and for property damage.
Section 5.3 All insurance provided to be maintained under
this Lease shall be effected under valid enforceable policies issued by
insurers of recognized responsibility, having a Best's rating of not less
than A/VIII. Upon the execution of this Lease, certificates thereof shall be
delivered to the Landlord and, if requested by the Landlord, certificates of
such insurance shall be delivered to the holder of any Fee Mortgage (as
hereinafter defined). Not later than fifteen (15) days after the expiration
date of any policy, the original renewal policy for such insurance or
certificate thereof shall be delivered to the Landlord. All such policies
shall contain agreements by the insurers that such policies shall not be
canceled except upon at least 30 days' prior written notice to each named
insured, additional insured and loss payee and the coverage afforded thereby
shall not be affected by the performance of any work by the Tenant, or its
agents or contractors on its behalf in or about the Premises. All insurance
shall provide that Tenant's insurance is primary and that any other insurance
which Landlord may have shall be excess of and not contributory.
Section 5.4 All policies of insurance required under Section
5.1 above shall name the Landlord as an additional insured and the holder of
any Fee Mortgage as loss payee with respect to the Demised Premises and the
Improvements (hereinafter defined), as their respective interests may appear,
pursuant to a standard mortgagee clause or endorsement. For purposes of this
Lease, the term "IMPROVEMENTS" shall mean alterations, installations,
improvements, additions or other physical changes in or about the Demised
Premises.
Section 5.5 Tenant shall procure an appropriate clause in, or
endorsement on, any fire or extended coverage insurance covering the Demised
Premises, Personal Property and fixtures and equipment located thereon or
therein, pursuant to which the insurance companies waive subrogation or
consent to a waiver of right of recovery and having obtained such clauses or
endorsements of waiver of subrogation or consent to a waiver of right of
recovery, will not make any claim against or seek to recover from the other
for any loss or damage to its property or the property or others resulting
from fire or other hazards covered by such fire and extended coverage
insurance, provided, however, that release, discharge, exoneration and
covenant not to sue herein contained shall be limited by and be in
coexistence with the terms and provisions of the waiver of subrogation clause
or endorsements or clauses or endorsements consenting to a
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waiver of right to recovery. If the payment of an additional premium is
required for the inclusion of such waiver of subrogation provision, Tenant
shall advise Landlord of the amount of any such additional premiums and
Landlord at its own election may, but shall not be obligated to, pay the
same. If Landlord shall not elect to pay such additional premium, Tenant
shall not be required to obtain such waiver of subrogation provision. If
Tenant shall be unable to obtain the inclusion of such clause even with the
payment of an additional premium, then Tenant shall attempt to name Landlord
as an additional insured (but not a loss payee) under the policy. If the
payment of an additional premium is required for naming Landlord as an
additional insured (but not a loss payee), Tenant shall advise Landlord of
the amount of any such additional premium and Landlord at its own election
may, but shall not be obligated to, pay the same. If Landlord shall not
elect to pay such additional premium or if it shall not be possible to have
Landlord named as an additional insured (but not loss payee), even with the
payment of an aditional premium, then (in either event) Tenant shall so
notify Landlord and Tenant shall not have the obligation to name Landlord as
an additional insured. Tenant acknowledges that Landlord shall not carry
insurance on and shall not be responsible for damage to any alterations
performed by Tenant or Tenant's personal property, and that Landlord shall
not carry insurance against, or be responsible for any loss suffered by
Tenant due to, interruption of Tenant's business.
ARTICLE 6
UTILITIES AND OTHER PROPERTY-RELATED SERVICES
Section 6.1 The Tenant shall, prior to delinquency, pay or
cause to be paid all charges for heat, cooling, air, steam, water, sewer,
gas, electricity, light, telephone, or any other utility service rendered or
supplied to the Demised Premises throughout the Term (if and to the extent
the same are billed directly to the Tenant), and shall indemnify the Landlord
and hold the Landlord harmless against any liability or damages on such
account.
Section 6.2 In the event any utilities or other services
payable pursuant to this Article 6 are billed pursuant to a billing scheme
that incorporates property other than the Demised Premises, then,
notwithstanding the other provisions of this Article 6, such utilities or
other property-related services respecting the Demised Premises shall be paid
by Tenant, and the Tenant shall thereafter bill the Landlord for the
Landlord's proportionate share of such utilities or other property-related
services, as reasonably determined by the parties taking into account the
total area occupied and their respective requirements based on usage. In
addition to the payment of utilities and services attributable to the Demised
Premises, the Tenant shall pay a pro rata share of utilities and services
attributable to the Licensed Premises. The determination of Tenant's
proportionate share of utilities and services shall be made by the Landlord
and the Tenant in accordance with Article 24 below and EXHIBIT "B" attached
hereto taking into account the total area occupied and their respective
requirements based on usage. Any amounts payable by the Tenant under this
Section 6.2 shall be treated as Additional Rent hereunder and shall be due
and payable on the thirtieth (30th) day following delivery of any such bill
to the Tenant.
Section 6.3 The Landlord and the Tenant shall cooperate with
each other to the extent reasonably necessary to enable the Tenant to obtain
utility and other services at the
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Demised Premises, which may include sharing such utilities and services;
provided, however, that the Landlord shall not be required to furnish any
services or facilities to the Demised Premises, nor shall the Landlord be
responsible for any interruption of services to the Demised Premises unless
caused by the gross negligence or wilful misconduct of the Landlord or its
agents, servants or employees.
ARTICLE 7
CHANGES AND ALTERATIONS - SURRENDER OF
DEMISED PREMISES AND PERSONAL PROPERTY
Section 7.1 The Tenant shall not make any alterations,
decorations, installations, additions, improvements, repairs, replacements or
removals (collectively, "ALTERATIONS") to the Demised Premises, to any of the
Improvements or any part thereof or any equipment or appurtenance thereto,
unless the Tenant shall comply with the following requirements:
(a) Any Alteration shall be made promptly in a first
class, workerlike manner, in compliance with all applicable legal
requirements ("REQUIREMENTS");
(b) No Alteration shall be made which would substantially
change the general character or use of the Demised Premises, any of the
Improvements or any part thereof or any equipment or appurtenance
thereto;
(c) Such Alteration shall be effected under the
supervision of the registered or licensed architect reasonably
satisfactory to the Landlord (the "ARCHITECT");
(d) Prior to the commencement of any proposed structural
Alteration, the Tenant shall furnish the Landlord complete plans and
specifications for the proposed Alteration prepared by the Architect,
which plans and specifications shall meet with the approval of the
Landlord, which, except with respect to Alterations to the roof, the
foundations or the exterior walls of any of the buildings comprising the
Demised Premises, shall not be unreasonably withheld, together with the
approval thereof by any governmental board, bureau or department then
exercising jurisdiction, which plans and specifications shall be and
become the property of the Landlord in the event that for any reason this
Lease shall be terminated or shall expire;
(e) If, as a result of any Alterations performed by or on
behalf of Tenant, any alterations, installations, improvements additions
or other physical changes are required to be performed or made to any
portion of the Plant other than the Demised Premises in order to comply
with any Requirement(s), Landlord, at Tenant's sole cost and expense, may
perform or make such alterations, installations, improvements, additions
or other physical changes and take such actions as Landlord shall deem
reasonably necessary;
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(f) If, as a result of any Alteration by or on behalf of
the Tenant, any asbestos containing material ("ACM") is required to be
removed and disposed of, Tenant shall pay for all such removal and
disposal costs, including air monitoring and health and safety costs
associated with such removal, and shall remove and dispose of, or cause
to be removed and disposed of, such ACM in accordance with all applicable
Environmental Laws;
(g) The Demised Premises and the Personal Property shall
at all time be free of liens for labor and materials supplied or claimed
to have been supplied in connection with any Alteration and, if any
mechanic's lien is filed against the Premises, the Plant or the Land
(hereinafter defined) for work claimed to have been done for, or
materials claimed to have been furnished to, Tenant, such lien shall be
discharged by Tenant within thirty (30) days after Tenant shall have
received notice thereof, at Tenant's expense, by payment or filing the
bond required by law or otherwise;
(h) The Tenant shall prosecute and complete, or cause to
be prosecuted and completed, any Alteration in compliance with the
approved plans and specifications and with all applicable laws and
regulations and all insurance policies and all orders and requirements of
any insurance underwriting or other similar body covering or applicable
to the Demised Premises. No Alteration shall be undertaken until the
Tenant shall have procured and paid for, so far as they may be required,
from time to time, all municipal and other governmental permits and
authorizations of the various municipal departments and governmental
subdivisions having jurisdiction over the Demised Premises or the
business or activities conducted thereon, and the Landlord agrees, at the
sole cost and expense of the Tenant, to join in the application for such
permits or authorizations whenever such action is necessary (so long as
such joining does not impose any personal liability upon the Landlord in
respect of any such Alteration). No plans and/or specifications required
to be filed by the Tenant with any governmental authority shall be filed
or submitted unless such plans and/or specifications are based upon and
consistent with the plans and specifications approved by the Landlord.
