<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): September 21, 1999
CENTURY ALUMINUM COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
DELAWARE 0-27918 13-3070826
<S> <C> <C>
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
Incorporation)
</TABLE>
2511 GARDEN ROAD
BUILDING A, SUITE 200
MONTEREY, CALIFORNIA 93940
(Address of principal executive offices) (Zip Code)
(831) 642-9300
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 21, 1999 Century Aluminum Company, a Delaware
corporation ("Century" or the "Company"), and Century Aluminum of West Virginia,
Inc., a Delaware corporation and wholly-owned subsidiary of Century ("Century
WV"), completed the sale to Pechiney Rolled Products LLC, a Delaware limited
liability company ("Pechiney"), of certain assets and the assumption of certain
liabilities of Century WV's rolled products unit at Ravenswood, West Virginia
(the "Rolling Business") and all of the issued and outstanding shares of common
stock of Century Cast Plate, Inc., a Delaware corporation and wholly-owned
subsidiary of Century ("Century CP"). The parties consummated the sale pursuant
to the Stock and Asset Purchase Agreement dated July 26, 1999 (the "Purchase
Agreement") by and among Century, Century WV and Pechiney. The aggregate
purchase price for the Rolling Business and Century CP was $248 million, subject
to certain post-closing adjustments. The purchase price was determined by
arms'-length negotiations between the parties. Century used a portion of the
purchase price to repay its outstanding debt.
The Rolling Business assets that were sold include Century
WV's casting operation at the Ravenswood, West Virginia facility. The facility,
which has the capacity to produce up to 600 million pounds (270,000 metric
tons) of rolled aluminum products a year, provides premium sheet and plate
products to the aerospace and transportation markets, and produces brazing
sheet used to manufacture radiators for passenger cars and trucks.
Century CP's operations include a fabrication plant located in
Vernon, California. The fabrication plant has the capacity to produce 15 million
pounds (7,000 metric tons) a year of cast aluminum plate. Cast aluminum plate is
used principally in the machinery and equipment market.
In connection with the Purchase Agreement, Century WV and
Pechiney entered into a Molten Aluminum Purchase Agreement dated as of September
21, 1999 (the "Metal Agreement"). Pursuant to the Metal Agreement, Pechiney has
agreed to purchase from Century WV substantial quantities of molten aluminum
produced at Century WV's reduction facility in Ravenswood, West Virginia at a
price which is based on a quoted average market price as reported for the month
immediately preceding the month of delivery. In addition, Pechiney has agreed to
provide casting services to Century WV in connection with the excess molten
aluminum produced at Century WV's reduction facility which is not purchased by
Pechiney under the Metal Agreement. In connection with the transition of
ownership of the Rolling Business, Century has agreed to make available certain
of its executive officers to provide consulting services to Pechiney.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
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<PAGE> 3
(i) Unaudited pro forma consolidated balance sheet of
Century Aluminum Company and subsidiaries as of June
30, 1999 giving effect to the disposition of the
Rolling Business and Century CP as of June 30, 1999.
(ii) Unaudited pro forma consolidated statements of
operations of Century Aluminum Company and
subsidiaries for the year ended December 31, 1998 and
for the six month period ended June 30, 1999 giving
effect to the disposition of the Rolling Business and
Century CP as if such transaction had occurred
January 1, 1998.
The unaudited pro forma consolidated financial statements
presented herein are shown for illustrative purposes only and are not
necessarily indicative of the financial position or results of operations of the
Company that would have actually resulted had the transaction occurred as of the
date or for the periods presented, or that may result in the future.
PRO FORMA FINANCIAL INFORMATION.
The following unaudited pro forma consolidated financial
information has been presented for the balance sheet as of June 30, 1999 and for
the statements of operations for the year ended December 31, 1998 and the six
month period ended June 30, 1999. The historic consolidated financial
information presented herein should be read in conjuction with the audited
consolidated financial statements and notes thereto included in the Company's
annual report on Form 10-K for the year ended December 31, 1998 and the
unaudited consolidated financial statements and notes thereto included in the
Company's quarterly report on Form 10-Q for the period ended June 30, 1999.
The following unaudited pro forma consolidated financial
information is based on the historical consolidated financial statements of the
Company. The unaudited pro forma consolidated balance sheet gives effect to:
(i) the sale of the Rolling Business assets including all of the issued and
outstanding shares of Century CP and the assumption by Pechiney of certain
Rolling Business liabilities, (ii) the estimated costs and other charges
related to the transaction, (iii) the repayment of the outstanding borrowings
under the credit facility and (iv) the anticipated income tax effects related
to the transaction.
The unaudited pro forma consolidated statements of operations
give effect to: (i) the elimination of the Rolling Business and Century CP, (ii)
the estimated effects of the Metal Agreement and (iii) the elimination of
interest expense resulting from the reduction of the outstanding balance of the
Company's credit facility, as if such transactions occurred on January 1, 1998.
The gain from the sale of the Rolling Business and Century CP has not been
reflected in the pro forma consolidated statements of operations.
The unaudited pro forma adjustments are based upon available
information and certain assumptions that management believes are reasonable. The
unaudited pro forma consolidated financial information does not purport to
represent what the Company's financial position or results of operations would
actually have been had the transaction in fact occurred at such dates or to
project the Company's financial position or results of operations at or for any
future date or period. The unaudited pro forma consolidated financial
information should be read in conjunction with the historical consolidated
financial statements of the Company.
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<PAGE> 4
The following unaudited pro forma financial information does
not reflect working capital changes related to the estimated effects of the
Metal Agreement with Pechiney.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
JUNE 30, 1999
---------------------------------------------------
PRO FORMA
ACTUAL ADJUSTMENTS PRO FORMA
------ ----------- ---------
(IN THOUSANDS)
ASSETS
CURRENT ASSETS:
<S> <C> <C> <C>
Cash................................................................... $ 627 $241,877 (a) $ 130,504
(112,000) (b)
Restricted cash equivalents............................................ 5,817 5,817
Accounts receivable, trade - net....................................... 87,624 (76,120) (a) 11,504
Due from affiliates.................................................... 7,818 7,818
Inventories............................................................ 182,875 (152,185) (a) 30,690
Prepaid and other assets............................................... 9,620 (465) (a) 28,433
19,278 (c)
-------- ---------- ---------
Total current assets............................................. 294,381 (79,615) 214,766
PROPERTY, PLANT AND EQUIPMENT - NET........................................ 228,784 (126,309) (a) 102,475
OTHER ASSETS............................................................... 18,261 (2,703) (a) 297
(15,261) (c)
-------- ---------- ---------
TOTAL........................................................... $541,426 $(223,888) $ 317,538
======== ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable, trade.............................................. $37,916 $ (13,569) (a) $ 24,347
Due to affiliates.................................................... 13,711 (9,645) (a) 4,066
Accrued and other current liabilities................................ 31,755 (2,473) (a) 29,282
Accrued employee benefits costs - current portion.................... 15,565 (11,046) (a) 4,519
-------- ---------- ---------
Total current liabilities....................................... 98,947 (36,733) 62,214
-------- ---------- ---------
REVOLVING TERM LOAN....................................................... 112,000 (112,000) (b) -
ACCRUED PENSION BENEFITS COSTS - Less current portion..................... 10,496 (5,223) (a) 5,273
ACCRUED POSTRETIREMENT BENEFITS COSTS - Less current portion 129,015 (91,031) (a) 37,984
OTHER LIABILITIES......................................................... 20,981 (13,411) (a) 22,564
14,994 (c)
-------- ---------- ---------
Total noncurrent liabilities.................................... 272,492 (206,671) 65,821
-------- ---------- ---------
SHAREHOLDERS' EQUITY:
Common stock......................................................... 202 202
Additional paid-in capital........................................... 164,406 164,406
Retained earnings.................................................... 5,379 30,493 (a) 24,895
(10,977) (c)
-------- ---------- ---------
Total shareholders' equity...................................... 169,987 19,516 189,503
-------- ---------- ---------
TOTAL........................................................... $ 541,426 $ (223,888) $ 317,538
========= =========== =========
</TABLE>
- --------------------------
(a) Reflects the sale of the net assets of the Rolling Business and the
stock of Century CP for $241.9 million including transaction costs and
other charges related to the transaction
(b) Reflects principal repayment of the credit facility.
(c) Reflects the anticipated tax effect of the transaction.
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<PAGE> 5
2,2 UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1998
-----------------
PRO FORMA
ACTUAL ADJUSTMENTS PRO FORMA
------ ----------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
NET SALES:
<S> <C> <C> <C>
Third-party customers ....................... $ 576,006 $ (534,522) (a) $ 272,968
231,484) (b)
Related parties ............................. 74,252 74,252
--------- ---------- ---------
650,258 (303,038) 347,220
COST OF GOODS SOLD ............................... (611,796) 501,098 (a) (323,721)
(213,023) (b)
--------- ---------- ---------
GROSS PROFIT ..................................... 38,462 (14,963) 23,499
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES ..................... (19,246) 7,507 (a) (11,739)
--------- ---------- ---------
OPERATING INCOME ................................. 19,216 (7,456) 11,760
INTEREST EXPENSE - Net ........................... (2,204) 2,204 (a) -
NET GAIN ON FORWARD CONTRACTS .................... 10,574 1,170 (a) 11,744
OTHER INCOME ..................................... 553 (185)(a) 368
--------- ---------- ---------
INCOME BEFORE INCOME TAXES ....................... 28,139 (4,267) 23,872
INCOME TAX EXPENSE ............................... (10,202) 1,536 (c) (8,666)
--------- ---------- ---------
NET INCOME ....................................... $ 17,937 $ (2,731) $ 15,206
========= ========= ==========
EARNINGS PER COMMON SHARE
Basic ....................................... $ 0.90 $ 0.76
========= ==========
Diluted ..................................... $ 0.89 $ 0.75
========= ==========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
Basic ............................................ 20,000 20,000
========= ==========
Diluted .......................................... 20,266 20,266
========= ==========
</TABLE>
- ------------------
(a) Reflects the elimination of the Rolling Business and Century CP and
the reduction of interest expense related to the retirement of debt.
(b) Reflects the estimated effects of the Metal Agreement with Pechiney.
(c) Reflects the estimated tax effects of (a) and (b) above.
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<PAGE> 6
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999
-------------
PRO FORMA
ACTUAL ADJUSTMENTS PRO FORMA
------ ----------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
NET SALES:
<S> <C> <C> <C>
Third-party customers............................. $ 294,623 $(268,605)(a) $ 120,892
94,874 (b)
Related parties................................... 37,742 37,742
---------- --------- -----------
332,365 (173,731) 158,634
COST OF GOODS SOLD..................................... (331,633) 261,799 (a) (164,868)
(95,034) (b)
---------- --------- -----------
GROSS PROFIT (LOSS).................................... 732 (6,966) (6,234)
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES........................... (8,601) 3,476 (a) (5,125)
---------- --------- -----------
OPERATING LOSS......................................... (7,869) (3,490) (11,359)
INTEREST EXPENSE - Net................................. (3,552) 3,552 (a) -
NET LOSS ON FORWARD CONTRACTS.......................... (2,501) (842) (a) (3,343)
OTHER EXPENSE.......................................... (669) 332 (a) (337)
---------- --------- -----------
LOSS BEFORE INCOME TAXES............................... (14,591) (448) (15,039)
INCOME TAX BENEFIT..................................... 6,752 161 (c) 6,913
---------- --------- -----------
NET LOSS............................................... $ (7,839) $(287) $ (8,126)
========== ========= ===========
LOSS PER COMMON SHARE
Basic ............................................ ($0.39) ($.40)
========== ==========
Diluted........................................... ($0.39) ($.40)
========== ==========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
Basic ............................................ 20,202 20,202
---------- ----------
Diluted........................................... 20,323 20,323
========== ==========
</TABLE>
- ------------------
(a) Reflects the elimination of the Rolling Business and Century CP and the
reduction of interest expense related to the retirement of debt.
(b) Reflects the estimated effects of the Metal Agreement with Pechiney.
(c) Reflects the estimated tax effects of (a) and (b) above.
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<PAGE> 7
(c) Exhibits.
The following exhibits are filed with this report on Form 8-K:
Exhibit Number Description
- -------------- -----------
2.1* Stock and Asset Purchase Agreement dated July 26, 1999 by and
among Century Aluminum Company, Century Aluminum of West
Virginia, Inc. and Pechiney Rolled Products LLC
2.2* Management Services Agreement dated as of September 21, 1999
by and between Century Aluminum Company and Pechiney Rolled
Products LLC
2.3+ Molten Aluminum Purchase Agreement dated as of September 21,
1999 by and between Century Aluminum of West Virginia, Inc.
and Pechiney Rolled Products LLC
2.4* Amended and Restated Shared Facilities and Services Agreement
dated as of September 21, 1999 by and between Century Aluminum
of West Virginia, Inc. and Pechiney Rolled Products LLC
99.1 Press Release dated September 21, 1999
- ------------------
* Schedules are omitted and will be furnished to the Commission upon request.
+ Portions of this Exhibit have been deleted and filed separately with the
Securities and Exchange Commission pursuant to the Company's request for
confidential treatment pursuant to Rule 24b-2 under the Securities Exchange
Act.
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<PAGE> 8
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 thereunto duly authorized.
CENTURY ALUMINUM COMPANY
Date: October 6, 1999 By: /s/ David W. Beckley
--------------- ------------------------------------
Executive Vice President
and Chief Financial Officer
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<PAGE> 1
Exhibit 2.1
STOCK AND ASSET PURCHASE AGREEMENT
STOCK AND ASSET PURCHASE AGREEMENT, dated as of July 26, 1999
(this "AGREEMENT"), among Century Aluminum Company, a Delaware corporation
("CENTURY"), Century Aluminum of West Virginia, Inc., a Delaware corporation
("CENTURY WV" and, together with Century, the "SELLERS") and Pechiney Rolled
Products LLC, a Delaware limited liability company (the "PURCHASER").
W I T N E S S E T H:
WHEREAS, the Sellers, directly and indirectly, are engaged in
the Business (as defined herein);
WHEREAS, Century WV desires to sell to the Purchaser, and the
Purchaser desires to purchase from Century WV, all right, title and interest of
Century WV in and to property and assets relating to the Rolling Business (as
defined herein), and in connection therewith the Purchaser is willing to assume
certain liabilities of Century WV and Century relating thereto, all upon the
terms and subject to the conditions set forth herein; and
WHEREAS, Century desires to sell to the Purchaser, and the
Purchaser desires to purchase from Century, 100 shares (the "SHARES") of common
stock ("COMMON STOCK"), par value $1.00 per share, of Century Cast Plate, Inc.
("CENTURY CP"), upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements and covenants hereinafter set forth, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"ACTION" means any claim, action, charge, suit, arbitration,
inquiry, proceeding or investigation by or before any Governmental Authority.
"ADJUSTED REFERENCE NET WORKING CAPITAL" means an amount equal
to the Net Working Capital reflected on the Reference Balance Sheet plus (a) the
Adjusted Pre-Closing
<PAGE> 2
NWC Increase in the event the Purchase Price is adjusted upward pursuant to
Section 2.08(b) or (b) minus the Adjusted Pre-Closing NWC Decrease in the event
the Purchase Price is adjusted downward pursuant to Section 2.08(b); provided
that if the Purchase Price is not adjusted pursuant to Section 2.08, the
Adjusted Reference Net Working Capital shall equal the Net Working Capital
reflected on the Closing Balance Sheet.
"AFFILIATE" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
Controls, is Controlled by, or is under common Control with, such specified
Person.
"AGREEMENT" means this Stock and Asset Purchase Agreement,
dated as of July 26, 1999, among the Sellers and the Purchaser (including the
Exhibits and Schedules hereto and the Disclosure Schedule) and all amendments
hereto made in accordance with the provisions of Section 11.09.
"ANCILLARY AGREEMENTS" means the Bill of Sale, the Deed, the
Assumption Agreement, the Molten Aluminum Purchase Agreement, the Shared
Services Agreement, the Management Services Agreement, the Vernon Indemnity
Agreement and the Ravenswood Indemnity Agreement.
"ASSETS" means the Shares and the Rolling Assets.
"ASSUMPTION AGREEMENT" means the Assumption Agreement to be
executed by the Purchaser and Century WV on the Closing Date substantially in
the form of Exhibit A.