The Landlord's approval of any plans and specifications may be withdrawn
if the Tenant fails to obtain any required governmental approval or if
the Tenant otherwise fails to fulfill any obligation contained in this
Article 7;
(i) At all times when an Alteration is in process, the
Tenant, at the Tenant's sole cost and expense, shall obtain and keep in
full force and effect, or cause to be obtained and kept in full force and
effect: (1) workers' compensation insurance covering all persons employed
in connection with such Alteration and with respect to death or personal
injury or bodily injury claims which could be asserted against the
Landlord, the Tenant or the Demised Premises; (2) general liability and
property damage insurance (which insurance may be effected by
endorsement, if obtainable, on the insurance required to be carried
pursuant to this Lease and shall contain a completed operations
endorsement); and (3) builder's risk insurance, completed value form,
covering all physical loss, in an amount reasonably satisfactory to the
Landlord. The Landlord and the holder of any Fee Mortgage or other party
which the Landlord may
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designate shall be named in all such insurance. The Tenant shall deliver
to the Landlord policies or certificates evidencing such insurance, and
evidence of the payment of the premiums therefor, prior to the
commencement of any Alteration. Such insurance shall be in addition
to the insurance provided for in Article 5 and shall otherwise be subject
to the provisions of Article 5;
(j) Promptly following the completion of any structural
Alteration, the Tenant shall deliver to the Landlord two complete sets of
"as-built" plans and specifications therefor, certified to by the
Architect as being accurate and complete; and
(k) Upon completion of any Alteration, the Tenant shall
obtain and deliver to the Landlord originals of all certificates of
occupancy (or equivalents), if any, or amendments thereof and of all
certificates from governmental authorities, the Board of Fire
Underwriters and such other certificates as are required or customarily
obtained from any bureau or department having jurisdiction.
Section 7.2 On the Expiration Date, the Tenant shall
surrender and deliver, broom clean, to the possession and use of the
Landlord, in substantially similar order, condition and repair as upon the
Commencement Date with respect to the Original Demised Premises and the
Original Personal Property, and with respect to the Designated Original
Licensed Premises, the Additional Premises and the New Personal Property as
upon the date Tenant first occupied or began use of the same, in each
instance reasonable wear and tear and casualty for which the Tenant is not
responsible for hereunder excepted, and free and clear of all tenancies and
occupancies and free and clear of all liens and encumbrances hereafter
affecting the Demised Premises or the Personal Property. All equipment,
furniture and furnishings installed in, or placed upon, the Demised Premises
by, or on behalf of, Tenant which Tenant, at Tenant's option, did not remove
on or prior to the Expiration Date shall become the property of the Landlord.
Tenant may not remove any fixtures or Alterations without the prior written
consent of the Landlord, except to replace them with items of greater or
equal value. Tenant shall restore and repair, in a good and workerlike
manner, to good condition any damage to the Premises or the Plant caused by
such removal.
Section 7.3 The provisions of this Article 7 shall survive
the expiration or earlier termination of this Lease.
ARTICLE 8
REPAIRS AND MAINTENANCE
Section 8.1 The Tenant, at its sole cost and expense, shall
take good care of and maintain the Premises and the Personal Property,
including following the maintenance schedules and procedures identified on
Schedule 8.1 hereto and Schedule 6.3(a) to the Contribution Agreement and
such other maintenance schedules and procedures as shall be mutually agreed
upon by the parties hereto, and shall keep the Premises and the Personal
Property in good order, condition and repair throughout the Term and shall,
in a good and
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workerlike manner, make all repairs therein and thereon, interior and
exterior, structural and non-structural, necessary to keep the same in good
order and condition, whether or not necessitated by obsolescence or wear and
tear.
Section 8.2 The Tenant shall also be responsible for making
all structural repairs and replacements relating to the roof, the foundations
or the exterior walls of any of the buildings comprising the Demised
Premises; provided, however that Landlord shall be responsible for making all
structural repairs and replacements relating to the roof, the foundations or
the exterior walls of any of the buildings comprising the Original Demised
Premises and Designated Original Licensed Premises other than (a) those
structural repairs made in connection with routine and ordinary maintenance
of the Original Demised Premises and Designated Original Licensed Premises,
and (b) those repairs made in connection with damage or injury caused by or
resulting from Tenant's Alterations, or from carelessness, omission, neglect
or improper conduct of Tenant, Tenant's agents, employees, invitees or
licensees. Notwithstanding the foregoing, Landlord shall not have any
obligation under the preceding sentence unless and until such time as the
reasonably incurred costs and expenses incurred by Tenant for such repairs as
would otherwise be Landlord's responsibility under the preceding sentence
exceed Seven Hundred Fifty Thousand Dollars ($750,000) (the "BASKET") and
Tenant has presented invoices and other documentation reasonably requested by
Landlord in connection with the same. Landlord shall not have any obligation
to reimburse Tenant for any costs and expenses included within the Basket.
Tenant shall give Landlord prompt notice of any defective condition and the
party responsible for such repair hereunder shall make all such repairs as
soon as practicable.
Section 8.3 The Tenant shall, at the Tenant's cost and
expense, cause to be kept clean and free from dirt, snow, ice, rubbish,
obstructions and encumbrances, the sidewalks, passageways, grounds, parking
areas, walks, alleys and curbs within the Plant and the Landlord shall pay to
Tenant, a pro rata share of the cost thereof taking into account the total
area occupied and their respective requirements based on usage, as reasonably
determined by the Landlord and the Tenant in accordance with Article 24
hereof and EXHIBIT "B" attached hereto.
Section 8.4 The Tenant shall be responsible for repairing and
maintaining the Personal Property in accordance with the Landlord's
specifications as provided to the Tenant from time to time.
Section 8.5 Tenant agrees to perform the work necessary in a
manner determined by Tenant, but in accordance with the terms of Article 7,
to address the conditions noted within the Premises in (i) the Engineering
Report of Roof and Wall System for Accuride/Kaiser Building #12 dated March
12, 1999, prepared by Simmons and Associates, Inc. and (ii) the Engineering
Report of Erie Facility Buildings for Accuride Corporation dated March 12,
1999, prepared by Simmons and Associates, Inc. Such work shall be performed
on a timely basis as reasonably determined by Tenant in accordance with the
terms of this Lease and, except as otherwise set forth herein, Tenant shall
bear all costs and expenses associated with such work. Reasonable costs and
expenses incurred by Tenant to make any structural repairs and replacements
to address conditions noted in such reports relating to the roof, the
foundations or
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the exterior walls of any of the buildings comprising the Original Demised
Premises and Designated Original Licensed Premises other than (a) those
structural repairs made in connection with routine and ordinary maintenance
of the Original Demised Premises and Designated Original Licensed Premises,
and (b) those repairs made in connection with damage or injury caused by or
resulting from Tenant's Alterations, or from carelessness, omission, neglect
or improper conduct of Tenant, Tenant's agents, employees, invitees or
licensees, shall, subject to the terms set forth above, be included within
the Basket.