"BILL OF SALE" means the Bill of Sale and Assignment to be
executed by Century WV on the Closing Date substantially in the form of Exhibit
B.
"BUSINESS" means the Rolling Business and the business of the
manufacture by Century CP and sale thereof of cast aluminum plate (meaning all
products that are cast through a horizontal or vertical process which produces
plates with thickness of more than 1/4 inch) as conducted immediately prior to
the date hereof.
"BUSINESS DAY" means any day that is not a Saturday, a Sunday
or other day on which banks are required or authorized by Law to be closed in
The City of New York.
"CLOSING BALANCE SHEET" means the statement of assets and
liabilities of the Business, to be prepared pursuant to Section 2.09(a) and to
be dated as of the Closing Date.
"CODE" means the Internal Revenue Code of 1986, as amended
through the date hereof.
"CONFIDENTIALITY AGREEMENT" means the letter agreement dated
January 4, 1999 between Century and Pechiney, a French societe anonyme.
2
<PAGE> 3
"CONTROL" (including the terms "CONTROLLED BY" and "UNDER
COMMON CONTROL WITH"), with respect to the relationship between or among two or
more Persons, means the possession, directly or indirectly or as trustee,
personal representative or executor, of the power to direct or cause the
direction of the affairs or management of a Person, whether through the
ownership of voting securities, as trustee, personal representative or executor,
by contract or otherwise, including, without limitation, the ownership, directly
or indirectly, of securities having the power to elect a majority of the board
of directors or similar body governing the affairs of such Person.
"DEED" means the deed to be executed by Century WV on the
Closing Date substantially in the form of Exhibit C in order to convey to the
Purchaser the Ravenswood Owned Real Property.
"DESIGNATED AMOUNT" means U.S.$1,000,000.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached
hereto, dated as of the date hereof, and forming a part of this Agreement.
"ENCUMBRANCE" means any security interest, pledge, mortgage,
lien (including, without limitation, environmental and tax liens), charge,
encumbrance, adverse claim, preferential arrangement, or restriction of any
kind, including, without limitation, any restriction on the use, voting,
transfer, receipt of income or other exercise of any attributes of ownership.
"ENVIRONMENTAL CLAIMS" means any and all actions, suits,
demands or demand letters by any Governmental Authority, claims, liens, notices
of noncompliance or violation by any Governmental Authority, notices of
liability or potential liability by any Governmental Authority, investigations,
proceedings, consent orders or consent agreements relating in any way to any
Environmental Law, any Environmental Permit or any Hazardous Materials.
"ENVIRONMENTAL LAW" means any Law, and any legally binding
judicial or administrative interpretation thereof, in each case in effect as of
the Closing, including any judicial or administrative order, consent decree or
judgment, relating to pollution or protection of the environment, health, safety
or natural resources, including, without limitation, those relating to the use,
handling, transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval,
identification number, license or other authorization required under any
applicable Environmental Law.
"ESSENTIAL FACILITIES" means the real property and assets
identified as such in the Shared Services Agreement.
3
<PAGE> 4
"GOVERNMENTAL AUTHORITY" means any United States federal,
state or local or any foreign government, governmental, regulatory or
administrative authority, agency or commission or any court, tribunal, or
judicial or arbitral body.
"GOVERNMENTAL ORDER" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
"HAZARDOUS MATERIAL" means petroleum and petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls ("PCB" or "PCBs") and any other chemicals,
materials or substances, in each case and to the extent regulated under any
applicable Environmental Law.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"INDEBTEDNESS" means, with respect to any Person, (a) all
indebtedness of such Person, whether or not contingent, for borrowed money, (b)
all obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (c) all obligations of such Person as lessee under leases
that have been or should be, in accordance with U.S. GAAP, recorded as capital
leases, (d) all obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities, (e) all obligations of such
Person to purchase, redeem, retire, defease or otherwise acquire for value any
capital stock of such Person or any warrants, rights or options to acquire such
capital stock, valued, in the case of redeemable preferred stock, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (f) all Indebtedness of others referred to in clauses (a) through (e)
above guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an agreement (i)
to pay or purchase such Indebtedness or to advance or supply funds for the
payment or purchase of such Indebtedness, (ii) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Indebtedness or to assure
the holder of such Indebtedness against loss, (iii) to supply funds to or in any
other manner invest in the debtor (including any agreement to pay for property
or services irrespective of whether such property is received or such services
are rendered) or (iv) otherwise to assure a creditor against loss, and (i) all
Indebtedness referred to in clauses (a) through (e) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Encumbrance on property (including, without
limitation, accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness.
"INTELLECTUAL PROPERTY" means (a) inventions, whether or not
patentable, whether or not reduced to practice or whether or not yet made the
subject of a pending patent application or applications, (b) ideas and
conceptions of potentially patentable subject matter, including, without
limitation, any patent disclosures, whether or not reduced to practice and
whether or not yet made the subject of a pending patent application or
applications, (c) national (including the
4
<PAGE> 5
United States) and multinational statutory invention registrations, patents,
patent registrations and patent applications (including all reissues, divisions,
continuations, continuations-in-part, extensions and reexaminations) and all
rights therein provided by multinational treaties or conventions and all
improvements to the inventions disclosed in each such registration, patent or
application, (d) trademarks, service marks, trade dress, logos, trade names and
corporate names, whether or not registered, including all common law rights, and
registrations and applications for registration thereof, including, but not
limited to, all marks registered in the United States Patent and Trademark
Office, the Trademark Offices of the States and Territories of the United States
of America, and the Trademark offices of other nations throughout the world, and
all rights therein provided by multinational treaties or conventions, (e)
copyrights (registered or otherwise) and registrations and applications for
registration thereof, and all rights therein provided by multinational treaties
or conventions, (f) computer software, including, without limitation, source
code, operating systems and specifications, data, data bases, files,
documentation and other materials related thereto, data and documentation, (g)
trade secrets and confidential, technical or business information (including
ideas, formulas, compositions, inventions, and conceptions of inventions whether
patentable or unpatentable and whether or not reduced to practice), (h) whether
or not confidential, technology (including know-how and show-how), manufacturing
and production processes and techniques, research and development information,
drawings, specifications, designs, plans, proposals, technical data,
copyrightable works, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and supplier lists and
information, (i) copies and tangible embodiments of all the foregoing, in
whatever form or medium, (j) all rights to obtain and rights to apply for
patents, and to register trademarks and copyrights, and (k) all rights to sue
and recover and retain damages and costs and attorneys' fees for present and
past infringement of any of the Intellectual Property rights hereinabove set
out.
"INVENTORIES" means all inventory, merchandise,
work-in-progress, finished goods, and raw materials related to the Business,
maintained, held or stored by or for the Sellers or Century CP in respect of the
Business on the Closing Date and any prepaid deposits for any of the same.
"IRS" means the Internal Revenue Service of the United States.
"KNOWLEDGE OF THE SELLERS" or "TO THE SELLERS' KNOWLEDGE"
means the knowledge of any of (a) any officer of the Sellers or Century CP or
(b) any Senior Manager, but only in respect of a Senior Manager's department or
area; which in each case shall be deemed to include the knowledge which any such
person would have had if they had made reasonable inquiry.
"LAW" means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, order, requirement or rule of common law.
"LLC" means the limited liability company established pursuant
to the LLC Agreement to own the Essential Facilities.
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<PAGE> 6
"LLC AGREEMENT" means the limited liability company agreement
to be entered into between Century WV and the Purchaser pursuant to the Shared
Services Agreement.
"LEASED REAL PROPERTY" means the real property leased pursuant
to the office leases listed in Schedule 1.01(a).
"LIABILITIES" means any and all debts, liabilities and
obligations, whether accrued or fixed, absolute or contingent, matured or
unmatured, known or unknown, or determined or determinable, including, without
limitation, those arising under any Law (including, without limitation, any
Environmental Law), Action or Governmental Order and those arising under any
contract, agreement, arrangement, commitment or undertaking.
"LICENSED INTELLECTUAL PROPERTY" means all Intellectual
Property licensed or sublicensed from a third party by (a) Century WV and used
in connection with the Business or (b) Century CP.
"MAJOR CUSTOMER" means The Boeing Company.
"MANAGEMENT SERVICES AGREEMENT" means the Management Services
Agreement to be entered into between Century and the Purchaser, in the form
attached hereto as Exhibit D.
"MATERIAL ADVERSE EFFECT" means any circumstance, change in,
or effect on, the Business that, individually or in the aggregate with any other
circumstances, changes in, or effects on, the Business: (a) is, or is reasonably
likely to be, materially adverse to the Business or the assets or liabilities
(including, without limitation, contingent liabilities), results of operations
or the condition (financial or otherwise) of the Business, taken as a whole, or
(b) materially adversely affects, or is reasonably likely to materially
adversely affect, the ability of the Purchaser to operate or conduct the
Business in the manner in which it is currently operated or conducted, except,
in each case for such circumstances, changes or effects resulting from changes
in general economic market conditions or changes that generally affect
businesses of the same type as the Business.
"MOLTEN ALUMINUM PURCHASE AGREEMENT" means the Molten Aluminum
Purchase Agreement to be entered into between Century WV and the Purchaser, in
the form attached hereto as Exhibit E.
"NET WORKING CAPITAL" means the excess of the current assets
over the current liabilities (in each case as set forth on Schedule 1.01(b))
shown on any specified statement of assets and liabilities of the Business
prepared on a basis consistent with the preparation of the Reference Balance
Sheet.
"OWNED INTELLECTUAL PROPERTY" means all Intellectual Property
in and to which Century WV or Century CP holds, or has a right to hold, right,
title and interest and which, in the case of Century WV, is used in connection
with the Business.
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"OWNED REAL PROPERTY" means the Ravenswood Owned Real Property
and the Vernon Owned Real Property.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PBGC AGREEMENT" means the agreement described in Section
6.07.
"PERMITTED ENCUMBRANCES" means such of the following as to
which no enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) liens for Taxes, assessments and governmental
charges or levies not yet due and payable; (b) Encumbrances imposed by Law, such
as materialmen's, mechanics', carriers', workmen's, converters', warehousemen's
and repairmen's liens and other similar liens arising in the ordinary course of
business securing obligations; (c) pledges or deposits to secure obligations
under workers' compensation laws or similar legislation or to secure public or
statutory obligations; and (d) minor survey exceptions, reciprocal easement
agreements and other customary encumbrances on title to real property that (i)
were not incurred in connection with any Indebtedness, (ii) do not render title
to the property encumbered thereby unmarketable and (iii) do not, individually
or in the aggregate, materially adversely affect the value of or the use of such
property for its present purposes.
"PERMITTED PROPERTY ENCUMBRANCES" means the encumbrances
listed in Schedule 1.01(c).
"PERSON" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group that would be deemed to be a person under Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended.
"PURCHASER'S ACCOUNTANTS" means PricewaterhouseCoopers,
independent accountants of the Purchaser.
"RAVENSWOOD INDEMNITY AGREEMENT" means the indemnification
agreement relating to the Rolling Business to be entered into between Century WV
and the Purchaser, in the form attached hereto as Exhibit F.
"RAVENSWOOD OWNED REAL PROPERTY" means the real property
listed in Schedule 1.01(d), together with all buildings and other structures,
facilities or improvements currently or hereafter located thereon, all fixtures,
systems, equipment and items of personal property attached or appurtenant
thereto and all easements, licenses, rights and appurtenances relating to the
foregoing.
"REAL PROPERTY" means the Leased Real Property and the Owned
Real Property.
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"RECEIVABLES" means any and all accounts receivable, notes and
other amounts receivable from customers arising from the conduct of the Business
before the Closing Date, whether or not in the ordinary course, together with
any unpaid financing charges accrued thereon.
"REFERENCE BALANCE SHEET" means the statement of assets and
liabilities of the Business, dated as of December 31, 1998, a copy of which is
set forth in Section 3.07(a)(i) of the Disclosure Schedule.
"REFERENCE BALANCE SHEET DATE" means December 31, 1998.
"REGULATIONS" means the Treasury Regulations (including
Temporary Regulations) promulgated by the United States Department of Treasury
with respect to the Code or other federal tax statutes.
"RELEASE" means disposing, discharging, injecting, spilling,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing and
the like of Hazardous Materials into or upon any land or water or air or
otherwise entering into the environment.
"REMEDIAL ACTION" means all action to (i) clean up, remove,
treat or handle in any other way Hazardous Materials in the environment; (ii)
restore or reclaim the environment or natural resources with respect to
Hazardous Materials; (iii) prevent the Release of Hazardous Materials so that
they do not migrate, endanger or threaten to endanger public health or the
environment; or (iv) perform remedial investigations, feasibility studies,
corrective actions, closures and postremedial or postclosure studies,
investigations, operations, maintenance and monitoring on, about or in any Real
Property in each case in respect of Hazardous Materials.
"ROLLING BUSINESS" means the business of the casting operation
and the manufacture of flat-rolled sheet aluminum (including, without
limitation, plate and coil, distributor coil, flat sheet and brazing sheet), in
each case at the Ravenswood, West Virginia facility of Century WV and the sale
of such products, all as conducted immediately prior to the date hereof.
"SELLERS' ACCOUNTANTS" means Deloitte & Touche, L.P.,
independent accountants of the Sellers.
"SENIOR MANAGERS" means the individuals holding, or performing
the functions corresponding to, the positions listed in Schedule 1.01(e).
"SHARED SERVICES AGREEMENT" means the Shared Services
Agreement dated the date hereof between Century WV and the Purchaser.
"SUBSIDIARIES" means any and all corporations, partnerships,
joint ventures, associations and other entities controlled by Century directly
or indirectly (other than Century WV) through one or more intermediaries.
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"TAX" or "TAXES" means any and all taxes, fees, levies,
duties, tariffs, imposts, and other charges of any kind (together with any and
all interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any government or taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes;
license, registration and documentation fees; and customs' duties, and similar
charges.
"U.S. GAAP" means United States generally accepted accounting
principles and practices in effect from time to time applied consistently
throughout the periods involved.
"VERNON INDEMNITY AGREEMENT" means the indemnification
agreement relating to Century CP to be entered into between Century and the
Purchaser, in the form attached hereto as Exhibit G.
"VERNON OWNED REAL PROPERTY" means the real property listed in
Schedule 1.01(f), together with all buildings and other structures, facilities
or improvements currently or hereafter located thereon, all fixtures, systems,
equipment and items of personal property attached or appurtenant thereto and all
easements, licenses, rights and appurtenances relating to the foregoing.
SECTION 1.02. Other Defined Terms. The following terms have
the meanings defined for such terms in the Sections set forth below:
Term Section
---- -------
Adjusted Pre-Closing NWC Decrease 2.08(b)
Adjusted Pre-Closing NWC Increase 2.08(b)
Agreed Estimated Net Working Capital 2.08(a)
Alcoa 3.17(a)(x)
Alcoa Agreement 6.12
Alcoa Plans 6.13(a)
Allocation Statement 2.04(b)
Assumed Liabilities 2.02(a)
Business Assets 3.20(a)
Century Preamble
Century Common Stock Recitals
Century CP Recitals
Century CP Plan 3.22(h)
Century CP Plans 3.22(h)
Century WV Preamble
Century WV Shares 3.02(a)
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Term Section
----- -------
Closing 2.05
Closing Date 2.05
Code section 338(h)(10) Election 7.07(a)
Collateral 8.02(d)
Common Stock Recitals
Covered Products 5.07(a)
Default Estimated Net Working Capital 2.08(a)
Disclosure Schedule Supplements 3.31
Disclosure Schedule Supplement 5.05(a)
Elections 7.07(a)
Employee Amounts 6.06
ERISA 3.22(a)
Excluded Assets 2.01(b)
Excluded Liabilities 2.02(b)
Final Determination 7.04
Financial Statements 3.07(a)
Form 8023 7.07(b)
Former Employees 6.03(b)
Indemnified Party 9.04(a)
Indemnifying Party 9.04(a)
Independent Accounting Firm 2.09(b)(ii)
Independent Expert 9.05(b)
Initial Transfer Amount 6.03(e)
Kaiser 3.17(a)(x)
Lockheed 8.02(l)
Loss 9.02(a)
Market Risk Period 6.03(g)
Material Contracts 3.17(a)
Material Licenses 3.30
Money Market Vehicle 6.03(g)
Multiemployer Plan 3.22(b)
Multiple Employer Plan 3.22(b)
New Collective Bargaining Agreement 2.10(a)
New Defined Benefit Plans 6.03(a)
New Vernon Plans 6.13(a)
Old Collective Bargaining Agreement 2.10(a)
PBO Amount 6.03(g)
Plans 3.22(a)
Purchase Price 2.04(a)
Purchaser Preamble
Purchaser Indemnified Party 9.02(a)
Purchaser's Actuary 6.03(d)
Purchaser's Defined Contribution Plans 6.11
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Term Section
---- -------
Reduction Facility 2.01(b)(v)
Restricted Period 5.07(a)
Returns 7.02
Rolling Assets 2.01(a)
Safe Harbor Assumptions 6.03(d)
Section 9.02(a)(iii) Loss 9.05(b)
Section 9.03 Loss 9.05(b)
Selected Business Assets 3.20(a)
Seller Indemnified Party 9.03(a)
Sellers' Actuary 6.03(d)
Sellers' Defined Contribution Plans 6.11
Sellers Estimated Net Working Capital 2.08(a)
Sellers' Pension Plans 6.03(b)
Sellers' Recitals
Shared Intellectual Property 5.12
Shares Recitals
Third Party Claims 9.04(a)
Title Company 8.02(n)
Title Policy 8.02(n)
Transferred Benefits 6.03(b)
Transferred Employee 6.01
True-Up Amount 6.03(e)
True-Up Date 6.03(e)
USWA 8.02(k)
Vernon Employees 6.13(a)
WARN 3.22(g)
ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Purchase and Sale of Assets. (a) On the terms
and subject to the conditions of this Agreement, Century WV shall, on the
Closing Date, sell, assign, transfer, convey and deliver to the Purchaser or
cause to be sold, assigned, transferred, conveyed and delivered to the
Purchaser, and the Purchaser shall purchase from Century WV, on the Closing
Date, all the assets, properties, goodwill and business of every kind and
description and wherever located, whether tangible or intangible, real, personal
or mixed, directly or indirectly owned by Century WV or to which Century WV is
directly or indirectly entitled and, in any case, belonging to or used in the
Rolling Business, other than the Excluded Assets described in Section 2.01(b)
(the assets to be purchased by the Purchaser being referred to as the "ROLLING
ASSETS"), including, without limitation, the following:
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(i) the Rolling Business as a going concern;
(ii) all the Ravenswood Owned Real Property, and all rights in
respect of the Leased Real Property;
(iii) all furniture, fixtures, equipment, machinery, spare
parts, packaging materials, oil and other tangible personal property
used or held for use by the Sellers at the locations at which the
Rolling Business is conducted (including, without limitation, tangible
personal property held in storerooms), or otherwise owned or held by
the Sellers at the Closing Date for use in the conduct of the Rolling
Business and not otherwise included in clause (ii) above, including,
without limitation, the items listed in Schedule 2.01(a)(iii);
(iv) all vehicles and transportation equipment, including,
without limitation, the items listed in Schedule 2.01(a)(iv);
(v) all Inventories of the Rolling Business;
(vi) all Receivables of the Rolling Business;
(vii) all books of account, general, environmental, health and
safety, financial, tax and personnel records, claim and grievance
records, environmental reports, invoices, technical records and
drawings, shipping records, supplier lists, correspondence and other
documents, records and files and all computer software and programs and
any rights thereto owned, associated with or employed by the Sellers or
used in, or relating to, the Rolling Business at the Closing Date,
other than organization documents, minute and stock record books and
the corporate seal of the Sellers;
(viii) the goodwill of the Sellers relating to the Rolling
Business;
(ix) subject to Section 5.12, all the Sellers' right, title
and interest in, to and under the Owned Intellectual Property and, the
Licensed Intellectual Property used in, or relating to, the Rolling
Business;
(x) all claims, causes of action, choses in action, rights of
recovery and rights of set-off of any kind (including rights to
insurance proceeds relating to an Assumed Liability and rights under
and pursuant to all warranties, representations and guarantees made by
suppliers of products, materials or equipment, or components thereof),
pertaining to, or arising out of, the Rolling Business and enuring to
the benefit of the Sellers;
(xi) all sales and promotional literature, customer lists and
other sales-related materials owned, used, associated with or employed
by the Sellers at the Closing Date used in, or relating to, the Rolling
Business;
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(xii) all rights of the Sellers under all contracts, licenses,
sublicenses, agreements, leases, commitments, and sales and purchase
orders, and under all commitments, bids and offers (to the extent such
offers are transferable), used in, or relating to, the Rolling Business
including, without limitation, those listed in Schedule 2.01(a)(xii);
(xiii) all municipal, state and federal franchises, permits,
licenses, agreements, waivers and authorizations held or used by the
Sellers in connection with, or required for, the Rolling Business, to
the extent transferable, including, without limitation, those listed in
Schedule 2.01(a)(xiii);
(xiv) all the Sellers' right, title and interest on the
Closing Date in, to and under all other assets, rights and claims of
every kind and nature used in the operation of, or residing with, the
Rolling Business;
(xv) to the extent contemplated in the Shared Services
Agreement, the membership interest in the LLC; and
(xvi) all assets of the Rolling Business to the extent
specifically reflected in the Closing Balance Sheet.
(b) The Rolling Assets shall exclude the following assets
owned or leased by Century WV (the "EXCLUDED ASSETS"):
(i) all real property, whether owned or leased, together with,
to the extent owned or leased, all buildings and other structures,
facilities or improvements currently or hereafter located thereon, and
all fixtures, systems and equipment attached or appurtenant thereto
other than the Ravenswood Owned Real Property and the Leased Real
Property;
(ii) all cash, cash equivalents and bank accounts owned by the
Century WV at the Closing Date, including, without limitation, all
deposits of Century WV as security for workers' compensation claims;
(iii) all rights of Century WV under this Agreement and the
Ancillary Agreements;
(iv) the Oracle GEMMS software and any rights or claims in
respect thereof;
(v) all the assets, properties and goodwill belonging to or
used by Century WV in connection with its operation of its reduction
facility in Ravenswood, West Virginia ("REDUCTION FACILITY") which are
not also used in the operation of the Business;
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(vi) in respect of assets, properties and goodwill used by
both the Reduction Facility and the Rolling Business, such assets,
properties and goodwill used primarily by the Reduction Facility;
(vii) the assets and properties ownership of which is to be
retained by Century WV pursuant to the Shared Services Agreement; and
(viii) all rights to insurance proceeds, except to the extent
relating to an Assumed Liability, under insurance policies of the
Sellers.
SECTION 2.02. Assumption and Exclusion of Liabilities. (a) On
the terms and subject to the conditions of this Agreement, the Purchaser shall,
on the Closing Date, assume and shall agree to pay, perform and discharge when
due the following Liabilities of Century WV (the "ASSUMED LIABILITIES"):
(i) all Liabilities relating to or arising from the operation
of the Rolling Business on or after the Closing Date, except as
otherwise provided in Article VI with respect to employee benefit
matters;
(ii) subject to clause (iii) below, all Liabilities relating
to or arising from the ownership or use of the Rolling Assets on or
after the Closing Date, including, without limitation, all Liabilities
under all claims, suits, actions, contracts, licenses, sublicenses,
agreements, leases, commitments, and sales and purchase orders, and
under all commitments, bids and offers;
(iii) all Liabilities relating to or arising out of Actions
brought against the Rolling Business associated with employment
actions, omissions or events, including, without limitation, employment
discrimination claims and claims for workplace related injuries by
employees which occurred or were incurred or accrued on or before the
Closing Date; provided that no such Liabilities (other than workers'
compensation claims) shall be assumed to the extent they (together with
all Liabilities relating to or arising out of Actions (other than
workers' compensation claims) brought against Century CP associated
with employment actions, omissions or events which were incurred or
accrued on or before the Closing Date) exceed $600,000, individually or
in the aggregate;
(iv) all Liabilities relating to or arising from the matters
set forth in Section 3.16(a) of the Disclosure Schedule (other than the
Excluded Liabilities as set forth in Section 2.02(b)(vi));
(v) subject to Section 2.02(a)(iii), all Liabilities relating
to or arising out of Actions brought against the Rolling Business
before, on or after the Closing Date; and
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(vi) all accrued liabilities of the Rolling Business to the
extent specifically reflected in the Closing Balance Sheet.
(b) Notwithstanding subsection (a) above, Century WV shall
retain responsibility for, and the Purchaser shall not assume or have any
responsibility for, all Liabilities of Century WV as of the Closing Date other
than the Assumed Liabilities (the "EXCLUDED LIABILITIES"), including, without
limitation:
(i) except to the extent accrued on the Closing Balance Sheet
in respect of the Rolling Business, all Taxes now or hereafter owed by
the Sellers or any Affiliate of the Sellers, or attributable to the
Rolling Assets or the Rolling Business, relating to any period, or any
portion of any period, ending on or prior to the Closing Date (as
provided in Section 7.01);
(ii) except as otherwise provided in Article VI, any
Liabilities for benefits, or under any of the Rolling Business' Plans;
(iii) all Liabilities relating to or arising out of the
Excluded Assets;
(iv) all Liabilities relating to or arising out of Actions
brought against the Rolling Business (other than workers' compensation
claims) associated with employment actions, omissions or events,
including, without limitation, employment discrimination claims, and
claims for workplace related injuries by employees which occurred or
were incurred or accrued on or before the Closing Date, but only to the
extent such Liabilities (together with all Liabilities relating to or
arising out of Actions (other than workers' compensation claims)
brought against Century CP associated with employment actions,
omissions or events which were incurred or accrued on or before the
Closing Date), individually or in the aggregate, exceed $600,000;
(v) all Liabilities in the nature of product liability claims
relating to or arising out of allegations of personal injury or
property damage suffered by any third party (A) on or prior to the
Closing Date or (B) attributable to products sold or shipped, or
Inventory purchased or manufactured, in each case in respect of the
conduct of the Rolling Business on or prior to the Closing Date;
(vi) all Liabilities under Environmental Laws relating to or
arising out of (A) Hazardous Material transported from the Ravenswood
Real Property pre-Closing; (B) any off-site migration of Hazardous
Material resulting from any pre-Closing off-site disposal or Release of
such Hazardous Material; (C) any off-site migration of Hazardous
Material from the Ravenswood Real Property resulting from any
pre-Closing disposal or Release at the Ravenswood Real Property, except
(I) in respect of matters set forth in Section 3.16(a) of the
Disclosure Schedule, if the Purchaser's actions or inactions are the
cause of such off-site migration or (II) in respect of any other
pre-Closing disposal or Release at the Ravenswood Real Property, if the
Purchaser's negligence is the cause of such off-site migration; and (D)
any on-site PCB contamination existing or occurring on
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or before the Closing at the Ravenswood Real Property, or any off-site
PCB contamination, whether existing or occurring before or after the
Closing, resulting from or arising out of operations at the Ravenswood
Real Property on or before the Closing, in each case requiring
investigation or remediation or other action under applicable
Environmental Law; it being understood that for purposes of this clause
2.02(b)(vi)(D), "Environmental Laws" include regulations adopted by the
State of West Virginia or a subdivision thereof after the Closing Date
pursuant to statutes enacted before the Closing Date;
(vii) all Liabilities in respect of the Oracle GEMMS software
and any claims in respect thereof; and
(viii) any Indebtedness (other than obligations under
equipment leases that have, or should have, been recorded as capital
leases) of the Rolling Business.
SECTION 2.03. Purchase and Sale of Shares. On the terms and
subject to the conditions of this Agreement, on the Closing Date, Century shall
sell to the Purchaser, and the Purchaser shall purchase from Century, all the
Shares. The sale and purchase of the Shares shall not be consummated unless the
sale and purchase of the Rolling Assets is consummated simultaneously, nor shall
the sale and purchase of the Rolling Assets be consummated unless the sale and
purchase of the Shares is consummated simultaneously.
SECTION 2.04. Purchase Price; Allocation of Purchase Price.
(a) Subject to the adjustments set forth in Sections 2.08 and 2.09, the purchase
price for the Rolling Assets and the Shares shall be U.S.$247,000,000, and the
purchase price for the covenants contained in Section 5.07 shall be
U.S.$1,000,000 (collectively, the "PURCHASE PRICE"). Within thirty (30) calendar
days following the date hereof, the Sellers and the Purchaser shall agree to
allocate between the Rolling Assets and the Shares, in accordance with the
respective fair market values of the Rolling Assets and the assets of Century
CP, the portion of the Purchase Price not allocated to the covenants contained
in Section 5.07. Under no circumstances, will the allocations between the
Rolling Assets and the Shares be inconsistent with the allocations set forth
under Section 7.07(b) of this Agreement.
(b) Within sixty (60) calendar days following the Closing, the
Purchaser shall prepare and deliver to the Sellers an allocation statement (the
"ALLOCATION STATEMENT"), setting forth the allocation of the Purchase Price
among the Rolling Assets and any related liability in accordance with Section
1060 of the Code. If, within 30 calendar days after the date of the Purchaser's
delivery of the Form 8594, the Sellers reasonably dispute one or more of the
computations and allocations reflected on the Form 8594, the Sellers will give
written notice to the Purchaser setting forth the computations and allocations
that the Sellers believe should be reflected on Form 8594, and the Sellers and
the Purchaser will attempt in good faith to promptly agree on a revised Form
8594. If the parties cannot resolve any such dispute within 30 Business Days of
the delivery by the Purchaser of the Form 8594 to the Sellers, the items
remaining in dispute shall be submitted to an independent accounting firm of
international reputation selected by, and mutually acceptable to, the Sellers
and the Purchaser. If the independent accounting firm so selected determines
that the allocation with respect to any item or items remaining in dispute
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is incorrect and that the Sellers would be materially adversely affected by the
incorrectness of such allocation, then the Sellers and the Purchaser shall be
bound by the allocation of such items as determined by the independent
accounting firm. Otherwise, the Purchaser and the Sellers shall be bound by the
allocation with respect to such item or items as prepared by the Purchaser. The
independent accounting firm shall make any such determination within 30 Business
Days after submission of the remaining disputed items. Any subsequent
adjustments to the Purchase Price shall be reflected in the Allocation Statement
as revised hereunder in a manner consistent with Treasury Regulation Section
1.1060 1T(f). For all Tax purposes, the Purchaser and the Sellers agree to
report the transactions contemplated in this Agreement in a manner consistent
with the terms of this Agreement, including the allocations under Section
2.04(a), and that none of them will take any position inconsistent therewith in
any Tax return, in any refund claim, in any litigation, or otherwise. Each of
the Sellers and the Purchaser agree to cooperate with each other in preparing
Form 8594 for filing by each and to furnish the other with a copy of such form
prepared in draft within a reasonable period before its filing due date, as well
as copies of such forms as filed.
SECTION 2.05. Closing. Subject to the terms and conditions of
this Agreement, the sale and purchase of the Assets and the assumption of the
Assumed Liabilities contemplated by this Agreement shall take place at a closing
(the "CLOSING") to be held at the offices of Shearman & Sterling, 599 Lexington
Avenue, New York, New York at 10:00 A.M. New York time on the later to occur of
(i) September 30, 1999 or (ii) the last Business Day of the month following the
fifth Business Day after the later to occur of the (A) expiration or termination
of all applicable waiting periods under the HSR Act and (B) satisfaction or
waiver of all other conditions to the obligations of the parties set forth in
Article VIII, or at such other place or at such other time or on such other date
as the Sellers and the Purchaser may mutually agree upon in writing (the day on
which the Closing takes place being the "CLOSING DATE").
SECTION 2.06. Closing Deliveries by the Sellers. At the
Closing, the Sellers shall deliver or cause to be delivered to the Purchaser:
(a) the Bill of Sale, the Deed and such other instruments, in
form and substance reasonably satisfactory to the Purchaser, as may be
requested by the Purchaser to transfer the Rolling Assets to the
Purchaser or evidence such transfer on the public records;
(b) stock certificates evidencing the Shares duly endorsed in
blank, or accompanied by stock powers duly executed in blank, in form
reasonably satisfactory to the Purchaser and with all required stock
transfer tax stamps affixed;
(c) executed counterparts of the Assumption Agreement, the
Molten Aluminum Purchase Agreement, the Shared Services Agreement, the
Management Services Agreement, the Vernon Indemnity Agreement and the
Ravenswood Indemnity Agreement;
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(d) a receipt for the Purchase Price; and
(e) the certificates, deliveries and other documents required
to be delivered pursuant to Section 8.02.