Section 8.6 Notwithstanding any provision contained herein to
the contrary, Landlord shall not have any obligations to make any repairs to
any portion of the Plant not included within the Premises except those
repairs reasonably necessary to prevent unreasonable interference with
Tenant's operations.
ARTICLE 9
COMPLIANCE WITH ORDERS, ORDINANCES, ETC.
Section 9.1 Except as otherwise expressly set forth in
Section 6.3 of the Contribution Agreement, during the Term, the Tenant shall
comply, at its sole cost and expense, with all applicable laws and
regulations, and with all requirements of all insurance policies and insurers
under the policies required hereunder which may be applicable to the Demised
Premises or the Personal Property, irrespective of the nature of the work
required to be performed and irrespective of whether or not such work shall
be required on account of any particular manner of use relating to or
affecting the Demised Premises or the Personal Property.
Section 9.2 Notwithstanding the foregoing, except as
otherwise set forth in any other agreements between the parties, Landlord
hereby releases Tenant from any liability for compliance with all applicable
laws and regulations and with all Insurance Requirements existing on the
Commencement Date with respect to the Original Demised Premises and the
Original Personal Property and, with respect to the Additional Premises, the
Designated Original Licensed Premises and the New Personal Property, the date
upon which Tenant first occupied or assumed exclusive use of the same
("PRE-EXISTING LAWS"); provided, however, that Tenant shall comply with those
Pre-Existing Laws applicable to the making of any Alteration by Tenant or the
result of the making thereof. From and after the dates set forth above,
Tenant shall be liable for compliance with new or revised laws, regulations
and Insurance Requirements to the extent set forth above.
ARTICLE 10
MECHANIC'S LIENS
Section 10.1 The Tenant shall not suffer or permit any
mechanics' liens to be filed against the Demised Premises by reason of work,
labor, services or materials supplied or claimed to have been supplied to the
Tenant. If any such mechanics' lien shall at any time be filed against the
Demised Premises, the Tenant shall, within 30 days of the filing thereof,
cause
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such lien to be discharged of record by payment, deposit, bond, order of a
court of competent jurisdiction or otherwise.
ARTICLE 11
INSPECTION OF PREMISES BY THE LANDLORD
Section 11.1 The Landlord and its authorized representatives
shall have the right to enter the Demised Premises at all reasonable times,
on reasonable prior notice, for the purpose of (a) inspecting or surveying
the Demised Premises and the Personal Property, (b) making any necessary
repairs or repairs required or permitted hereby to the Demised Premises and
the Personal Property, (c) gaining access to, and entering, the Prohibited
Areas, (d) performing any other act permitted under this Lease, (e)
surveying, investigating and remediating any environmental conditions that
may exist, and (f) arranging for the sale or removal of surplus equipment.
Notwithstanding the foregoing, Landlord shall use its reasonable best efforts
to coordinate all required work with Tenant, and Landlord's activities shall
not unreasonably interfere with Tenant's business or operations.
ARTICLE 12
RIGHT TO PERFORM COVENANTS OF THE TENANT
Section 12.1 If the Tenant shall at any time fail to make any
payment or perform any other act on its part to be made or performed under
this Lease, or diligently proceed to perform any such act, the Landlord,
after not less than fifteen (15) days' notice to the Tenant (except in case
of emergency, in which event no notice need be given), may, but shall not be
obligated to, make such payment or perform such other act. All amounts so
paid by the Landlord in connection therewith shall constitute Additional Rent
hereunder and shall be payable to the Landlord on the first day of the next
succeeding month, together with interest thereon at the Interest Rate from
the date the Landlord incurred such amount until the date of payment by the
Tenant.
ARTICLE 13
DAMAGE OR DESTRUCTION
Section 13.1 If the Demised Premises or the Personal Property
or any part thereof are damaged or destroyed in whole or in part by any
casualty, the Tenant shall give the Landlord immediate notice thereof, and
the Tenant shall, at its own cost and expense, whether or not such damage or
destruction shall have been insured and whether or not insurance proceeds, if
any, shall be sufficient for such purpose, promptly repair, alter, restore,
replace and rebuild the Demised Premises or the Personal Property (each, a
"RESTORATION") at least to the extent of the value and as nearly as
practicable, to the character, quality, scope and size of the Demised
Premises or the Personal Property existing immediately prior to such
occurrence subject to and in accordance with the terms and provisions of
Section 7.1 hereof. Landlord shall in no event be
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called upon to do or perform any Restoration, nor to pay for any of the costs
or expenses thereof. Notwithstanding the provisions of the preceding
sentence, if the Demised Premises are damaged and destroyed to the extent
that they cannot reasonably be used for the conduct of the Business, and if
the reasonably estimated time to complete the Restoration exceeds 180 days,
the Tenant may terminate this Lease by notice to Landlord not later than
thirty (30) days after such damage or destruction, provided that such
termination shall only be effective if the Tenant pays or causes to be paid
to the Landlord an amount equal to the greater of: (a) the amount of
insurance proceeds received by the Tenant; or (b) the reasonably estimated
cost of restoring the Demised Premises at least to the extent of the value
and, as nearly as practicable, to the character, quality, scope and size the
Demised Premises or the Personal Property existing immediately prior to such
occurrence.
Section 13.2 Unless this Lease is canceled by the Tenant as
provided above, this Lease shall not be affected in any manner by reason of
total or partial damage or destruction of the Premises or any part thereof or
by reason of the untenantability of the Demised Premises or any part thereof,
for any reason, and the Tenant, notwithstanding any law or statute present or
future, waives any and all rights to quit or surrender the Demised Premises
or any part thereof. The Tenant's obligations hereunder shall continue as
though none of such events had occurred and without abatement, suspension,
diminution or reduction of any kind. The foregoing notwithstanding, if the
Demised Premises shall be damaged by fire or other casualty during any
Renewal Period, and if Tenant shall give prompt notice thereof to Landlord,
the Basic Rent and any Additional Rent shall be reduced in the proportion by
which the area of the part of the Premises which is not usable by Tenant, as
reasonably determined by Landlord, bears to the total area of the Premises
immediately prior to such casualty until such repairs which are required to
be performed by Tenant (excluding Long Lead Work (as defined below)) shall be
substantially completed. The Restoration shall be performed in a workerlike,
diligent manner and Tenant shall use its best efforts to complete the
Restoration as expeditiously as possible. If Tenant shall fail to perform
the Restoration in a diligent and expeditious manner, then the Basic Rent and
Additional Rent shall recommence on the date that the Restoration would have
been completed but for the Tenant's failure. For purposes of this Lease, the
term "LONG LEAD WORK" shall mean any item which is not a stock item and must
be specially manufactured, fabricated or installed or is of such an unusual,
delicate or fragile nature that there is a substantial risk that
(i) there will be a delay in its manufacture, fabrication,
delivery or installation, or
(ii) after delivery, such item will need to be reshipped or
redelivered or repaired
so that in Landlord's reasonable judgement the item in question cannot be
completed when the standard items are completed even though the item of Long
Lead Work in question is (1) ordered together with the other items required
and (2) installed or performed (after the manufacture or fabrication thereof)
in order and sequence that such Long Lead Work and other items are normally
installed or performed in accordance with good construction practice. In
addition, "Long Lead Work" shall include any standard item which in
accordance with good construction
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practice should be completed after the completion of any item of work in the
nature of the items described in the immediately preceding sentence.
ARTICLE 14
CONDEMNATION
Section 14.1 If the Demised Premises, or any part thereof,
shall be taken in condemnation proceedings, or by exercise of any right of
eminent domain or action of condemnation, or by deed in lieu of condemnation
(any such taking or conveyance, a "TAKING"), the Tenant shall be entitled to
just compensation from any condemnor in accordance with the Pennsylvania
Eminent Domain Code (the "CODE") for the value of the Tenant's leasehold
estate, with all fixtures and improvements, together with dislocation damages
and other benefits available to tenants from condemnors under Article VI.A of
the Code, including, without limitation, actual damages with reference to
personal property and moving expenses. The Landlord shall be entitled to
just compensation in accordance with the provisions of the Code to the value
of the leased fee, i.e., the present value of the rental stream, together
with the present value of the Landlord's remainder interest in the Demised
Premises. The Tenant and the holder of any fee mortgage in cooperation with
the Landlord shall have the right to participate in any condemnation or
eminent domain proceedings and be represented by counsel for the purpose of
protecting their respective interests.
Section 14.2 (a) If at any time during the Term (i) a
Taking of all or substantially all of the Demised Premises shall occur, or
(ii) a Taking of less than substantially all of the Demised Premises shall
occur which, nevertheless, in the Tenant's reasonable judgment, materially
impairs the value or utility to the Tenant of the Demised Premises or access
thereto, such Taking shall be deemed to have caused this Lease to terminate
on the date of the Taking. In such event, the Basic Rent and all Additional
Rent required to be paid by the Tenant shall be paid up to the date of the
Taking and the Tenant shall, in all other respects, keep, observe or perform
all of the terms, covenants, agreements, provisions, conditions and
limitations of this Lease on the Tenant's part to be kept, observed or
performed, to the date of the Taking.
(b) Notwithstanding anything to the contrary
contained herein, if by reason of the Taking the value or utility of the
Demised Premises is impaired only by reason of a loss of access or parking in
the vicinity of the Demised Premises, then the Landlord shall use reasonable
efforts to provide reasonable alternative means of access or parking, as
applicable, for the Demised Premises; provided, however, if there are no
reasonable alternative means of access or parking, as applicable, available,
then the provisions of Section 14.2(a) shall apply.
Section 14.3 If there is a partial Taking pursuant to which
this Lease is not terminated, Tenant shall proceed, with reasonable
diligence, to perform any necessary repairs, restorations, alterations or
replacements to the Demised Premises, to the extent there are proceeds of
such Taking available. The proceeds of such Taking shall be made available to
Tenant for the
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purpose of undertaking such work, and any of such proceeds remaining after
completion of such work shall be distributed in accordance with the
provisions of the Code.
ARTICLE 15
DEFAULTS AND REMEDIES; EVENTS OF TERMINATION
Section 15.1 The occurrence of any one or more of the
following events shall constitute an "Event of Default" under this Lease by
the Tenant:
(a) The "abandonment" of the Demised Premises by the
Tenant (for purposes of this Section 15.1(a), the term "abandonment"
shall mean that Tenant shall (i) have vacated the Demised Premises with
no intention to return; and (ii) not be maintaining the Premises in
accordance with good business practice).
(b) The failure by the Tenant to make any payment of Basic
Rent, Additional Rent or any other payment required to be made by the
Tenant under this Lease within ten (10) days after receiving written
notice from Landlord that any such amount is due and payable.
(c) The failure by the Tenant to observe or perform any of
the covenants, conditions or provisions of this Lease to be observed or
performed by the Tenant, other than described in Section 15.1(b) above,
where such failure shall continue for a period of thirty (30) days after
notice thereof by the Landlord to the Tenant; provided, that if the
nature of the Tenant's default is such that more than thirty (30) days
are reasonably required for its cure, then there shall not occur an Event
of Default hereunder if the Tenant commences such cure within such thirty
(30) day period and thereafter diligently prosecutes such cure to
completion.
(d)(i) The making by the Tenant of any general assignment
or general arrangement for the benefit of creditors; (ii) the filing by
or against the Tenant of a petition to have the Tenant adjudged a
bankrupt or a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against
the Tenant, such petition is stayed or dismissed within 60 days); (iii)
the appointment of a trustee or receiver to take possession of
substantially all of the Tenant's assets located at the Demised Premises
or of the Tenant's interest in this Lease, where possession is not
restored to the Tenant within sixty (60) days; or (iv) the attachment,
execution or other judicial seizure of substantially all of the Tenant's
assets located at the Demised Premises or of the Tenant's interest in
this Lease, where such seizure is not discharged within sixty (60) days.
Section 15.2 (a) In the event of any Event of Default, the
Landlord shall have the right, at the Landlord's option, to elect to
terminate the Tenant's right to possession of the Demised Premises and the
Personal Property and the Landlord may re-enter, take possession of
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the Demised Premises and Personal Property and remove any persons or property
by legal action.
(b) The foregoing remedies shall not be exclusive but
shall be in addition to all other remedies and rights provided under
applicable law, including without limitation, the right to all compensatory
and consequential damages suffered by the Landlord, and election to pursue
one remedy shall not preclude resort to another concurrent remedy.
(c) No action of the Landlord, other than express
written notice of termination pursuant to the provisions of this Lease, shall
terminate this Lease.
Section 15.3 The Tenant hereby waives the service of notice of
intention to re-enter the Demised Premises or to institute legal proceedings
with respect to such re-entry. The Tenant hereby further waives any and all
rights of redemption granted by or under any present or future applicable
laws in the event of the Tenant being evicted or dispossessed for any cause,
or in the event of the Landlord obtaining possession of the Demised Premises
and the Personal Property, by reason of the violation by the Tenant of any of
the covenants and conditions of this Lease or otherwise.
ARTICLE 16
CUMULATIVE REMEDIES - NO WAIVER
Section 16.1 Subject to the limitations contained in Section
27.1 below, the specific remedies to which the Landlord or the Tenant may
resort under the terms of this Lease are cumulative and are not intended to
be exclusive of any other remedies or means of redress to which they may be
lawfully entitled in case of any breach or threatened breach by either of
them of any provision of this Lease. The failure of either party hereunder
to insist in any one or more cases upon the strict performance of any of the
covenants of this Lease, or to exercise any option contained herein, shall
not be construed as a waiver or relinquishment for the future of such
covenant or option. The receipt by the Landlord of Basic Rent or Additional
Rent with knowledge of the breach of any covenant of this Lease shall not be
deemed a waiver of such breach and no provision of this Lease shall be deemed
to have been waived by the Landlord unless such waiver is in writing and
executed by the Landlord. No act or thing done by the Landlord or the
Landlord's agents during the Term shall be deemed an acceptance of a
surrender of the Demised Premises and no agreement to accept such surrender
shall be valid unless in writing executed by the Landlord. In addition to the
other remedies in this Lease, the Landlord and the Tenant shall be entitled
to restraint by injunction of the violation, or attempted or threatened
violation, of any of the covenants, conditions or provisions of this Lease or
to a decree compelling performance of any of such covenants, conditions or
provisions.
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ARTICLE 17
SUBORDINATION; FEE MORTGAGES
Section 17.1 Provided that the holder of any mortgages or
deeds of trust (each, a "FEE MORTGAGE") covering the Landlord's fee interest
in the Demised Premises, the Licensed Premises or any portion thereof shall
execute and deliver to Tenant a non-disturbance and attornment agreement in
form and substance reasonably satisfactory to the Tenant, this Lease shall be
subject and subordinate at all times to the lien of such Fee Mortgage (other
than the mortgage set forth in Item 2 of Schedule 3.4(b) to the Contribution
Agreement which shall be subordinate to the Lease pursuant to a subordination
agreement to be entered into by Landlord and the mortgagor). The Tenant will
execute and deliver such further instrument or instruments subordinating this
Lease to the lien of any such Fee Mortgage as shall be desired by the holder
thereof. Tenant shall not do anything that would constitute a default under
any Fee Mortgage of which Tenant has prior notice, or omit to do anything
that Tenant is obligated to do under the terms of this Lease so as to cause
Landlord to be in default thereunder. If, in connection with a financing
secured in part by the land on which the Plant stands (the "LAND"), the
Plant, or any buildings of the Plant, any lending institution shall request
reasonable modifications of this Lease, Tenant shall not unreasonably
withhold or delay its consent to such modifications.
Section 17.2 On or prior to the Commencement Date and the date
hereof, as applicable, Landlord shall obtain all necessary consents to the
Lease.