SECTION 2.07. Closing Deliveries by the Purchaser. At the
Closing, the Purchaser shall deliver to the Sellers:
(a) the Purchase Price by wire transfer in immediately
available funds to an account or accounts designated at least three
Business Days prior to the Closing Date by the Sellers in a written
notice to the Purchaser;
(b) executed counterparts of the Assumption Agreement, the
Molten Aluminum Purchase Agreement, the Shared Services Agreement, the
Management Services Agreement, the Vernon Indemnity Agreement and the
Ravenswood Indemnity Agreement; and
(c) the certificates, deliveries and other documents required
to be delivered pursuant to Section 8.01.
SECTION 2.08. Pre-Closing Adjustment of Purchase Price. (a) On
or around the tenth Business Day preceding the Closing Date, the Sellers shall
in good faith estimate the Net Working Capital as of the last calendar day of
the immediately preceding month (the "SELLERS ESTIMATED NET WORKING CAPITAL")
and deliver to the Purchaser in accordance with Section 11.02 a notice
specifying the Sellers Estimated Net Working Capital and the basis, in
reasonable detail, for such calculation. The Purchaser shall have three Business
Days to review the Sellers Estimated Net Working Capital during which time the
Sellers shall in good faith assist the Purchaser in such review. After such
three Business Day review period shall have terminated, either (i) the parties
shall have, acting in good faith, mutually agreed an estimate of the Net Working
Capital as of the last calendar day of the immediately preceding month (the
"AGREED ESTIMATED NET WORKING CAPITAL") or (ii) the Sellers, on the one hand,
and the Purchaser, on the other hand, shall have, acting in good faith, each
determined an estimate of the Net Working Capital as of the last calendar day of
the immediately preceding month (the determination closest to the Net Working
Capital reflected on the Reference Balance Sheet being hereinafter referred to
as the "DEFAULT ESTIMATED NET WORKING CAPITAL").
(b) Following determination of the Agreed Estimated Net
Working Capital or the Default Estimated Net Working Capital, as the case may
be, the Purchase Price shall be adjusted as follows:
(i) in the event that the Agreed Estimated Net Working Capital
or the Default Estimated Net Working Capital, as the case may be,
exceeds the Net Working Capital reflected on the Reference Balance
Sheet, then the Purchase Price shall be adjusted
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upward by an amount equal to 50% of such excess (the "ADJUSTED
PRE-CLOSING NWC INCREASE"); and
(ii) in the event that the Agreed Estimated Net Working
Capital or the Default Estimated Net Working Capital, as the case may
be, is less than the Net Working Capital reflected on the Reference
Balance Sheet, then the Purchase Price shall be adjusted downward by an
amount equal to 50% of such shortfall (the "ADJUSTED PRE-CLOSING NWC
DECREASE").
SECTION 2.09. Post-Closing Adjustment of Purchase Price. The
Purchase Price shall be subject to adjustment after the Closing as specified in
this Section 2.09:
(a) Closing Balance Sheet. As promptly as practicable, but in
any event within 90 calendar days following the Closing Date, the
Purchaser shall deliver to the Sellers the Closing Balance Sheet,
together with a certificate of the Purchaser thereon that the Closing
Balance Sheet was prepared on a basis consistent with the preparation
of the Reference Balance Sheet.
(b) Disputes. (i) Subject to clause (ii) of this Section
2.09(b), the Closing Balance Sheet delivered by the Purchaser to the
Sellers shall be deemed to be and shall be final, binding and
conclusive on the parties hereto.
(ii) The Sellers may dispute any amounts reflected on the
Closing Balance Sheet to the extent the net effect of such disputed
amounts in the aggregate would affect the Net Working Capital reflected
on the Closing Balance Sheet by more than the Designated Amount, but
only on the basis that the amounts reflected on the Closing Balance
Sheet were not prepared in accordance with the same U.S. GAAP, applied
on a basis consistent with the preparation of the Reference Balance
Sheet; provided, however, that the Sellers shall have notified the
Purchaser in writing of each disputed item, specifying the amount
thereof in dispute and setting forth, in reasonable detail, the basis
for such dispute, within 30 Business Days of the Purchaser's delivery
of the Closing Balance Sheet to the Sellers. In the event of such a
dispute, the Sellers' Accountants and the Purchaser's Accountants shall
attempt to reconcile their differences, and any resolution by them as
to any disputed amounts shall be final, binding and conclusive on the
parties hereto. If any such resolution by the Purchaser's Accountants
and the Sellers' Accountants leaves in dispute amounts the net effect
of which in the aggregate would not affect the Net Working Capital
reflected on the Closing Balance Sheet by more than the Designated
Amount, all such amounts remaining in dispute shall then be deemed to
have been resolved in favor of the Closing Balance Sheet delivered by
the Purchaser to the Sellers. If the Sellers' Accountants and the
Purchaser's Accountants are unable to reach a resolution with such
effect within 20 Business Days after receipt by the Purchaser of the
Sellers' written notice of dispute, the Sellers' Accountants and the
Purchaser's Accountants shall submit the items remaining in dispute for
resolution to an independent accounting firm of international
reputation mutually acceptable to the Purchaser and the
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Sellers (the "INDEPENDENT ACCOUNTING FIRM"), which shall, within 60
Business Days after such submission, determine and report to the
Purchaser and the Sellers upon such remaining disputed items, and such
report shall be final, binding and conclusive on the Sellers and the
Purchaser. The fees and disbursements of the Independent Accounting
Firm shall be allocated between the Sellers and the Purchaser in the
same proportion that the aggregate amount of such remaining disputed
items so submitted to the Independent Accounting Firm that is
unsuccessfully disputed by each such party (as finally determined by
the Independent Accounting Firm) bears to the total amount of such
remaining disputed items so submitted.
(iii) In acting under this Agreement, the Purchaser's
Accountants, the Sellers' Accountants and the Independent Accounting
Firm shall be entitled to the privileges and immunities of arbitrators.
(iv) No adjustment to the Purchase Price pursuant to Section
2.09(c) shall be made with respect to amounts disputed by the Sellers
pursuant to this Section 2.09(b), unless the net effect of the amounts
successfully disputed by the Sellers in the aggregate is to increase
the Net Working Capital reflected on the Closing Balance Sheet by at
least the Designated Amount.
(c) Purchase Price Adjustment. The Closing Balance Sheet shall
be deemed final for the purposes of this Section 2.09 upon the earlier
of (A) the failure of the Sellers to notify the Purchaser of a dispute
within 30 Business Days of the Purchaser's delivery of the Closing
Balance Sheet to the Sellers, (B) the resolution of all disputes,
pursuant to Section 2.09(b)(ii), by the Purchaser's Accountants and the
Sellers' Accountants and (C) the resolution of all disputes, pursuant
to Section 2.09(b)(ii), by the Independent Accounting Firm. Subject to
the limitation set forth in Section 2.09(b)(iv), within three Business
Days of the Closing Balance Sheet being deemed final, a Purchase Price
adjustment shall be made as follows:
(i) In the event that the Adjusted Reference Net
Working Capital exceeds the Net Working Capital reflected on
the Closing Balance Sheet by at least the Designated Amount,
then the Purchase Price shall be adjusted downward in an
amount equal to the full amount by which the Adjusted
Reference Net Working Capital exceeds the Net Working Capital
shown on the Closing Balance Sheet, the Purchaser shall
deliver written notice to the Sellers specifying the amount of
such downward adjustment of the Purchase Price, and the
Sellers shall, within three Business Days of their receipt of
such notice, pay such amount to the Purchaser in immediately
available funds.
(ii) In the event that the Net Working Capital
reflected on the Closing Balance Sheet exceeds the Adjusted
Reference Net Working Capital by at least the Designated
Amount, then the Purchase Price shall be adjusted upward in an
amount equal to the full amount by which the Net Working
Capital shown on
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the Closing Balance Sheet exceeds the Adjusted Reference Net
Working Capital and the Purchaser shall, within three Business
Days of such determination, pay the amount of such excess to
the Sellers by wire transfer in immediately available funds.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SELLERS
As an inducement to the Purchaser to enter into this
Agreement, the Sellers hereby represent and warrant, jointly and severally, to
the Purchaser as follows:
SECTION 3.01. Organization, Authority and Qualification of the
Sellers. Each of the Sellers is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has all
necessary power and authority to enter into this Agreement and the Ancillary
Agreements to which it is a party, to carry out its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
Each of the Sellers is duly licensed or qualified to do business and is in good
standing in each jurisdiction in which the properties owned or leased by it or
the operation of its business makes such licensing or qualification necessary,
except to the extent that the failure to be so licensed or qualified would not
adversely affect (i) the ability of such Seller to carry out its obligations
under, and to consummate the transactions contemplated by, this Agreement and
the Ancillary Agreements to which it is a party and (ii) the ability of the
Sellers and the Subsidiaries to conduct the Business in any material respect.
The execution and delivery by each of the Sellers of this Agreement and the
Ancillary Agreements to which it is a party, the performance by each of the
Sellers of its obligations hereunder and thereunder and the consummation by each
of the Sellers of the transactions contemplated hereby and thereby have been
duly authorized by all requisite action on the part of each of the Sellers. This
Agreement has been, and upon their execution the Ancillary Agreements will be,
duly executed and delivered by each of the Sellers that is a party thereto, and
(assuming due authorization, execution and delivery by the Purchaser) this
Agreement constitutes, and upon their execution the Ancillary Agreements to
which each Seller is a party will constitute, legal, valid and binding
obligations of such Seller enforceable against such Seller in accordance with
their respective terms.
SECTION 3.02. Capital Stock and Ownership. (a) Century owns
all of the authorized, issued and outstanding shares of capital stock of Century
WV (the "CENTURY WV SHARES") free and clear of all Encumbrances. There are no
options, warrants, convertible securities or other rights, agreements,
arrangements or commitments of any character relating to the capital stock of
Century WV or obligating either Century WV or Century to issue or sell any
shares of capital stock of, or other interest in, Century WV.
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(b) The Shares constitute all the authorized, issued and
outstanding shares of capital stock of Century CP. The Shares have been duly
authorized and validly issued and are fully paid and nonassessable. None of the
issued and outstanding shares of Common Stock was issued in violation of any
preemptive rights. There are no options, warrants, convertible securities or
other rights, agreements, arrangements or commitments of any character relating
to the capital stock of Century CP or obligating either Century CP or Century to
issue or sell any shares of capital stock of, or other interest in, Century CP.
There are no outstanding contractual obligations of Century CP to repurchase,
redeem or otherwise acquire any shares of Common Stock or to provide funds to,
or make any investment (in the form of a loan, capital contribution or
otherwise) in, any other Person. The Shares are owned of record and beneficially
by Century free and clear of all Encumbrances. Upon consummation of the
transactions contemplated by this Agreement, the Purchaser will own all the
issued and outstanding capital stock of Century CP, free and clear of all
Encumbrances, and the Shares will be fully paid and nonassessable. There are no
voting trusts, stockholder agreements, proxies or other agreements or
understandings in effect with respect to the voting or transfer of any of the
Shares.
SECTION 3.03. Subsidiaries. (a) Century CP owns, whether of
record or beneficially, no direct or indirect equity or other interest in any
corporation, partnership, joint venture, association or other entity or any
right (contingent or otherwise) to acquire the same. Century CP is not a member
of (nor is any part of the Business conducted through) any partnership, nor is
Century CP a participant in any joint venture or similar arrangement.
(b) Century CP: (i) is a corporation duly organized and
validly existing under the laws of its jurisdiction of incorporation, (ii) has
all necessary power and authority to own, operate or lease the properties and
assets owned, operated or leased by it and to carry on its business as it has
been and is currently conducted and (iii) is in all material respects duly
licensed or qualified to do business and is in good standing in each
jurisdiction in which the properties owned or leased by it or the operation of
its business makes such licensing or qualification necessary or desirable.
(c) All material corporate actions taken by Century CP have
been duly authorized and it has taken no material action that conflicts with,
constitutes a default under or results in a violation of any provision of its
charter or By-laws (or similar organizational documents). True and complete
copies of the charter and By-laws (or similar organizational documents), in each
case as in effect on the date hereof, of Century CP have been delivered by the
Sellers to the Purchaser.
SECTION 3.04. Books and Records. The minute books of Century
CP contain in all material respects accurate records of all meetings and
accurately reflect in all material respects all other actions taken by the
stockholders, Board of Directors and all committees of the Board of Directors of
Century CP. Complete and accurate copies of all such minute books of Century CP
and of the stock register of Century CP have been provided by the Sellers to the
Purchaser. Complete and accurate copies of all minute books of meetings held
since January 1, 1996 of the stockholders, Boards of Directors, and all
committees thereof, of the Sellers, which
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contain references to matters material, or which with the passage of time could
reasonably be expected to become material, to the Business, have been provided
by the Sellers to the Purchaser (but only to the extent of discussions of such
matters).
SECTION 3.05. No Conflict. Except as may result from any facts
or circumstances relating solely to the Purchaser or as described in Section
3.06, the execution, delivery and performance by each of the Sellers of this
Agreement and the Ancillary Agreements to which it is a party do not and will
not (a) violate, conflict with or result in the breach of any provision of the
charter or By-laws (or similar organizational documents) of any of the Sellers
or Century CP, (b) materially conflict with or violate (or cause an event which
would be reasonably likely to have a Material Adverse Effect as a result of) any
Law or Governmental Order applicable to any of the Sellers, Century CP or any of
their respective assets, properties or businesses or (c) except as set forth in
Section 3.05(c) of the Disclosure Schedule or as would not be reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect, conflict
with, result in any breach of, constitute a default (or event which with the
giving of notice or lapse of time, or both, would become a default) under,
require any consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation or cancellation of, or result in
the creation of any Encumbrance on any of the Rolling Assets or the assets or
properties of Century CP pursuant to, any note, bond, mortgage or indenture,
contract, agreement, lease, sublease, license, permit, franchise or other
instrument or arrangement to which any of the Sellers or Century CP is a party
or by which any of such assets or properties is bound or affected.
SECTION 3.06. Governmental Consents and Approvals. The
execution, delivery and performance by each of the Sellers of this Agreement and
each Ancillary Agreement to which it is a party does not and will not require
any consent, approval, authorization or other order of, action by, filing with
or notification to, any Governmental Authority, except (a) as described in
Section 3.06 of the Disclosure Schedule and (b) the requirements of the HSR Act.
SECTION 3.07. Financial Information; Books and Records. (a)
True and complete copies of the Reference Balance Sheet and the related
statement of operations of the Business (collectively referred to herein as the
"FINANCIAL STATEMENTS") have been delivered by the Sellers to the Purchaser.
Except as set forth in Section 3.07(a) of the Disclosure Schedule, the Financial
Statements (i) were prepared in all material respects from the books of account
and other financial records of the Sellers and Century CP, (ii) present fairly
in all material respects the financial condition and results of operations of
the Business as of the dates thereof or for the periods covered thereby and
(iii) have been prepared in accordance with the same U.S. GAAP as applied in the
preparation of the consolidated financial statements of Century as of, and for
the year ended, December 31, 1998.
(b) The books of account and other financial records of the
Sellers and Century CP for fiscal years 1997, 1998 and 1999 and, in the case of
Century CP, since its formation in December 1998: (i) fairly present in all
material respects all items of income and expense and all assets and Liabilities
required to be reflected therein in accordance with U.S.
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GAAP applied on a basis consistent with the past practices of the Sellers, and
throughout the periods involved, (ii) are in all material respects complete and
do not contain or reflect any material inaccuracies or discrepancies and (iii)
have been maintained in all material respects in accordance with good business
and accounting practices.
SECTION 3.08. No Undisclosed Liabilities. There are no
Liabilities of the Business, other than Liabilities (i) reflected or reserved
against on the Reference Balance Sheet, (ii) disclosed in Section 3.08 of the
Disclosure Schedule (or as otherwise disclosed in the Disclosure Schedule if the
relevance to this Section 3.08 is reasonably apparent from the facts specified
in such disclosure), (iii) incurred since the date of this Agreement in the
ordinary course of business, consistent with past practice, of the Business and
which do not and would not be reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect or (iv) of a kind and type that would not
be required to be disclosed in a financial statement prepared in accordance with
U.S. GAAP and which do not and would not be reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect. Reserves are
reflected on the Reference Balance Sheet against all Liabilities of the Business
as of the date thereof, other than Liabilities relating to the Excluded
Liabilities, in amounts that have been established on a basis consistent with
the past practices of the Sellers and in accordance with U.S.
GAAP.
SECTION 3.09. Receivables. Section 3.09 of the Disclosure
Schedule is an aged list of the Receivables as of the Reference Balance Sheet
Date showing separately those Receivables that as of such date had been
outstanding (i) for less than the due date, (ii) 1 to 15 days past due, (iii) 16
to 30 days past due, (iv) 31 to 60 days past due and (v) over 60 days past due.
Except to the extent, if any, reserved for on the Reference Balance Sheet, all
Receivables reflected on the Reference Balance Sheet arose in all material
respects from, and the Receivables existing on the Closing Date will have arisen
in all material respects from, the sale of Inventory or services to Persons in
the ordinary course of the Business consistent with past practice and, except as
reserved against on the Reference Balance Sheet, constitute or will constitute
in all material respects, as the case may be, only valid, undisputed claims of
the Business not subject to valid claims of set-off or other defenses or
counterclaims other than normal cash discounts accrued in the ordinary course of
the Business consistent with past practice. All Receivables reflected on the
Reference Balance Sheet or arising from the date thereof until the Closing are,
or will be, reserved for in accordance with the same U.S. GAAP as applied in the
preparation of the consolidated financial statements of Century as of and for
the year ended, December 31, 1998.
SECTION 3.10. Inventories. (a) Subject to amounts reserved
therefor on the Reference Balance Sheet, the values at which all Inventories are
carried on the Reference Balance Sheet reflect the historical inventory
valuation policy of Century WV and Century CP of stating such Inventories at the
lower of cost (determined principally on the last-in, first-out method) or
market value. Except as set forth in Section 3.10 of the Disclosure Schedule and
for Encumbrances described in clause (b) of the definition of "Permitted
Encumbrances", the Business has good and marketable title to the Inventories
free and clear of all Encumbrances. The Inventories do not consist of any items
held on consignment. The Business is not under any obligation or liability with
respect to accepting returns of items of Inventory or merchandise in
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the possession of its customers other than in the ordinary course of the
Business consistent with past practice. No clearance or extraordinary sale of
the Inventories has been conducted since the Reference Balance Sheet Date. The
Business has not acquired or committed to acquire or manufactured Inventory for
sale which is not of a quality and quantity usable in the ordinary course of the
Business within a reasonable period of time and consistent with past practice
nor has the Business changed the price of any Inventory except for (i) price
reductions to reflect any reduction in the cost thereof to the Business, (ii)
reductions and increases responsive to normal competitive conditions and
consistent with the Business' past sales practices, (iii) increases to reflect
any increase in the cost thereof to the Business and (iv) increases and
reductions made with the written consent of the Purchaser. Section 3.10 of the
Disclosure Schedule contains a complete list of the addresses of all warehouses
and other facilities in which the Inventories are located.
(b) The Inventories are in all material respects in a
condition such that they can be sold in the ordinary course of the Business
consistent with past practice. All Inventories reflected in the Reference
Balance Sheet or arising from the date hereof until the Closing are, or will be,
recorded in accordance with the same U.S. GAAP as applied in the preparation of
the consolidated financial statements of Century as of and for the year ended,
December 31, 1998.
SECTION 3.11. Public Filings. None of Century WV or the
Subsidiaries is required to file any forms, reports or other documents with the
SEC.
SECTION 3.12. Sales and Purchase Order Backlog. (a) As of the
Reference Balance Sheet Date, open sales orders accepted by the Business totaled
approximately $117,000,000, and, as of a date not more than ten days prior to
the date hereof, open sales orders accepted by the Business totaled
approximately $126,000,000. Section 3.12(a) of the Disclosure Schedule lists all
sales orders exceeding $100,000 per order, which have been accepted by the
Business, and which were open either as of the Reference Balance Sheet Date or
as of such date not more than ten days prior to the date hereof.
(b) As of the Reference Balance Sheet Date, open purchase
orders issued by the Business totaled approximately $17,000,000, and, as of the
date referred to in Section 3.12(a) not more than ten days prior to the date
hereof, open purchase orders issued by the Business totaled approximately
$15,000,000. Section 3.12(b) of the Disclosure Schedule lists all purchase
orders exceeding $100,000 per order, which have been issued by the Business, and
which were open either as of the Reference Balance Sheet Date or as of such date
not more than ten days prior to the date hereof.
SECTION 3.13. Conduct in the Ordinary Course; Absence of
Certain Changes, Events and Conditions. Since the Reference Balance Sheet Date,
except as disclosed in Section 3.13 of the Disclosure Schedule, the Business has
been conducted in the ordinary course and consistent with past practice. As
amplification and not limitation of the foregoing, except as disclosed in
Section 3.13 of the Disclosure Schedule and except as would not, individually or
in
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the aggregate, be reasonably likely to have a Material Adverse Effect, since the
Reference Balance Sheet Date, none of the Sellers or Century CP has:
(a) permitted or allowed any of the assets or properties
(whether tangible or intangible) of the Business to be subjected to any
Encumbrance, other than Permitted Encumbrances and Encumbrances that
will be released at or prior to the Closing;
(b) except in the ordinary course of the Business consistent
with past practice, discharged or otherwise obtained the release of any
Encumbrance relating to the Business or paid or otherwise discharged
any Liability of the Business, other than current liabilities reflected
on the Reference Balance Sheet and current liabilities incurred in the
ordinary course of the Business consistent with past practice since the
date of the Reference Balance Sheet;
(c) written down or written up (or failed to write down or
write up) the value of any Inventories or Receivables or revalued any
assets of the Business other than in the ordinary course of the
Business consistent with past practice and in accordance with the same
U.S. GAAP as applied in the preparation of the consolidated financial
statements of Century as of and for the year ended, December 31, 1998;
(d) made any change in any method of accounting or accounting
practice or policy related to the Business, other than such changes
required by U.S. GAAP;
(e) amended, terminated, canceled or compromised any material
claims of the Business or waived any other rights of substantial value
to the Business;
(f) sold, transferred, leased, subleased, licensed or
otherwise disposed of any properties or assets, real, personal or mixed
(including, without limitation, leasehold interests and intangible
property), other than in the ordinary course of the Business consistent
with past practice;
(g) issued or sold any capital stock, notes, bonds or other
securities, or any option, warrant or other right to acquire the same,
of Century CP;
(h) redeemed any of the capital stock of Century CP or
declared, made or paid any dividends or distributions (whether in cash,
securities or other property) to the holders of Century CP's capital
stock;
(i) in relation to Century CP or the Business, merged with,
entered into a consolidation with or acquired an interest of 5% or more
in any Person or acquired a substantial portion of the assets or
business of any Person or any division or line of business thereof, or
otherwise acquired any material assets other than in the ordinary
course of the Business consistent with past practice;
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(j) made any commitment for any capital expenditure in respect
of the Business that will not be expended as of the Closing Date in
excess of $1,000,000 in the aggregate;
(k) made any material changes in the customary methods of
operations of the Business, including, without limitation, practices
and policies relating to manufacturing, purchasing, marketing, selling
and pricing;
(l) made any express or deemed election or settled or
compromised any liability, with respect to Taxes of the Business;
(m) in the case of Century CP, incurred any Indebtedness
which will not be repaid in full prior to Closing, except for
obligations under letters of credit or in respect of bonds posted in
the ordinary course of business consistent with past practice;
(n) in the case of Century CP, made any loan to, guaranteed
any Indebtedness of or otherwise incurred any Indebtedness on behalf of
any Person;
(o) failed in any material respect to pay any creditor any
amount owed to such creditor when due;
(p) (A) established or increased or promised to increase the
benefits under any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards or other restricted stock awards), stock purchase or
other employee benefit plan or otherwise increased or promised to
increase the compensation payable or to become payable to any
directors, officers or employees of the Business, or (B) paid any
benefit not required by any plan or agreement as in effect as of the
date hereof; in either case except as required by Law or any collective
bargaining agreement or involving ordinary increases consistent with
the past practice of the Business;
(q) entered into any employment or severance agreement with
any of the employees of the Business;
(r) terminated, discontinued, closed or disposed of any
plant, material facility or other material business operation, or laid
off any employees (other than layoffs in the ordinary course of the
Business consistent with past practice) or implemented any early
retirement, separation or program providing early retirement window
benefits within the meaning of Section 1.401(a)-4 of the Regulations or
announced or planned any such action or program for the future;
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(s) entered into any collective bargaining agreement or
contract with the labor union or collective bargaining representative
without the prior written consent of the Purchaser (other than the New
Collective Bargaining Agreement);
(t) disclosed any material secret or confidential
Intellectual Property (except by way of issuance of a patent) or
permitted to lapse or go abandoned any material Intellectual Property
(or any registration or grant thereof or any application relating
thereto) to which, or under which, the Business has any right, title,
interest or license;
(u) allowed any Material License or material Environmental
Permit that was issued or relates to the Business to lapse or
terminate;
(v) failed to maintain the Business' plants, property and
equipment in good repair and operating condition, as compared to the
condition thereof as of the Reference Balance Sheet Date, ordinary wear
and tear excepted;
(w) suffered any casualty loss or damage with respect to any
of the Rolling Assets or Century CP's properties or assets which in the
aggregate have a replacement cost of more than $500,000, whether or not
such losses or damages shall have been covered by insurance;
(x) amended or restated the charter or By-laws (or other
organizational documents) of Century CP;
(y) suffered any Material Adverse Effect;
(z) entered into any contract or agreement in respect of the
Business (i) between or among the Sellers or any Affiliate of the
Sellers or (ii) with Glencore International AG or any of its
Affiliates;
(aa) (i) amended any policy of the Business relating to the
payment of accounts payable or accounts receivable; (ii) cancelled, or
modified the terms and conditions of payment of, any amounts due the
Business in respect of accounts receivable; or (iii) accelerated, or
modified the terms and conditions of payment of, any amounts payable by
the Business in respect of accounts payable; except in the case of
clauses (i) or (ii), in the ordinary course of business consistent with
past practice; or
(bb) agreed, whether in writing or otherwise, to take any of
the actions specified in this Section 3.13 or granted any options to
purchase, rights of first refusal, rights of first offer or any other
similar rights with respect to any of the actions specified in this
Section 3.13, except as expressly contemplated by this Agreement and
the Ancillary Agreements.
SECTION 3.14. Litigation. Except as set forth in Section 3.14
of the Disclosure Schedule, there are no material Actions by or against the
Business, or affecting any of the
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properties or assets of the Business, including, without limitation, the Assets,
pending before any Governmental Authority (or, to the knowledge of the Sellers,
threatened to be brought by or before any Governmental Authority), provided that
for purposes hereof an Action shall not be deemed material if the sole damages
are monetary and the monetary Liability is less than $250,000. None of the
matters disclosed in Section 3.14 of the Disclosure Schedule, individually or in
the aggregate, has had or would be reasonably likely to have a Material Adverse
Effect or could adversely affect the legality, validity or enforceability of
this Agreement, any Ancillary Agreement or the consummation of the transactions
contemplated hereby or thereby.
SECTION 3.15. Compliance with Laws. Except as set forth in
Section 3.15 of the Disclosure Schedule and except for environmental matters,
real property matters, employee, compensation and benefit matters, labor matters
and tax matters, as to which the provisions of Sections 3.16, 3.19, 3.22, 3.23
and 3.25, respectively, shall apply, the Sellers have conducted and continue to
conduct the Business in all material respects in accordance with all Laws and
Governmental Orders applicable to the Business or any of the properties or
assets of the Business, including, without limitation, the Assets, and the
Business is not in violation of any such Law or Governmental Order in any
material respect.
SECTION 3.16. Environmental Matters. (a) Except as disclosed
in Section 3.16(a) of the Disclosure Schedule:
(i) Each of the Sellers and Century CP is in material
compliance with all applicable Environmental Laws and all Environmental
Permits related to the Business or the Real Property. All noncompliance
with Environmental Laws or Environmental Permits in respect of the
Business in the last three years has been resolved without any material
pending, ongoing or future obligation, cost or liability.
(ii) There are no underground or aboveground storage tanks or
any surface impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being or have been treated, stored or disposed
on any of the Real Property, except where the existence thereof would
not be reasonably likely to result in any material Liability.
(iii) None of the Sellers or Century CP has, and to the
knowledge of the Sellers, no other Person has, Released Hazardous
Materials on any of the Real Property in a manner that would be
reasonably likely to result in material Liability.
(iv) None of the Sellers or Century CP is conducting, or has
undertaken or completed, any Remedial Action relating to any Release or
threatened Release at the Real Property currently or formerly owned or
operated by the Sellers or Century CP or at any other off-site location
in respect of the Business, either voluntarily or pursuant to the order
of any Governmental Authority or the requirements of any Environmental
Law or Environmental Permit.
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(v) There is no asbestos or asbestos-containing material on
any of the Real Property.
(vi) To the knowledge of the Sellers, none of the Real
Property is listed or has been proposed for listing on the National
Priorities List or the Comprehensive Environmental Response,
Compensation and Liability Information System under the federal
Comprehensive Environmental Response, Compensation, and Liability Act
or any analogous federal, state or local list.
(vii) There are no material Environmental Claims pending or,
to the knowledge of the Sellers, threatened against (a) any of the
Sellers or Century CP relating to the Business, (b) the Business or (c)
the Real Property, and to the knowledge of the Sellers, there are no
circumstances that can reasonably be expected to form the basis of any
such Environmental Claim in respect of the Business, including without
limitation with respect to any off-site disposal location presently or
formerly used by any of the Sellers or Century CP or any of their
predecessors or with respect to any previously owned or operated
facilities.
(viii) There are no wetlands or any areas subject to any legal
requirement or restriction in any way related to wetlands (including,
without limitation, requirements or restrictions related to buffer or
transition areas or open waters) at or affecting the Real Property.
(b) The Sellers have provided the Purchaser the opportunity to
review copies of any environmental assessment or audit reports or other material
studies or analyses in their possession relating to the Business or the Real
Property (excluding routine in-house reporting, monitoring and correspondence).
(c) Except as disclosed in Section 3.16(c) of the Disclosure
Schedule, and for notices, petitions and filings as may be required for the
transfer of Environmental Permits to the Purchaser or, if such transfer is not
permitted under applicable Law, for the Purchaser to obtain such Permits,
neither the execution of this Agreement nor the consummation of the transactions
contemplated herein will require any Remedial Action or notice to or consent of
Governmental Authorities or third parties pursuant to any applicable
Environmental Law or Environmental Permit.
(d) For avoidance of doubt, the Sellers shall, in respect of
the Ravenswood Real Property, retain, and in respect of the Vernon Owned Real
Property, hold the Purchaser harmless for, all Liabilities relating to or
arising from (i) Hazardous Material transported from the Real Property
pre-Closing; (ii) any off-site migration of Hazardous Material resulting from
any pre-Closing off-site disposal or Release of such Hazardous Material; (iii)
any off-site migration of Hazardous Material from the Real Property resulting
from any pre-Closing disposal or Release at the Real Property, except (I) in
respect of matters set forth in Section 3.16(a) of the Disclosure Schedule, if
the Purchaser's actions or inactions are the cause of such off-site
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migration or (II) in respect of any other pre-Closing disposal or Release at the
Real Property, if the Purchaser's negligence is the cause of such off-site
migration; and (iv) any on-site PCB contamination existing or occurring on or
before the Closing at the Real Property, or any off-site PCB contamination,
whether existing or occurring before or after the Closing, resulting from or
arising out of operations at the Real Property on or before the Closing, in each
case requiring investigation or remediation or other action under applicable
Environmental Law; it being understood that for purposes of this clause
3.16(d)(iv), "Environmental Laws" include regulations adopted by the State of
West Virginia or the State of California, as the case may be, or a subdivision
thereof, after the Closing Date pursuant to statutes enacted before the Closing
Date.
(e) For avoidance of doubt, notwithstanding anything to the
contrary contained in Section 3.16(a) of the Disclosure Schedule, the Purchaser
shall also be indemnified for environmental matters to the extent provided in
the Ravenswood Indemnity Agreement and the Vernon Indemnity Agreement.
(f) Section 3.16(f) of the Disclosure Schedule lists all
Environmental Permits used or held in the conduct of the Business.