ARTICLE 18
QUIET ENJOYMENT
Section 18.1 So long as the Tenant shall not be in default of
its obligations under this Lease beyond any applicable grace periods, the
Tenant shall and may peaceably and quietly hold, occupy and enjoy the Demised
Premises, and, on a non-exclusive basis, the Licensed Premises, during the
Term, subject to the terms, conditions and provisions of this Lease.
ARTICLE 19
NOTICES
Section 19.1 All notices, demands and requests which may or
are required to be given by either party to the other shall be in writing.
All notices, demands and requests by the Landlord to the Tenant shall be
deemed to have been properly given if served in person by service by a
national overnight courier such as Federal Express, or if sent by United
States registered or certified mail, return receipt requested, postage
prepaid, addressed to the Tenant at its address set forth above, Attention:
Richard Giromini, with a copy to Accuride Corporation, 2315 Adams Lane,
Henderson, Kentucky 42420, Attention: General Counsel, or at such other place
as the Tenant may from time to time designate in a written notice to the
Landlord. A copy
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of each such notice, demand or request shall be sent to Kaiser Aluminum &
Chemical Corporation, 26913 Northwestern Highway, Suite 520, Southfield,
Michigan 48034. All notices, demands and requests by the Tenant to the
Landlord shall be deemed to have been properly given if served in person by
service by a national overnight courier such as Federal Express, or sent by
United States registered or certified mail, return receipt requested, postage
prepaid, addressed to the Landlord at the address first above written,
Attention: President, Engineered Components, or at such other place as the
Landlord may from time to time designate in a written notice to the Tenant.
A copy of each such notice, demand or request shall be sent to Kaiser
Aluminum & Chemical Corporation, 5847 San Felipe, Suite 2600, Houston, Texas
77057, Attention: General Counsel.
ARTICLE 20
CERTIFICATES
Section 20.1 Each party hereto shall, at any time and from
time to time upon not less than 10 days' prior notice by the other party,
execute, acknowledge and deliver to such other party a statement in writing
certifying, if true, that this Lease is unmodified and in full force and
effect (or if there have been modifications that the Lease is in full force
and effect as modified and stating the modifications) and the dates to which
the Basic Rent and other charges have been paid in advance, and stating
whether or not, to the best knowledge of the signer of such statement, the
other party is in default in keeping, observing or performing any term,
covenant, agreement, provision, condition or limitation contained in this
Lease and, if so, specifying each such default.
ARTICLE 21
USE
Section 21.1 The Tenant shall use the Premises and the
Personal Property solely for the production of Joint Venture Products (as
defined in the Contribution Agreement) in connection with the conduct of the
Business and for no other purpose. The provisions of this Section 21.1 shall
not prohibit any new uses which become part of the Business, provided that
the same: (a) are of the same nature as the current uses of the Demised
Premises and the Personal Property; (b) are permitted under the certificate
of occupancy (or the certificate of occupancy is amended to permit such use);
and (c) are approved by the Landlord, such approval not to be unreasonably
withheld or delayed. Tenant shall not use, treat, or dispose of any
Hazardous Substances (as defined in the Contribution Agreement) in connection
with the use of the Premises for the production of Joint Venture Products
without first obtaining the prior consent of the Landlord, which consent
shall not be unreasonably withheld or delayed.
Section 21.2 Pursuant to the Contribution Agreement, the
Landlord may have transferred to, or made available for use by, the Tenant,
certain Governmental Authorizations (as defined in the Contribution
Agreement) required for the use and occupancy of, and conduct of the Business
at, the Demised Premises. The Tenant shall obtain (to the extent not
transferred or
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made available to the Tenant as provided above) and thereafter shall maintain
in full force and effect, any permit, approval or license which is required
by any governmental or nongovernmental agency or insurance regulatory body
for the operation and maintenance of the Demised Premises and the use thereof
in connection with the Business (including, without limitation, the
Governmental Authorizations transferred to or made available to the Tenant
pursuant to the Contribution Agreement), and shall promptly furnish the
Landlord with a copy of same. The Tenant shall not use or allow the Premises
or any part thereof to be used or occupied for any unlawful purpose.
Section 21.3 In furtherance and not in limitation of the
foregoing, the Tenant's use of the Premises and the Personal Property shall
at all times be subject to the Landlord's reasonable health, safety and
operating regulations and guidelines from time to time which are applicable
to the Premises, the Personal Property and/or the Tenant's use thereof, to
the extent the same have been furnished to the Tenant by the Landlord.
ARTICLE 22
TRANSFER; ASSIGNMENT AND SUBLETTING
Section 22.1 The Tenant shall not assign, sublet, transfer,
sell or otherwise convey the whole or any part of its interest in this Lease.
Notwithstanding the foregoing, Tenant may, subject to the limitations set
forth in Section 21.1 hereof, assign or sublet the whole or any part of its
interest in this Lease to any Affiliate of Tenant for such Affiliate's use in
connection with the Business provided that such Affiliate expressly assumes
the liabilities of the Tenant hereunder. Notwithstanding such assignment and
assumption, the Tenant shall not be released from liability hereunder without
the consent of the Landlord, which consent shall not be unreasonably withheld
if the assignee has a net worth on the date of the assignment which is
reasonably adequate for the performance by the Tenant of its obligations
hereunder. Tenant shall notify Landlord of any such proposed assignment or
sublease at least three (3) months prior to the effective date of such
assignment or sublease.
Section 22.2. Subject to the rights of the Tenant set forth in
the following Section 22.3, the Landlord may assign or transfer its interest
in the Lease or the Premises or Personal Property at any time during the Term
hereof, provided that any transferee expressly assumes the liabilities of the
Landlord hereunder. Notwithstanding such assignment and assumption, the
Landlord shall not be released from liability hereunder without the consent
of the Tenant, which consent shall not be unreasonably withheld if the
assignee or transferee has a net worth on the date of the assignment which is
reasonably adequate for the performance by the Landlord of its obligations
hereunder. Landlord shall notify Tenant of any such proposed assignment or
transfer at least three (3) months prior to the effective date of such
assignment or transfer. The foregoing provisions of this Section 22.2 shall
not apply to the creation of any security interest, mortgage or lien by
Landlord on its interest in the Lease of the Premises or Personal Property in
connection with its existing primary credit facility or any replacement or
extension thereof.
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Section 22.3 If at any time Landlord desires to transfer all
of its right, title and interest in and to the Premises and Personal Property
to any person who is not an Affiliate of Landlord, Landlord shall deliver to
Tenant a written notice (the "OFFER NOTICE") specifying all of the material
terms of the proposed sale (the "OFFER"), including the consideration for
which Landlord proposes to sell the Premises and Personal Property and any
copies of any agreement or documents to be executed or delivered in
connection with the proposed sale. Thereafter, the Tenant shall have the
exclusive right for a period of sixty (60) days after receipt of the Offer
Notice to purchase all, but not less than all, of the Premises and Personal
Property upon the terms and conditions contained in the Offer Notice.
Section 22.4 For purposes of this Lease, "AFFILIATE" means,
with respect to any person, any other person directly or indirectly
controlling, controlled by or under common control with, such person.
Control of any person shall consist of the power to direct the management and
policies of such person whether through the ownership of voting securities or
by contract or otherwise and shall be deemed to exist upon the ownership of
securities entitling the holder thereof to exercise more than 50% of the
voting power in the election of directors (or other similar positions) of
such person.
ARTICLE 23
INVALIDITY OF PARTICULAR PROVISIONS
Section 23.1 If any term or provision of this Lease or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Lease shall be valid and be enforced to the
fullest extent permitted by law.
ARTICLE 24
ALLOCATION OF EXPENSES
Section 24.1 The Tenant and the Landlord agree that (i) all
costs and expenses solely attributable to the Demised Premises, the Personal
Property and the use thereof are to be borne by the Tenant (other than the
costs of certain structural repairs to be borne by the Landlord as provided
in Article 8 hereof), (ii) all costs and expenses solely attributable to the
portion of the Plant used and occupied exclusively by the Landlord or any
party other than the Tenant (collectively, "LANDLORD'S PREMISES") are to be
borne by the Landlord, and (iii) all costs and expenses relating to the
Licensed Premises are to be equitably apportioned between the Tenant and the
Landlord.