(g) Except as disclosed in Section 3.16(g) of the Disclosure
Schedule, to the knowledge of the Sellers, no PCBs have been Released at, on or
beneath any of the Real Property or are migrating to or from any of the Real
Property; it being understood, for avoidance of doubt, that the requirement of
disclosure under this Section 3.16(g) is not intended to alter the allocation of
liability with respect to PCBs as otherwise provided for in this Agreement.
SECTION 3.17. Material Contracts. (a) Section 3.17(a) of the
Disclosure Schedule lists each of the following contracts and agreements
(including, without limitation, oral and informal arrangements) of the Sellers
or Century CP in respect of the Business (such contracts and agreements,
together with all contracts, agreements, leases and subleases concerning the
management or operation of any Real Property (including, without limitation,
brokerage contracts) listed or otherwise disclosed in Section 3.19(a) or 3.19(b)
of the Disclosure Schedule to which any Seller or Century CP is a party and all
agreements relating to Intellectual Property set forth in Section 3.18(a) of the
Disclosure Schedule, being "MATERIAL CONTRACTS"):
(i) each contract, agreement, invoice, purchase order and
other arrangement, for the purchase of Inventory, spare parts, other
materials or personal property with any supplier or for the furnishing
of services to the Business under the terms of which the Business is
likely to pay or otherwise give consideration of more than $500,000 in
the aggregate over the remaining term of such contract;
(ii) each contract, agreement, invoice, sales order and other
arrangement, for the sale of Inventory or other personal property or
for the furnishing of services by the Business which is likely to
involve consideration of more than $500,000 in the aggregate over the
remaining term of such contract;
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(iii) all material broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion contracts and
agreements, and all material market research, marketing consulting and
advertising contracts and agreements;
(iv) all material contracts and agreements in respect of the
Business with any Governmental Authority;
(v) all employment, termination, severance or consulting
contracts or agreements with a current employee or former employee or
current or former director of or consultant of the Business that is not
terminable at will by the employer;
(vi) all collective bargaining agreements or contracts
relating to the Business with any labor union;
(vii) all contracts and agreements that limit the ability of
the Business to compete in any line of business or with any Person or
in any geographic area or during any period of time;
(viii) all contracts, agreements, hedges and other
arrangements in respect of the Business (A) between or among the
Sellers or any Affiliate of the Sellers, (B) with Glencore
International AG or any of its Affiliates or (C) relating to and
between the Business and the Reduction Facility;
(ix) all contracts and agreements for the provision of
utilities (including, without limitation, electricity, gas and
conversion services) to the Business;
(x) all contracts and agreements with Kaiser Aluminum &
Chemical Corporation ("KAISER") or Aluminum Company of America
("ALCOA") or any of their Affiliates pursuant to which Kaiser or Alcoa
has agreed to indemnify the Sellers or Century CP in respect of the
Business, pursuant to which the Business may be liable to Kaiser or
Alcoa or pursuant to which Kaiser or Alcoa would have Liabilities owing
to the Business;
(xi) all contracts and agreements related to the provision of
services pursuant to any employee health or welfare benefit plans; and
(xii) all other contracts and agreements, whether or not made
in the ordinary course of the Business, the absence of which,
individually or in the aggregate, would be reasonably likely to have a
Material Adverse Effect.
For purposes of this Section 3.17 and Sections 3.19 and 3.20, the term "LEASE"
shall include any and all leases, subleases, sale/leaseback agreements or
similar arrangements.
(b) Except as disclosed in Section 3.17(b) of the Disclosure
Schedule, each Material Contract s valid and binding on the Sellers and/or
Century CP, as the case may be, and is in all material respects in full force
and effect. None of the Sellers or Century CP is in any
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material respect in breach of, or default under, any Material Contract. The
failure to obtain any consents or waivers in respect of the Material Contracts
in connection with the execution, delivery and consummation of this Agreement
will not, individually or in the aggregate, have a Material Adverse Effect.
(c) Except as disclosed in Section 3.17(c) of the Disclosure
Schedule, to the knowledge of the Sellers, no other party to any Material
Contract is in any material respect in breach thereof or default thereunder.
(d) Alcoa and its Affiliates have fully performed all their
obligations under the Transition Services Agreement dated as of December 31,
1998 between Century and Alcoa, and have no further Liabilities to the Business
under such Agreement.
SECTION 3.18. Intellectual Property. (a) Section 3.18(a)(i) of
the Disclosure Schedule sets forth a true and complete list and a brief
description of all material Owned Intellectual Property and Section 3.18(a)(ii)
of the Disclosure Schedule sets forth a true and complete list and a brief
description of all material Licensed Intellectual Property. Except as disclosed
in Section 3.18(a)(iii) of the Disclosure Schedule, the rights of the Sellers or
Century CP in or to such material Owned Intellectual Property or, to the
knowledge of the Sellers, such material Licensed Intellectual Property do not in
any material respect conflict with or infringe on the rights of any other Person
and none of the Sellers or Century CP has received any claim or written notice
from any Person to such effect.
(b) Except as disclosed in Section 3.18(b) of the Disclosure
Schedule: (i) all the material Owned Intellectual Property is owned by a Seller
or Century CP, as the case may be, free and clear of any Encumbrance, (ii) no
material Actions have been made or asserted or are pending (nor, to the
knowledge of the Sellers has any such Action been threatened) against a Seller
or Century CP either (A) based upon or challenging or seeking to deny or
restrict the use by the Business of any of the Owned Intellectual Property or
(B) alleging that any services provided, or products manufactured or sold by the
Business are being provided, manufactured or sold in violation of any patents or
trademarks, or any other rights of any Person and (iii) to the knowledge of the
Sellers, no Person is using any patents, copyrights, trademarks, service marks,
trade names, trade secrets or similar property that are confusingly similar to
the material Owned Intellectual Property or that infringe upon the material
Owned Intellectual Property or upon the rights of the Sellers or Century CP
therein. Except as disclosed in Section 3.18(b) of the Disclosure Schedule, none
of the Sellers or any of their Affiliates has granted any license or other right
to any other Person with respect to the material Owned Intellectual Property.
The consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements will not result in the termination or material impairment
of any of the material Owned Intellectual Property.
(c) The Sellers have, or have caused to be, delivered to the
Purchaser correct and complete copies of all licenses and sublicenses for
Licensed Intellectual Property set forth in Section 3.18(a)(ii) of the
Disclosure Schedule and any and all ancillary documents pertaining thereto
(including, but not limited to, all amendments, consents and evidence of
commencement
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dates and expiration dates). With respect to each of such material licenses and
material sublicenses:
(i) any such license or sublicense, together with all
ancillary documents delivered pursuant to the first sentence of this
Section 3.18(c), is legal, valid, binding, enforceable and in full
force and effect and represents the entire agreement between the
respective licensor and licensee with respect to the subject matter of
such license or sublicense;
(ii) except as otherwise disclosed in Section 3.18(a)(ii) of
the Disclosure Schedule, with respect to each such license or
sublicense: (A) none of the Sellers or Century CP has received any
notice of cancellation or termination under such license or sublicense,
(B) none of the Sellers or Century CP has received any notice of a
breach or default under such license or sublicense, which breach or
default has not been cured, and (C) none of the Sellers or Century CP
has granted to any other Person any rights, adverse or otherwise, under
such license or sublicense;
(iii) none of the Sellers, Century CP or (to the knowledge of
the Sellers) any other party to any such license or sublicense, is in
material breach or default, and, to the knowledge of the Sellers, no
event has occurred that, with notice or lapse of time would constitute
such a breach or default or permit termination, modification or
acceleration under such license or sublicense;
(iv) no Actions have been made or asserted or are pending
(nor, to the knowledge of the Sellers has any such Action been
threatened) against a Seller or Century CP either (A) based upon or
challenging or seeking to deny or restrict the use by the Business of
any of the material Licensed Intellectual Property or (B) alleging that
any material Licensed Intellectual Property is being licensed,
sublicensed or used in violation of any patents or trademarks, or any
other rights of any Person; and
(v) to the knowledge of the Sellers, no Person is using any
patents, copyrights, trademarks, service marks, trade names, trade
secrets or similar property that are confusingly similar to the
material Licensed Intellectual Property or that infringe upon the
material Licensed Intellectual Property or upon the rights of the
Sellers or Century CP therein.
(d) Except as disclosed in Section 3.18(d) of the Disclosure
Schedule, (i) all rights of the Sellers and Century CP in each item of material
Owned Intellectual Property or material Licensed Intellectual Property are
transferable to the Purchaser as herein contemplated, and (ii) as a result of
the transactions contemplated hereby, upon the Closing, the Purchaser shall own
or possess, or own or possess adequate and enforceable licenses, sublicenses or
other rights to use, without payment of any fee, all such material Owned
Intellectual Property or such material Licensed Intellectual Property.
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(e) The Owned Intellectual Property and the Licensed
Intellectual Property constitute all the Intellectual Property used or held in
the conduct of the Business.
SECTION 3.19. Real Property. (a) Section 3.19(a) of the
Disclosure Schedule lists: (i) the location of Owned Real Property, (ii) the
current owner of such Owned Real Property, (iii) information relating to the
recordation of the deed of each parcel of Owned Real Property and (iv) the
current use of each such parcel of Owned Real Property.
(b) Section 3.19(b) of the Disclosure Schedule lists: (i) the
street address of each parcel of Leased Real Property, (ii) the identity of the
lessor, lessee and current occupant (if different from lessee) of each such
parcel of Leased Real Property, and (iii) the term (referencing applicable
renewal periods) and rental payment terms of the leases (and any subleases)
pertaining to each such parcel of Leased Real Property.
(c) Except as described in Section 3.19(c) of the Disclosure
Schedule, there is no material violation of any Law (including, without
limitation, any building, planning or zoning Law) relating to any of the Real
Property. The Sellers have made available to the Purchaser true and correct
copies of the deeds for each parcel of Owned Real Property and, to the extent
available, all title reports, surveys, certificates of occupancy, permits, and
other documents relating to or otherwise affecting the Real Property. A Seller
or Century CP, as the case may be, is in peaceful and undisturbed possession of
each parcel of Real Property and there are no contractual or legal restrictions
that preclude or restrict in any material respect the ability to use the
premises for the purposes for which they are currently being used. All existing
water, sewer, steam, gas, electricity, telephone and other utilities required
for the use, occupancy, operation and maintenance of the Real Property are
adequate for the conduct of the Business as it has been and currently is
conducted. None of the officers or Senior Managers of the Sellers have actual
knowledge of any physical condition of the Real Property which would prevent the
Business from continuing to be conducted in the manner in which it is presently
being conducted within existing capital and operating budgets taken as a whole.
The parties recognize and agree that portions of the Real Property have been
used in manufacturing operations for more than fifty years, that conditions can
change suddenly and that the preceding sentence shall not constitute in any
manner a representation, warranty or covenant with respect to latent defects or
specific budget items. Except as set forth in Section 3.19(c) of the Disclosure
Schedule, none of the Sellers or Century CP has leased or subleased any portion
of the Real Property to any other Person, nor has any Seller or Century CP
assigned its interest under any lease or sublease listed in Section 3.19(b) of
the Disclosure Schedule to any third party.
(d) The Sellers have, or have caused to be, delivered to the
Purchaser correct and complete copies of all leases and subleases listed in
Section 3.19(b) of the Disclosure Schedule and any and all ancillary documents
pertaining thereto (including, but not limited to, all amendments, consents for
alterations and documents recording variations and evidence of commencement
dates and expiration dates). Except as would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect, with respect
to each of such leases and subleases:
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(i) such lease or sublease, together with all ancillary
documents delivered pursuant to the first sentence of this Section
3.19(d), is legal, valid, binding, enforceable and in full force and
effect and represents the entire agreement between the respective
landlord and tenant with respect to such property;
(ii) except as otherwise disclosed in Section 3.19(b) of the
Disclosure Schedule, with respect to each such lease or sublease: (A)
none of the Sellers or Century CP has received any notice of
cancellation or termination under such lease or sublease, and (B) none
of the Sellers or Century CP has received any notice of a breach or
default under such lease or sublease, which breach or default has not
been cured; and
(iii) none of the Sellers, Century CP or (to the knowledge of
the Sellers any other party to such lease or sublease, is in breach or
default in any material respect, and, to the knowledge of the Sellers,
no event has occurred that, with notice or lapse of time would
constitute such a breach or default or permit termination, modification
or acceleration under such lease or sublease.
(e) There are no condemnation proceedings or eminent domain
proceedings of any kind pending or, to the knowledge of the Sellers, threatened
against the Real Property.
(f) All the Real Property is occupied under a valid and
current certificate of occupancy or similar permit and, to the knowledge of the
Sellers, except for such consents that may be required from Office Lease
landlords with respect to any assignment to the Purchaser of the Office Leases,
there are no facts that would prevent the Real Property from being occupied
after the Closing in the same manner as immediately prior to the Closing.
(g) All improvements on the Real Property constructed by or on
behalf of the Sellers or Century CP or, to the knowledge of the Sellers,
constructed by or on behalf of any other Person were constructed in compliance
with all applicable Laws (including, but not limited to, any building, planning
or zoning Laws) affecting such Real Property and Leased Real Property, except
for failures to comply that would not be reasonably likely to result in a
Material Adverse Effect.
(h) No improvements on the Real Property and none of the
current uses and conditions thereof violate any applicable deed restrictions or
other applicable covenants, restrictions, agreements, existing site plan
approvals, zoning or subdivision regulations or urban redevelopment plans as
modified by any duly issued variances, and no permits, licenses or certificates
pertaining to the ownership or operation of all improvements on the Real
Property, other than those which are transferable with the Real Property, are
required by any Governmental Authority having jurisdiction over the Real
Property, except for violations, and the absence of permits, licenses or
certificates, which would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect.
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(i) Except to the extent contemplated in the Shared Services
Agreement, (i) all improvements on any Real Property are wholly within the lot
limits of such Real Property and do not encroach on any adjoining premises or
easements, and (ii) there are no encroachments on any Real Property by any
improvements located on any adjoining premises, except for Permitted
Encumbrances.
(j) Except as otherwise set forth in Section 3.19(j) of the
Disclosure Schedule, there have been no improvements of a value in excess of
$100,000 in the aggregate made to or construction on any Real Property within
the applicable period for the filing of mechanic's liens.
(k) The rental set forth in each lease or sublease of the
Leased Real Property is the actual rental being paid, and there are no separate
agreements or understandings with respect to the same.
(l) A Seller or Century CP, as the case may be, has, and upon
the Closing the Purchaser will have, the full right to exercise any renewal
options contained in the leases and subleases, if any, pertaining to the Leased
Real Property on the terms and conditions contained therein and upon due
exercise would be entitled to enjoy the use of each Leased Real Property for the
full term of such renewal options.
(m) Seller or Century CP, as the case may be, owns, leases or
has the legal right to use all of the Real Property used in the conduct of the
Business. A Seller or Century CP, as the case may be, has in all material
respects good and marketable title to the Owned Real Property and valid and
subsisting leasehold interests in the material Leased Real Property, free and
clear of all Encumbrances other than Permitted Encumbrances and Permitted
Property Encumbrances.
SECTION 3.20. Assets. (a) Except as disclosed in Section
3.20(a) of the Disclosure Schedule, a Seller or Century CP, as the case may be,
owns, leases or has the legal right to use, in all material respects, all the
properties and assets (except for the Environmental Permits, the contracts
(whether or not Material Contracts), the Owned Intellectual Property and the
Licensed Intellectual Property, the Real Property and the licenses (whether or
not Material Licenses) as to which the provisions of Sections 3.16, 3.17, 3.18,
3.19 and 3.31, respectively, shall apply) and any other tangible personal
property, used in the conduct of the Business or relating to the conduct of the
Business, all of which properties, assets and rights (other than the Excluded
Assets) constitute the "SELECTED BUSINESS ASSETS" and, together with the
Environmental Permits, the contracts (whether or not Material Contracts), the
Owned Intellectual Property and the Licensed Intellectual Property, the Real
Property and the licenses (whether or not Material Licenses) constitute the
"BUSINESS ASSETS". A Seller or Century CP, as the case may be, has in all
material respects good and marketable title to, or, in the case of leased or
subleased Selected Business Assets, valid and subsisting leasehold interests in,
all the Selected Business Assets, free and clear of all Encumbrances, except (i)
as disclosed in Section 3.20(a) of the Disclosure Schedule; and (ii) Permitted
Encumbrances.
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(b) The Business Assets (taken together with the Shared
Services Agreement) constitute all the properties, assets and rights used or
held in, and all such properties, assets and rights as are necessary to the
conduct of, the Business. None of the officers or Senior Managers of the Sellers
have actual knowledge of any physical condition, facts or circumstances relating
to the Business Assets which would prevent the Business from continuing to be
conducted in the manner in which it is presently being conducted within existing
capital and operating budgets taken as a whole. The parties recognize and agree
that portions of the Real Property have been used in manufacturing operations
for up to fifty years, that conditions can change suddenly and that the
preceding sentence shall not constitute in any manner a representation, warranty
or covenant with respect to latent defects or specific budget items.
(c) Except as set forth in Section 3.20(a) or 3.20(c) of the
Disclosure Schedule, the Sellers have the right to sell, assign, transfer,
convey and deliver the Selected Business Assets to the Purchaser without
material penalty or other material adverse consequences. Following the
consummation of the transactions contemplated by this Agreement and the
execution of the instruments of transfer contemplated by this Agreement, the
Purchaser will own, with good, valid and marketable title, or lease, under valid
and subsisting leases, or otherwise acquire the interests of the Sellers in the
Selected Business Assets, free and clear of any Encumbrances, other than
Permitted Encumbrances, and without incurring any material penalty or other
material adverse consequence.
(d) The electric motors of the hot line (including, without
limitation, the rewinders) have the nominal performance specifications,
specified in Section 3.20(d) of the Disclosure Schedule.
SECTION 3.21. Customers. Listed in Section 3.21 of the
Disclosure Schedule are the names and addresses of the ten most significant
customers (by revenue) of the Business for the twelve-month period ended
December 31, 1998 and the amount for which each such customer was invoiced
during such period.
SECTION 3.22. Employee Benefit Matters. (a) Century WV Plans
and Material Documents. Section 3.22(a) of the Disclosure Schedule lists with
respect to the current and former employees, directors or officers of the
Rolling Business (other than any such Person who is currently a director,
officer or employee of Century) (i) all employee benefit plans (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and all bonus, stock option, stock purchase, restricted stock,
incentive, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance or other benefit plans, programs or
arrangements, and all employment, termination, severance or other contracts or
agreements, to which any of the Sellers is a party, with respect to which any of
the Sellers has any obligation or which are maintained, contributed to or
sponsored by any of the Sellers, (ii) each employee benefit plan for which any
of the Sellers could incur liability under Section 4069 of ERISA in the event
such plan has been or were to be terminated, (iii) any plan in respect of which
any of the Sellers could incur liability under Section 4212(c) of ERISA and
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(iv) any contracts, arrangements or understandings between a Seller or any of
its Affiliates and any employee of any of the Sellers, including, without
limitation, any contracts, arrangements or understandings relating to a sale of
any Seller (collectively, the "PLANS"). Each Plan is in writing and the Sellers
have furnished the Purchaser with a complete and accurate copy of each Plan and
a complete and accurate copy of each material document prepared in connection
with each such Plan or will furnish such Plan or document prior to the Closing
Date unless otherwise provided in Section 3.22(a) of the Disclosure Schedule,
including, without limitation, (i) a copy of each trust or other funding
arrangement, (ii) each summary plan description, (iii) the most recently filed
IRS Form 5500, (iv) the most recently received IRS determination letter for each
such Plan, if applicable, and (v) the most recently prepared actuarial report
and financial statement in connection with each such Plan if applicable. Except
as disclosed on Section 3.22(a) of the Disclosure Schedule with respect to the
current and former employees, directors or officers of the Rolling Business
(other than any such Person who is currently a director, officer or employee of
Century), there are no other employee benefit plans, programs, arrangements or
agreements, whether formal or informal, whether in writing or not, to which any
of the Sellers or any Subsidiary is a party, with respect to which any of the
Sellers or any Subsidiary has any obligation or which are maintained,
contributed to or sponsored by any of the Sellers or any Subsidiary. With
respect to the Business, none of the Sellers has any express or implied
commitment (i) to create, incur liability with respect to or cause to exist any
other employee benefit plan, program or arrangement, (ii) to enter into any
contract or agreement to provide compensation or benefits to any individual or
(iii) to modify, change or terminate any Plan, other than with respect to a
modification, change or termination required by ERISA or the Code.
(b) Absence of Certain Types of Plans. None of the Plans is a
multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA)
(a "MULTIEMPLOYER PLAN") or a single employer pension plan (within the meaning
of Section 4001(a)(15) of ERISA) for which any of the Sellers could incur
liability under Section 4063 or 4064 of ERISA (a "MULTIPLE EMPLOYER PLAN").
Except as provided in Section 3.22(b) of the Disclosure Schedule, none of the
Plans provides for the payment of separation, severance, termination or
similar-type benefits to any Person or obligates any of the Sellers to pay
separation, severance, termination or similar-type benefits solely as a result
of any transaction contemplated by this Agreement or as a result of a "change in
control", within the meaning of such term under Section 280G of the Code. Except
as provided in Section 3.22(b) of the Disclosure Schedule, none of the Plans
provides for or promises retiree medical, disability or life insurance benefits
to any current or former employee, officer or director of any of Century CP or
the Business. Each of the Plans is subject only to the laws of the United States
or a political subdivision thereof.
(c) Compliance with Applicable Law. Except as otherwise
provided in Section 3.22(c) of the Disclosure Schedule, each Plan is now and
always has been operated in all material respects in accordance with the
requirements of all applicable Law, including, without limitation, ERISA and the
Code, and all persons who participate in the operation of such Plans and all
Plan "fiduciaries" (within the meaning of Section 3(21) of ERISA) have always
acted in all material respects in accordance with the provisions of all
applicable Law, including, without limitation, ERISA and the Code. Each of the
Sellers has performed in all material respects all
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obligations required to be performed by it under, is not in any material respect
in default under or in violation of, and has no knowledge of any material
default or violation by any party to, any Plan. No legal action, suit or claim
is pending or, to Sellers' knowledge, threatened with respect to any Plan (other
than claims for benefits in the ordinary course) and no fact or event exists
that could give rise to any such action, suit or claim.
(d) Qualification of Certain Plans. Except as otherwise
provided in Section 3.22(d) of the Disclosure Schedule, each Plan which is
intended to be qualified under Section 401(a) of the Code or Section 401(k) of
the Code has received a favorable determination letter from the IRS after 1985
that it is so qualified and each trust established in connection with any Plan
which is intended to be exempt from federal income taxation under Section 501(a)
of the Code has received a determination letter from the IRS after 1985 that it
is so exempt, and, to Sellers' knowledge, no material fact or event has occurred
since the date of such determination letter from the IRS to adversely affect the
qualified status of any such Plan or the exempt status of any such trust.
(e) Absence of Certain Liabilities and Events. Except as
disclosed in Section 3.22(e) of the Disclosure Schedule, none of the Sellers has
incurred any liability under, arising out of or by operation of Title IV of
ERISA (other than liability for premiums to the Pension Benefit Guaranty
Corporation arising in the ordinary course), including, without limitation, any
liability in connection with (i) the termination or reorganization of any
employee benefit plan subject to Title IV of ERISA or (ii) the withdrawal from
any Multiemployer Plan or Multiple Employer Plan, and no fact or event exists
which is reasonably likely to give rise to any such liability. No complete or
partial termination has occurred within the five years preceding the date hereof
with respect to any Plan. Except with respect to the transfer of plan assets
contemplated in Section 6.03, or as disclosed in Section 3.22(e) of the
Disclosure Schedule, no reportable event (within the meaning of Section 4043 of
ERISA) has occurred or, to the knowledge of the Sellers, is expected to occur
with respect to any Plan subject to Title IV of ERISA. No Plan had an
accumulated funding deficiency (within the meaning of Section 302 of ERISA or
Section 412 of the Code), whether or not waived, as of the most recently ended
plan year of such Plan. Except as disclosed in Section 3.22(e) of the Disclosure
Schedule, none of the assets of any of the Sellers is the subject of any lien
arising under Section 302(f) of ERISA or Section 412(n) of the Code; none of the
Sellers has been required to post any security under Section 307 of ERISA or
Section 401(a)(29) of the Code; and no fact or event exists which is reasonably
likely to give rise to any such lien or requirement to post any such security.
(f) Plan Contributions and Funding. All contributions,
premiums or payments required to be made with respect to any Plan have been made
on or before their due dates. All such contributions which have been deducted
for income tax purposes have not been challenged or disallowed by any government
entity.
(g) WARN Act. The Sellers and the Subsidiaries are in
compliance with the requirements of the Workers Adjustment and Retraining
Notification Act ("WARN") and have no liabilities pursuant to WARN.
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(h) Century CP Plans. Section 3.22(h) of the Disclosure
Schedule lists each employee welfare benefit or employee pension benefit plan
(individually, each a "CENTURY CP PLAN" and, collectively, "CENTURY CP PLANS")
Century maintains or to which Century contributes or in which the Century CP
employees participate. Each such Century CP Plan (and related trust, insurance
contract, or fund) complies in form and in operation in all material respects
with the applicable requirements of ERISA, the Code and other applicable laws.
SECTION 3.23. Labor Matters. Except as detailed in Section
3.17 of the Disclosure Schedule and the book of grievances which the Sellers
have furnished to the Purchaser, solely in respect of employees engaged in the
Business, (a) none of the Sellers is a party to any collective bargaining
agreement or other labor union contract applicable to persons employed by any of
the Sellers, or in the Business and, to the knowledge of the Sellers, currently
there are no organizational campaigns, petitions or other unionization
activities seeking recognition of a collective bargaining unit which could
affect any of the Sellers; (b) there are no strikes, slowdowns or work stoppages
pending or, to the knowledge of the Sellers, threatened between any of the
Sellers and any of their respective employees, and none of the Sellers has
experienced any such strike, slowdown or work stoppage within the past three
years; (c) none of the Sellers has breached in any material respect or otherwise
failed to comply with the provisions of any collective bargaining or union
contract and there are no written grievances outstanding against any of the
Sellers under any such agreement or contract; (d) there are no unfair labor
practice complaints pending against any of the Sellers before the National Labor
Relations Board or any other Governmental Authority or any current union
representation questions involving employees of any of the Sellers; (e) each of
the Sellers is currently in compliance in all material respects with all
applicable Laws relating to the employment of labor, including those related to
wages, hours, collective bargaining and the payment and withholding of taxes and
other sums as required by the appropriate Governmental Authority and has
withheld and paid to the appropriate Governmental Authority or is holding for
payment not yet due to such Governmental Authority all amounts required to be
withheld from employees of any of the Sellers and is not liable for any arrears
of wages, taxes, penalties or other sums for failure to comply with any of the
foregoing; (f) each of the Sellers has paid in full to all their respective
employees or adequately accrued for in accordance with U.S. GAAP consistently
applied all material wages, salaries, commissions, bonuses, benefits and other
compensation due to or on behalf of such employees; (g) there is no material
claim with respect to payment of wages, salary or overtime pay that has been
asserted or is now pending or threatened before any Governmental Authority with
respect to any Persons currently or formerly employed by any of the Sellers; (h)
none of the Sellers is a party to, or otherwise bound by, any consent decree
with, or citation by, any Governmental Authority relating to employees or
employment practices; (i) there is no charge or proceeding with respect to a
violation of any occupational safety or health standards that has been asserted
or is now pending or threatened with respect to any of the Sellers; and (j)
there is no charge of discrimination in employment or employment practices, for
any reason, including, without limitation, age, gender, race, religion or other
legally protected category, which has been asserted or is now pending or
threatened before the United States Equal Employment Opportunity
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Commission, or any other Governmental Authority in any jurisdiction in which any
of the Sellers has employed or currently employs any such Person.
SECTION 3.24. Century CP Labor and Employment Matters. Except
as set forth in Section 3.24 of the Disclosure Schedule, Century CP is not
subject to any (i) collective bargaining or other labor agreement; or (ii)
employment, retainer, or consulting agreement. The Sellers have not committed,
nor have been notified in writing of any claim to have committed, any unfair
labor practice with respect to Century CP. The Sellers have delivered to the
Purchaser a complete and accurate list of all Century CP employees and their
remuneration. Except as set forth in Section 3.24, as of the date hereof, none
of the Century CP employees has given the Sellers formal notice that he/she
will, or intends to, resign or seek other employment.
SECTION 3.25. Employees. (a) The Sellers have delivered to the
Purchaser a complete and accurate list containing the name, place of employment,
the current annual salary rates, bonuses, deferred or contingent compensation
(whether payable in cash or otherwise), pension, accrued vacation, "golden
parachute" and other like benefits paid or payable (in cash or otherwise), the
date of employment and a description of position and job function of each
current employee listed on Section 6.01 of the Disclosure Schedule engaged in
the Business.
(b) All salaried employees of the Business are now, or will by
the Closing be, under written obligation to a Seller or a Subsidiary to maintain
in confidence all confidential or proprietary information acquired by them in
the course of their employment and to assign to a Seller or a Subsidiary all
inventions made by them in connection within the scope of their employment
during such employment and for a reasonable period thereafter.
SECTION 3.26. Taxes. (a) Except as set forth in Section 3.26
of the Disclosure Schedule: (i) all returns and reports in respect of Taxes
required to be filed as of the date hereof with respect to each of the Sellers
and each Subsidiary and the Business have been timely filed; (ii) all Taxes
shown to be due on such returns and reports have been timely paid; (iii) all
such returns and reports are true, correct and complete in all material
respects; (iv) no adjustment relating to such returns has been proposed formally
or informally by any Tax authority and, to the knowledge of the Sellers, no
basis exists for any such adjustment; (v) there are no pending or, to the
knowledge of the Sellers, threatened actions or proceedings for the assessment
or collection of Taxes against any of the Sellers or any Subsidiary or (insofar
as either relates to the activities or income of any of the Sellers or any
Subsidiary or the Business or could result in liability of any of the Sellers or
any Subsidiary on the basis of joint and/or several liability) any corporation
that was includible in the filing of a return with any of the Sellers on a
consolidated or combined basis; (vi) no consent under Section 341(f) of the Code
has been filed with respect to Century CP; and (vii) there are no Tax liens on
any assets of the Business.
(b) Except as disclosed in Section 3.26 of the Disclosure
Schedule: (i) there are no outstanding waivers or agreements extending the
statute of limitations for any period with respect to any Tax to which any of
the Sellers or any Subsidiary or the Business may be subject; (ii) there are no
requests for information currently outstanding that could affect the Taxes of
any
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of the Sellers, any Subsidiary or the Business; and (iii) to the knowledge of
the Sellers there are no proposed reassessments of any property owned by any of
the Sellers or any Subsidiary or other proposals that could increase the amount
of any Tax to which any of the Sellers, any Subsidiary or the Business would be
subject.
SECTION 3.27. Insurance. Section 3.27 of the Disclosure
Schedule sets forth all insurance coverage of the Sellers with respect to the
Business, and, to the extent available to the Sellers, details for the last
three years of the Business' loss experience with respect to such coverage.
SECTION 3.28. Accounts; Lockboxes; Safe Deposit Boxes; Powers
of Attorney. Section 3.28 of the Disclosure Schedule is a true and complete list
of (i) the names of each bank, savings and loan association, securities or
commodities broker or other financial institution in which the Business (in the
name of a Seller or Century CP) has an account, including cash contribution
accounts, and the names of all persons authorized to draw thereon or have access
thereto, (ii) the location of all lockboxes and safe deposit boxes of the
Business and the names of all Persons authorized to draw thereon or have access
thereto and (iii) the names of all Persons, if any, holding powers of attorney
from the Sellers or Century CP relating to the Business. At the time of the
Closing, none of the Sellers shall have any such account, lockbox or safe
deposit box for use in respect of the Business other than those listed in
Section 3.28 of the Disclosure Schedule, nor shall any additional Person have
been authorized, from the date of this Agreement, to draw thereon or have access
thereto or to hold any such power of attorney, without the prior written consent
of the Purchaser. At the time of the Closing, all monies and accounts of the
Business shall be held by, and be accessible only to, the Business.
SECTION 3.29. Year 2000 Compliance. The Sellers have initiated
reviews and committed resources that, to the Sellers' knowledge, are sufficient
to ensure that on the Closing Date (a) all computer software necessary for the
conduct of the Business designed to be used prior to, during, and after December
31, 1999 will operate in all material respects during each such time period
without error relating to the year 2000, specifically including any error
relating to, or being the product of, date data which represents or references
different centuries or more than one century and (b) such computer software will
accept, calculate, sort, extract and otherwise process date inputs and date
values, and return and display date values, in a consistent manner regardless of
the dates used, whether before, on, or after January 1, 2000.