Section 24.2 The Landlord and the Tenant shall cooperate with
each other to arrange for Taxes, utilities and services exclusively relating
to or serving the Demised Premises to be separately assessed, metered or
contracted for, to the extent reasonably practicable and unless the Landlord
and the Tenant otherwise mutually agree (E.G. for the purpose of achieving
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cost savings). The cost and expense of any Separation Work performed in
connection therewith shall be borne by the Tenant, as provided in Article 3
above.
Section 24.3 The Landlord and the Tenant agree that the
apportionment of costs or expenses (including Taxes, utilities and services)
relating partially to Landlord's Premises or a portion thereof, and partially
to the Demised Premises or a portion thereof, shall generally be made in
accordance with the ratio of the interior square footage of buildings lying
within the Demised Premises (or such portion thereof) to the square footage
of buildings lying within the Landlord's Premises (or portion thereof) taking
in account the total area occupied and their respective requirements based on
usage unless otherwise provided in Exhibit B. Similarly, apportionment of
Licensed Premises expenses shall generally be made in accordance with the
ratio of the interior square footage of all buildings lying within the entire
Demised Premises to the interior square footage of all buildings lying within
the entire Landlord's Premises taking in account the total area occupied and
their respective requirements based on usage unless otherwise provided in
Exhibit B. Notwithstanding the foregoing, if the method of apportionment
described in the preceding two sentences would be inequitable in any material
respect (E.G., because the benefit from the service in question, the use of
the utilities in question, or the value of the properties in question is
disproportionate), then a more equitable basis of allocation shall be used.
Section 24.4 Attached hereto as EXHIBIT "B" is a schedule of
Initial Expense Allocations pursuant to which the Landlord and the Tenant
have attempted to identify, and equitably apportion between the Landlord and
the Tenant, certain costs and expenses relating to the Demised Premises
and/or the Licensed Areas. Landlord and Tenant agree to review such
apportionment annually.
Section 24.5 If any item of cost or expense paid, payable or
incurred by either the Landlord or the Tenant is to be apportioned pursuant
to this Lease, the party to whom such cost or expense is billed or by whom it
is paid shall promptly notify the other party of the amount of such cost or
expense, and such other party's proportionate share thereof and the basis
upon which such proportionate share was determined. Such notice shall be
accompanied by reasonable documentation relating to such cost or expense.
The party so billed shall pay the billing party the amount requested within
fifteen (15) business days of receiving such bill. If the party billed
disputes the amount, such payment may be made under protest and the dispute
shall be settled in the manner provided in Section 24.6 below. Following
resolution of the dispute, any overpayment shall be refunded to the billed
party, and any underpayment shall be paid to the billing party, in each case
together with interest thereon at a rate equal to 2% above the rate of
interest publicly announced by Citibank, N.A. from time to time as its "base
rate" (unless such interest is waived by the party entitled to receive the
same).
Section 24.6 In the event any party disputes the amount of any
bill submitted to it for payment pursuant to Section 24.5 above, it shall
immediately notify the other party in writing, which notice shall set forth
the nature of the dispute with reasonable specificity and shall include any
documentation reasonably required to evaluate such dispute. Each party shall
appoint a representative who shall attempt to resolve the dispute. The
representatives shall use
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the provisions of this paragraph and, if applicable, the methodology employed
by the parties in arriving at the Initial Expense Allocations set forth in
EXHIBIT "B" as guidelines in attempting to resolve the dispute. If such
representatives are unable to resolve the dispute within thirty (30) days,
they shall submit the dispute to arbitration in accordance with Article 28
hereof.
ARTICLE 25
BROKER
Section 25.1 Each party represents that it has not dealt with
any broker in connection with this Lease. The Landlord and the Tenant shall
indemnify and hold each other harmless from and against any and all loss,
claims, liabilities, damages and expenses, including without limitation,
attorneys' fees and expenses and court costs arising out of or in connection
with any breach or alleged breach of the above representation or any claim by
any person or entity for brokerage commissions or other compensation in
connection with this Lease. The provisions of this Article 25 shall survive
the expiration or sooner termination of this Lease.
ARTICLE 26
INDEMNITY
Section 26.1 Except as otherwise provided herein or in the
Contribution Agreement, the Tenant shall indemnify and hold harmless the
Landlord against and from any and all liability, fines, suits, claims,
demands, expenses (including without limitation, reasonable attorneys' fees
and disbursements) and actions of any kind or nature arising by reason of
injury to person or property occurring on or about the Premises and
occasioned in whole or in part by any act or omission of the Tenant, or of
any person on the Premises or any other part of the Plant by the license or
permission of the Tenant, expressed or implied, or by any use of the Premises
or the Personal Property, or any breach, violation or non-performance of any
covenant in this Lease on the part of the Tenant to be observed or performed;
provided, however, that with respect to the Original Demised Premises, the
Designated Original Licensed Premises, the Licensed Premises and the Original
Personal Property, the provisions of this Section 26.1 shall be in effect as
of the Commencement Date and with respect to the Additional Premises and the
New Personal Property, the provisions of this Section 26.1 shall be in effect
as of the date Tenant first occupied or used the same.
Section 26.2 Except as otherwise provided herein or in the
Contribution Agreement, Landlord shall indemnify and hold harmless the Tenant
from and against all claims against Tenant arising from any direct damage to
the Demised Premises and any bodily injury to Tenant's employees, agents or
invitees resulting from the negligence or wilful misconduct of Landlord or
its agents. This indemnity and hold harmless agreement shall include
indemnity from and against any and all liability, fines, suits, claims,
demands and expenses (including, without limitation, reasonable attorneys'
fees and disbursements) incurred in or in connection with any such claim or
proceeding brought thereon, but shall be limited to the extent any insurance
proceeds collectible by Tenant or such injured party with respect to such
damage or
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<PAGE>
injury are insufficient to satisfy same. Landlord shall have no liability
for any consequential damages suffered either by Tenant or by any party
claiming through Tenant.
Section 26.3 If any claim, action or proceeding is made or
brought against either party, which claim, action or proceeding the other
party shall be obligated to indemnify such first party against pursuant to
the terms of this Lease, then, upon demand by the indemnified party, the
indemnifying party, at its sole cost and expense, shall resist or defend such
claim, action or proceeding in the indemnified party's name, if necessary, by
such attorneys as the indemnified party shall approve, which approval shall
not be unreasonably withheld. Attorneys for the indemnifying party's insurer
are hereby deemed approved for purposes of this Section 26.3.
Notwithstanding the foregoing, an indemnified party may retain its own
attorneys to defend or assist in defending any claim, action or proceeding
involving potential liability of Five Million Dollars ($5,000,000) or more,
and the indemnifying party shall pay the reasonable fees and disbursements of
such attorneys. The provisions of this Article 26 shall survive the
expiration or earlier termination of this Lease.
ARTICLE 27
COVENANTS TO BIND AND BENEFIT
RESPECTIVE PARTIES; MODIFICATION;
WAIVER OF TRIAL BY JURY;
EXCULPATION; UNAVOIDABLE DELAY; CONFLICT
Section 27.1 The covenants and agreements herein contained
shall bind and inure to the benefit of the Landlord and the Tenant. The term
"Landlord" means a landlord or lessor, and as used in this Lease means only
the owner, or the mortgagee in possession, for the time being of the Demised
Premises, or the owner of this Lease of the Demised Premises, so that in the
event of any transfer of the Demised Premises or of this Lease, except as set
forth in Section 22.2, the Landlord shall be and hereby is entirely freed and
relieved of all covenants and obligations of the Landlord hereunder, and it
shall be deemed and construed without further agreement between the parties,
or between the parties and the purchaser, at the time of any such transfer,
that the purchaser of the Demised Premises of the Landlord's interest in this
Lease has assumed and agreed to carry out any and all covenants and
obligations of the Landlord hereunder.
Section 27.2 The terms and provisions of this Lease may not be
altered, modified, waived or terminated except by an agreement in writing
signed by the party to be charged.
Section 27.3 It is mutually agreed by and between the Landlord
and the Tenant that the respective parties hereto shall and they hereby do
waive trial by jury in any action, proceeding or counterclaim brought by
either of the parties hereto against the other on any matters whatsoever
arising out of or in any way connected with the Lease, the relationship of
the Landlord and the Tenant, the Tenant's use of or occupancy of the Premises
or the Personal Property, and any emergency or any other statutory remedy.
It is further mutually agreed that in the event the Landlord commences any
summary proceeding for possession of the Demised
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Premises and the Personal Property, the Tenant will not interpose any
counterclaim of whatever nature or description in such proceeding.
Section 27.4 Notwithstanding anything herein or in any rule,
law or statute to the contrary, the Tenant hereby acknowledges and agrees
that to the extent that the Landlord shall at any time have any liability
under, pursuant to or in connection with this Lease, none of the Tenant, its
officers, directors, partners, associates, employees, agents, guests,
licensees or invitees (or any other party claiming through or on behalf of
the Tenant) shall seek to enforce any personal or money judgment against the
Landlord except against the equity interest of the Landlord in the Plant. In
addition to and not in limitation of the foregoing, the Tenant further hereby
acknowledges and agrees that, in no event and under no circumstances, shall
the Landlord or any director indirect partner, officer, director, employee,
agent or principal (disclosed or undisclosed) of the Landlord have any
personal liability or monetary or other obligation of any kind under or
pursuant to this Lease, except that the Landlord may be held liable to the
extent of its equity interest in the Land and the Building. Any attempt by
the Tenant or any officer, director, direct or indirect partner, associate,
employee, agent, guest, licensee or invitee of the Tenant (or any other party
claiming through or on behalf of the Tenant) to seek to enforce any such
personal liability or monetary or other obligation shall be and be deemed to
be in material violation by the Tenant of the terms of the tenancy created
hereby and shall, in addition to and not limitation of the Landlord's other
rights, powers, privileges and remedies under the terms and provisions of
this Lease or otherwise afforded by applicable law in respect thereof,
immediately vest the Landlord with the unconditional right and option to
cancel this Lease on five (5) days' notice to the Tenant.
Section 27.5 This Lease and the obligation of Tenant to pay
Basic Rent and Additional Rent hereunder and perform all of the other
covenants and agreements hereunder on the part of Tenant to be performed
shall in no way be affected, impaired or excused because Landlord is unable
to fulfill any of its obligations under this Lease expressly or implied to be
performed by Landlord or because Landlord is unable to make, or is delayed in
making any repairs, additions, alterations, improvements or decorations or is
unable to supply or is delayed in supplying any equipment or fixtures, if
Landlord is prevented or delayed from so doing by reason of strikes or labor
troubles or by accident, or by any cause whatsoever beyond Landlord's
control, including, but not limited to, laws, governmental preemption in
connection with a national emergency or by reason of any Requirements of any
governmental authority, or by reason of the conditions of supply and demand
which have been or are affected by war or other emergency ("UNAVOIDABLE
DELAYS").
Section 27.6 In the event of any inconsistency between the
terms and provisions of this Lease and the terms and provisions of the
Contribution Agreement, the terms and provisions of the Contribution
Agreement shall control.
ARTICLE 28
ARBITRATION
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Section 28.1 In such cases where this Lease expressly provides
for the settlement of a dispute or question by arbitration, and only in such
cases, either Landlord or Tenant may demand arbitration. Upon such demand,
and except where other provisions of this Lease have special provisions
therefor, the dispute or question shall be determined by arbitration in
accordance with the provisions of Section 8.3 of the Contribution Agreement.
ARTICLE 29
HAZARDOUS SUBSTANCES; ENVIRONMENTAL LAWS
Section 29.1 COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as
specifically set forth or contemplated by Section 6.3(a), 6.3(b), 6.3(c) and
7.1(a)(ii) of the Contribution Agreement, Tenant represents, covenants and
agrees that in conducting its business operations and/or its occupancy at the
Premises, it shall (i) comply with all applicable Environmental Laws (as that
term is defined in the Contribution Agreement), (ii) it shall not in any
manner cause the emission, discharge, issuance, release or distribution of
any Hazardous Substances (as that term is defined in the Contribution
Agreement) in violation of any Environmental Law, and (iii) it shall comply
with the terms and conditions of any permit issued to Landlord which relates
in whole or in part to Tenant's use or occupancy of the Premises, including
but not limited to the wastewater discharge permit and stormwater permit;
provided, however, that with respect to the Additional Premises and the
related Licensed Premises, the provisions of this Section 29.1 shall be in
effect as of the date Tenant first occupied or used the same.
Section 29.2 COPIES OF SUBMISSIONS. Upon the prior reasonable
written request of Landlord, Tenant shall supply Landlord with copies of any
notices, reports, correspondence and submissions made by Tenant to the United
States Environmental Protection Agency ("EPA"), the Pennsylvania Department
of Environmental Protection, the Ohio Department of Environmental Protection,
the United States Occupational Safety and Health Administration or any other
local, state or federal authority which requires submissions by Tenant of any
information concerning environmental matters or Hazardous Substances pursuant
to any Environmental Law. Tenant's obligation under this paragraph shall not
apply to attorney-client privileged communications or the attorney work
product doctrine or to any confidential business information submitted to
local, state or federal authorities under confidentiality protection to which
Landlord would not otherwise be entitled under the Contribution Agreement.
Section 29.3 TENANT'S REMEDIATION. Except as contemplated by
Section 29.1 hereof or Section 7.1(a)(ii) of the Contribution Agreement, in
the event of any spill, discharge, or release of any Hazardous Substances at,
under or about, the Premises solely caused by Tenant or relating to the
operations of Tenant's business and/or Tenant's occupancy at the Premises
(hereinafter collectively referred to as a "HAZARDOUS DISCHARGE") or upon the
issuance of any complaint, order, citation or notice of violation with regard
to air emissions, water discharges, noise emissions or any other
environmental, health or safety matter caused by Tenant or relating to the
operations of Tenant's business and/or occupancy at the Premises (hereinafter
collectively referred to as an "ENVIRONMENTAL COMPLAINT"), Tenant shall, at
its sole cost and expense, promptly take all such necessary steps to initiate
and diligently complete all remedial action
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relating to the Hazardous Discharge or the issuance of such Environmental
Complaint in accordance with all applicable Environmental Laws to the
reasonable satisfaction of Landlord and the applicable governmental authority
including the payment of any and all costs and penalties assessed against the
Premises. Provided however, with respect to a Hazardous Discharge caused by
Landlord, Tenant shall have no obligation to conduct any such remedial
actions. Notwithstanding the foregoing, with respect to the Additional
Premises and the related Licensed Premises, the provisions of this Section
29.3 shall be in effect as of the date Tenant first occupied or used the same.
Section 29.4 COPIES OF NOTICES. In the event that Tenant
receives any notice, whether written or oral, concerning the occurrence of
any Hazardous Discharge required to be reported under any Environmental Law
or of any Environmental Complaint from any person, entity or governmental
agency, then Tenant shall give prompt oral notice to Landlord, and shall
within five (5) days thereafter, give written notice of same to Landlord,
which notice shall set forth specifically and in detail all relevant facts
and circumstances with respect thereto.
Section 29.5 TENANT'S FAILURE TO REMEDIATE UNDER SECTION 29.3,
LANDLORD'S RIGHT TO REMEDIATE. Upon the occurrence of a Hazardous Discharge
or Environmental Complaint, in the event Tenant fails to comply with Section
29.3, Landlord shall have the right, but not the obligation, after giving
Tenant at least five (5) days prior written notice (unless emergent
circumstances require less notice) and a reasonable opportunity to cure
(which cure shall not exceed fifteen (15) days, unless emergent circumstances
require less time) to enter onto the Premises and after advising Tenant, to
take any actions necessary or advisable to remove, clean up and minimize the
impact of, or otherwise deal with any Hazardous Discharge or any
Environmental Complaint pertaining to the Premises. In the event such cure
shall take more than fifteen (15) days to accomplish, Tenant shall have a
period of time equal to the earlier of the reasonable time necessary to
accomplish the cure or any requirement of any applicable governmental agency
or Environmental Law, provided Tenant commences the cure within the fifteen
(15) day period and thereafter diligently pursues same to completion. All
reasonable costs and expenses incurred by Landlord in the exercise of any
such rights shall be deemed to be Additional Rent hereunder and shall be
immediately payable by Tenant to Landlord upon demand.
Section 29.6 ENVIRONMENTAL INDEMNIFICATION. Except as
specifically set forth in Section 7.1(a)(ii) of the Contribution Agreement,
Tenant shall indemnify the Landlord, its affiliates, shareholders, directors,
officers and employees against, and hold them harmless from any and all
damage, claim, loss, liability and expense (including without limitation
reasonable expenses of investigation and reasonable attorney's fees and
expenses) incurred or suffered by Landlord, (i) arising out of or due to any
spill, discharge, or release of any Hazardous Substances on, from, under or
at the Premises resulting from events or conduct occurring after the
Commencement Date and solely caused by Tenant or relating to Tenant's
business operations and/or Tenant's occupancy at the Premises, (ii) due to
Tenant's failure to comply with its obligations under this Article, or (iii)
due to Tenant's breach of any representation, warranty covenant or other
agreement of the Tenant contained in this Article; provided, however, that
with
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respect to the Additional Premises and the related Licensed Premises, the
provisions of this Section 29.6 shall be in effect as of the date Tenant
first occupied or used the same.
ARTICLE 30
MISCELLANEOUS
Section 30.1 CONTRIBUTION AGREEMENT. Notwithstanding the foregoing,
the terms of the Contribution Agreement shall, and shall be deemed to,
continue, subject to the terms, conditions and limitations applicable thereto.
Section 30.2 ENTIRE AGREEMENT. This Lease, together with the
Purchase Agreement dated as of April 1, 1999, by and among Accuride Ventures,
Inc., Accuride Corporation and Landlord (the "Purchase Agreement") and the
Formation Agreements (as defined in the Purchase Agreement), embodies the
entire agreement and understanding between the parties relating to the
subject matter hereof and thereof, and supersedes any prior oral or written
agreements, commitments or terms.
Section 30.3 SECTION HEADINGS; COUNTERPARTS; ETC. The section
headings of this Lease are for convenience of reference only and are not to
be considered in construing this Lease. This Lease may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one and the same instrument.
Section 30.4 FURTHER ASSURANCES. Each party hereto shall execute and
deliver such additional documents and perform such acts as are reasonably
requested by the other party hereto in order to fully effect the intent of
this Lease.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Lease
as of the date first set forth above.
LANDLORD:
KAISER ALUMINUM & CHEMICAL CORPORATION
By:___________________________
Name: Jack A. Hockema
Title: Vice President
TENANT:
AKW L.P., by AKW GENERAL PARTNER L.L.C., its
General Partner
By:_________________________
Name:
Title:
33
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EXHIBIT "A-1"
Demised Premises and Licensed Premises
[to be prepared and attached]
<PAGE>
EXHIBIT "A-2"
Original Personal Property
The following three overhead cranes located in buildings to be leased to
the Company:
-- Whiting double box bean bridge crane, 20-ton capacity x 60' span,
cab operated
-- Case double box beam mill crane, 15-ton capacity x 65' span, cab
operated
-- Shawbox double box beam mill crane, 20-ton capacity x 65' span
<PAGE>
EXHIBIT "A-3"
New Personal Property
- - The personal property and equipment, including, but not limited to, the
personal property and equipment relating to the electrical substation,
used by Tenant and located within the Designated Original Licensed
Premises or the Additional Premises.
<PAGE>
EXHIBIT "B"
INITIAL EXPENSE ALLOCATION
EXPENSE METHOD OF ALLOCATING
- -------------------------- --------------------------------------------------
Security Guard Services Pro rata based upon total square footage included
within the Premises and the total square footage
included within the Plant
Snow Removal Services 100% Tenant
Lawn Care Services Pro rata based upon total square footage included
within the Premises and the total square footage
included within the Plant
Mail Delivery & Pick Up 100% Tenant
Floor Mats and Uniforms 100% Tenant
Trash/Garbage Services 100% Tenant
Heating, Ventilation, Air Pro rata based upon total square footage included
Conditioning within the Premises and the total square footage
included within the Plant, and taking into account
the total area occupied and their respective
requirements based on usage
Fire Extinguisher Based on upon location within the Plant
Services
Telephone, Fax, Paging, 100% Tenant
Voice Mail, and Mobiles
(including service
contracts)
Environmental Engineering Invoices to Tenant and Landlord separately based
and Consulting Services on work individually authorized
Electricity Pro rata based upon total square footage included
within the Premises and the total square footage
included within the Plant, and taking into account
the total area occupied and their respective
requirements based on usage
Natural Gas Pro rata based upon total square footage included
within the Premises and the total square footage
included within the Plant, and taking into account
the total area occupied and their respective
requirements based on usage
Water & Sewer 100% Tenant
Taxes Pro rata based upon total square footage included
within the Premises and the total square footage
included within the Plant
All Other Pro rata based upon total square footage included
within the Premises and the total square footage
included within the Plant, and taking into
account the total area occupied and their respective
requirements based on usage
<PAGE>
SCHEDULE 8.1
Personal Property Maintenance Schedules and Procedures
<PAGE>
Contact: Eva Schmitz
Phone: (502) 827-6874
Pager: 1-888-987-7350
FOR IMMEDIATE RELEASE
ACCURIDE CORPORATION COMPLETES ACQUISITION OF AKW L.P.
Henderson, KY -- April 1, 1999 -- Accuride Corporation announced today that
it has completed the acquisition of Kaiser Aluminum & Chemical Corporation's
50 percent share of AKW L.P. This acquisition gives Accuride 100 percent
control of AKW. Total consideration paid to Kaiser for the 50 percent
interest was approximately $70 million. AKW was formed in 1997 as 50-50 joint
venture between Kaiser and Accuride to design, manufacture, and sell heavy
duty aluminum wheels.
"We are very pleased to finalize this transaction. The acquisition of 100
percent of AKW allows us to strategically expand our aluminum wheel
manufacturing and supply capabilities and thereby better service our
customers' total wheel requirements," said Bill Greubel, Accuride's President
and CEO.
Kaiser Aluminum & Chemical Corporation, the operating subsidiary of Kaiser
Aluminum Corporation (NYSE:KLU), is a leading producer of alumina, primary
aluminum, and fabricated aluminum products, and is a major supplier of
alumina and primary aluminum in the domestic and international markets.
MAXXAM Inc. (ASE:MXM) directly and indirectly holds approximately 63 percent
of Kaiser.
Accuride Corporation is North America's largest manufacturer and supplier of
wheels for heavy/medium trucks and trailers. The Company offers the broadest
product line in North American heavy/medium wheels. Accuride Corporation also
produces wheels for buses, commercial light trucks and sport utility
vehicles, and passenger cars. Accuride Corporation has steel wheel operations
in Henderson, Kentucky; Columbia, Tennessee; London, Ontario, Canada; and at
its joint venture in Monterrey, Mexico. Accuride Corporation is involved in
the production and sales of aluminum wheels through AKW L.P. in Erie,
Pennsylvania, and in a commercial tire and wheel assembly joint venture in
Springfield, Ohio and Talbotville, Ontario, Canada.
This press release contains statements that constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. The company cautions that any such forward-looking statements
are not guarantees of future performance and involve significant risks and
uncertainties, and that actual results may vary materially from those
expressed or implied in the forward-looking statements as a result of various
factors.
###