SECTION 3.30. Governmental Licenses and Permits. Section 3.30
of the Disclosure Schedule lists all material governmental qualifications,
registrations, filings, privileges, franchises, licenses, permits, approvals or
authorizations other than the Environmental Permits (collectively, the "MATERIAL
LICENSES") used or held in the conduct of the Business. All of such Material
Licenses are in full force and effect, and the Sellers and Century CP are in
material compliance with each such Material License.
SECTION 3.31. Disclosure Schedule Supplements. The facts,
events or circumstances referenced in the Disclosure Schedule Supplements, taken
as a whole, do not, and
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will not, individually or in the aggregate, result in Losses to the Business of
more than $1,000,000.
SECTION 3.32. Opinion of Financial Advisor. The Sellers have
received the opinion of Morgan Stanley Dean Witter, dated a date prior to the
date hereof, to the effect that, as of such date, the Purchase Price is fair
from a financial point of view to the Sellers.
SECTION 3.33. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission from the
Business in connection with the transactions contemplated by this Agreement or
the Ancillary Agreements based upon arrangements made by or on behalf of the
Sellers.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
As an inducement to the Sellers to enter into this Agreement,
the Purchaser hereby represents and warrants to the Sellers as follows:
SECTION 4.01. Organization and Authority of the Purchaser. The
Purchaser is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and has all necessary corporate power
and authority to enter into this Agreement and the Ancillary Agreements to which
it is a party, to carry out its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by the Purchaser of this Agreement and the Ancillary Agreements to
which it is a party, the performance by the Purchaser of its obligations
hereunder and thereunder and the consummation by the Purchaser of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite action on the part of the Purchaser. This Agreement has been, and upon
their execution by the Purchaser the Ancillary Agreements will be, duly executed
and delivered by the Purchaser, and (assuming due authorization, execution and
delivery by the Sellers) this Agreement constitutes, and upon their execution
the Ancillary Agreements will constitute, legal, valid and binding obligations
of the Purchaser in accordance with their respective terms.
SECTION 4.02. No Conflict. Assuming compliance with the
notification requirements of the HSR Act and the making and obtaining of all
filings, notifications, consents, approvals, authorizations and other actions
referred to in Section 4.03, except as may result from any facts or
circumstances relating solely to the Sellers, the execution, delivery and
performance of this Agreement and the Ancillary Agreements by the Purchaser do
not and will not (a) violate, conflict with or result in the breach of any
provision of the Charter or by-laws (or other organizational documents) of the
Purchaser (b) materially conflict with or violate any Law or Governmental Order
applicable to the Purchaser or (c) conflict with, or result in any breach of,
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constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, require any consent under, or give to
others any rights of termination, amendment, acceleration, suspension,
revocation or cancellation of, or result in the creation of any Encumbrance on
any of the assets or properties of the Purchaser pursuant to, any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement to which the Purchaser is a party
or by which any of such assets or properties is bound or affected, which would,
individually or in the aggregate, have a material adverse effect on the ability
of the Purchaser to consummate the transactions contemplated by this Agreement
or by the Ancillary Agreements.
SECTION 4.03. Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement and each Ancillary
Agreement to which it is a party by the Purchaser do not and will not require
any consent, approval, authorization or other order of, action by, filing with,
or notification to, any Governmental Authority, except the notification
requirements of the HSR Act.
SECTION 4.04. Litigation. No claim, action, proceeding or
investigation is pending or, to the best knowledge of the Purchaser after due
inquiry, threatened, which seeks to materially delay or prevent the consummation
of, or which would be reasonably likely to materially adversely affect the
Purchaser's ability to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements.
SECTION 4.05. Brokers. No Broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission from the
Sellers in connection with the transactions contemplated by this Agreement or
the Ancillary Agreements based upon arrangements made by or on behalf of the
Purchaser.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Conduct of Business Prior to the Closing. (a)
The Sellers covenant and agree that, except with the prior written consent of
the Purchaser (which shall not be unreasonably withheld), between the date
hereof and the Closing, the Sellers shall, and shall cause Century CP to,
conduct the Business only in the ordinary course and consistent with the
Sellers' and Century CP's prior practice. Without limiting the generality of the
foregoing, except with the prior written consent of the Purchaser and except in
the ordinary course of business consistent with past practice to meet market
conditions, the Sellers shall, and shall cause Century CP to, (i) continue their
promotional activities, and pricing and purchasing policies, in accordance with
past practice; (ii) not shorten or lengthen the customary payment cycles, or
otherwise change the terms, for any payables or receivables; (iii) continue to
acquire, produce and maintain Inventory (including, without limitation, the mix
of Inventory) in accordance with past practice; (iv) use commercially reasonable
efforts to (A) preserve intact its business
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organization and the business organization of the Business, (B) keep available
to the Purchaser the services of the employees of the Business, (C) continue in
full force and effect without material modification all existing policies or
binders of insurance currently maintained in respect of the Business and (D)
preserve current relationships with customers, suppliers and other persons with
which the Business has significant business relationships; (v) exercise, but
only after notice to the Purchaser and receipt of the Purchaser's prior written
approval (which shall not be unreasonably withheld), any rights of renewal
pursuant to the terms of any of the leases or subleases set forth in Section
3.19(b) of the Disclosure Schedule which by their terms would otherwise expire;
(vi) renew or apply for renewal all Material Licenses and Environmental Permits;
(vii) not amend, modify or consent to the termination of any Material Contract
or the Business' rights thereunder; and (viii) not engage in any practice, take
any action, fail to take any action or enter into any transaction which could
cause any representation or warranty of the Sellers to be untrue in any material
respect or result in a material breach of any covenant made by the Sellers in
this Agreement.
(b) The Sellers covenant and agree, jointly and severally,
that, prior to the Closing, without the prior written consent of the Purchaser
(which shall not be unreasonably withheld), none of the Sellers or Century CP
will do any of the things enumerated in the second sentence of Section 3.13
(including, without limitation, clauses (a) through (bb) thereof).
(c) The Sellers covenant and agree that except with the prior
written consent of the Purchaser, between the date hereof and the Closing, the
Sellers shall not issue or sell any shares of capital stock or any option,
warrant or other right to acquire the same.
SECTION 5.02. Access to Information. (a) From the date hereof
until the Closing, upon reasonable notice to the Sellers' officers designated
below and for purposes of facilitating the transfer of the Business, the Sellers
shall, and shall cause Century CP and each of the Sellers' and Century CP's
officers, directors, managers, agents, accountants and counsel to (i) afford to
up to two officers, employees or authorized agents or representatives of the
Purchaser at any given facility at any given time for an aggregate of 12 days
(i.e., 24 man days) reasonable access during normal business hours to the
offices, properties, plant and other facilities of the Business (and to those
officers, directors, employees, agents, accountants and counsel of the Sellers
and Century CP who have knowledge relating to the Business) and (ii) furnish to
such representatives of the Purchaser such additional access, data and other
information regarding the Business and the Assets as the Purchaser may from time
to time reasonably request. The Purchaser acknowledges that nothing in this
Section 5.02 shall require the Sellers to grant access to officers, employees,
agents and representatives of the Purchaser in order to permit the Purchaser to
implement any expansion plans that it may contemplate in respect of the
Business. The parties hereto further agree that with respect to this Section
5.02 (i) all requests by the Purchaser for access or information will be
submitted or directed only to Century's President and Chief Operating Officer
(in respect of manufacturing and technical matters), Chief Financial Officer (in
respect of financial and accounting matters and management information and
control systems) and General Counsel and Chief Administrative Officer (in
respect of contractual, environmental, human resource and any other matters);
(ii) that the Purchaser shall not interfere
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with any of the businesses or operations of the Sellers or Century CP; and (iii)
that nothing in this Section 5.02 shall restrict the Purchaser's access to the
offices, properties, plant and other facilities of the Business (and to those
officers, directors, employees, agents, accountants and counsel of the Sellers
and Century CP who have knowledge relating to the Business) or financial,
operating, technical and environmental data and other information regarding the
Business and the Assets to the extent reasonably required or contemplated under
the Shared Services Agreement and the Molten Aluminum Purchase Agreement.
(b) In order to facilitate the resolution of any claims made
against or incurred by the Sellers prior to the Closing, for a period of seven
years after the Closing, the Purchaser shall (i) retain the books and records of
the Business which are transferred to the Purchaser pursuant to this Agreement
relating to periods prior to the Closing in a manner reasonably consistent with
the prior practices of the Sellers and (ii) upon reasonable notice, afford the
officers, employees and authorized agents and representatives of the Sellers
reasonable access (including the right to make, at the Sellers' expense,
photocopies), during normal business hours, to such books and records.
(c) In order to facilitate the resolution of any claims made
by or against or incurred by the Purchaser after the Closing, for a period of
seven years following the Closing, the Sellers shall (i) retain all books and
records of the Sellers which are not transferred to the Purchaser pursuant to
this Agreement and which relate to the Business for periods prior to the Closing
and which shall not otherwise have been delivered to the Purchaser and (ii) upon
reasonable notice, afford the officers, employees and authorized agents and
representatives of the Purchaser, reasonable access (including the right to make
photocopies at the expense of the Purchaser), during normal business hours, to
such books and records.
SECTION 5.03. Confidentiality. (a) For a period of two years
from the Closing Date, the Sellers agree to, and shall cause their agents,
representatives, Affiliates, Senior Managers, officers and directors to, and
shall use commercially reasonable efforts to cause their other employees to: (i)
treat and hold as confidential (and not disclose or provide access to any Person
to) all information relating to trade secrets, processes, patent or trademark
applications, product development, price, customer and supplier lists, pricing
and marketing plans, policies and strategies, operations methods, product
development techniques, business acquisition plans, new personnel acquisition
plans and any other confidential information with respect to the Business, (ii)
in the event that the Sellers or any such agent, representative, Affiliate,
Senior Manager or employee, officer or director becomes legally compelled to
disclose any such information, to the extent legally possible provide the
Purchaser with prompt written notice of such requirement so that the Purchaser
may seek a protective order or other remedy or waive compliance with this
Section 5.03(a), (iii) in the event that such protective order or other remedy
is not obtained, or the Purchaser waives compliance with this Section 5.03(a),
furnish only that portion of such confidential information which is legally
required to be provided and exercise commercially reasonable efforts to obtain
assurances that confidential treatment will be accorded such information, and
(iv) promptly furnish (prior to, at, or as soon as practicable following, the
Closing) to the Purchaser any and all copies (in whatever form or medium) of all
such
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confidential information then in the possession of the Sellers or any of their
agents, representatives, Affiliates, Senior Managers or employees, officers and
directors and destroy any and all additional copies then in the possession of
the Sellers or any of their agents, representatives, Affiliates, Senior Managers
or employees, officers and directors of such information and the portion of any
analyses, compilations, studies or other documents prepared on the basis
thereof; provided, however, that clauses (i), (ii) and (iii) of this sentence
shall not apply to any information that, at the time of disclosure, is available
publicly and was not disclosed in breach of this Agreement by the Sellers, their
agents, representatives, Affiliates, Senior Managers or employees, officers or
directors. The Sellers agree and acknowledge that remedies at Law for any breach
of their obligations under this Section 5.03(a) are inadequate and that in
addition thereto the Purchaser shall be entitled to seek equitable relief,
including injunction and specific performance, in the event of any such breach,
without the necessity of demonstrating the inadequacy of monetary damages.
(b) For a period of two years from the Closing Date, the
Purchaser agrees to, and shall cause its agents, representatives, Affiliates,
senior managers, officers and directors to, and shall use commercially
reasonable efforts to cause their other employees to: (i) treat and hold as
confidential (and not disclose or provide access to any Person to) all
information obtained in connection with transactions contemplated by this
Agreement and the Ancillary Agreements relating to trade secrets, processes,
patent or trademark applications, product development, price, customer and
supplier lists, pricing and marketing plans, policies and strategies, operations
methods, product development techniques, business acquisition plans, new
personnel acquisition plans and any other confidential information with respect
to the business of the Sellers (other than the Business), (ii) in the event that
the Purchaser or any such agent, representative, Affiliate, senior manager or
employee, officer or director becomes legally compelled to disclose any such
information, to the extent legally possible provide the Sellers with prompt
written notice of such requirement so that the Sellers may seek a protective
order or other remedy or waive compliance with this Section 5.03(b), (iii) in
the event that such protective order or other remedy is not obtained, or the
Sellers waive compliance with this Section 5.03(b), furnish only that portion of
such confidential information which is legally required to be provided and
exercise commercially reasonable efforts to obtain assurances that confidential
treatment will be accorded such information, and (iv) promptly furnish (prior
to, at, or as soon as practicable following, the Closing) to the Sellers any and
all copies (in whatever form or medium) of all such confidential information
then in the possession of the Purchaser or any of its agents, representatives,
Affiliates, senior managers or employees, officers and directors and destroy any
and all additional copies then in the possession of the Purchaser or any of its
agents, representatives, Affiliates, senior managers or employees, officers and
directors of such information and the portion of any analyses, compilations,
studies or other documents prepared on the basis thereof; provided, however,
that clauses (i), (ii) and (iii) of this sentence shall not apply to any
information that, at the time of disclosure, is available publicly and was not
disclosed in breach of this Agreement by the Purchaser, its agents,
representatives, Affiliates, senior managers or employees, officers or
directors. The Purchaser agrees and acknowledges that remedies at Law for any
breach of its obligations under this Section 5.03(b) are inadequate and that in
addition thereto the Sellers shall be entitled to seek equitable relief,
including injunction
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and specific performance, in the event of any such breach, without the necessity
of demonstrating the inadequacy of monetary damages.
SECTION 5.04. Regulatory and Other Authorizations; Notices and
Consents. (a) Each of the Sellers and the Purchaser will use commercially
reasonable efforts to obtain (or in the case of the Sellers cause Century CP to
obtain) all authorizations, consents, orders and approvals of all Governmental
Authorities and officials that may be or become necessary for their execution
and delivery of, and the performance of their obligations pursuant to, this
Agreement and the Ancillary Agreements and will cooperate fully with such other
parties in promptly seeking to obtain all such authorizations, consents, orders
and approvals, it being understood that (i) nothing in this Section 5.04(a) is
intended to be a covenant that the Sellers shall in fact obtain on the
Purchaser's behalf any such authorizations, consents, orders or approvals, or
(ii) except as provided in Section 8.02, obtaining any such authorizations,
consents, orders and approvals shall not be a condition to Closing. Each party
hereto agrees to make an appropriate filing, if necessary, pursuant to the HSR
Act with respect to the transactions contemplated by this Agreement within
fifteen Business Days of the date hereof and to supply as promptly as
practicable to the appropriate Governmental Authorities any additional
information and documentary material that may be requested pursuant to the HSR
Act. Each party to this Agreement shall promptly notify the other parties of any
communication it or any of its Affiliates receives from any Governmental
Authority relating to the matters that are the subject of this Agreement and
permit the other parties to review in advance any proposed communication by such
party to any Governmental Authority.
(b) The Sellers shall, or shall cause Century CP to, give
promptly such notices to third parties and use commercially reasonable efforts
to obtain such third party consents as the Purchaser may reasonably deem
necessary or desirable in connection with the transactions contemplated by this
Agreement, including, without limitation, all third party consents that are
necessary or desirable in connection with the transfer of the Material
Contracts, it being understood that (i) nothing in this Section 5.04(b) is
intended to be a covenant that the Sellers shall in fact obtain on the
Purchaser's behalf any such consents or (ii), except as provided in Section
8.02(l), obtaining any such consents shall not be a condition to Closing.
(c) The Purchaser shall cooperate and use commercially
reasonable efforts to assist the Sellers in giving such notices and obtaining
such consents; provided, however, that the Purchaser shall have no obligation to
give any guarantee or other consideration of any nature in connection with any
such notice or consent or to consent to any change in the terms of any Material
Contract which the Purchaser may deem adverse to the interests of the Purchaser
or the Business.
(d) The Sellers and the Purchaser agree that, in the event any
consent, approval or authorization necessary or desirable to preserve for the
Business or the Purchaser any right or benefit under any lease, license,
contract, commitment or other agreement or arrangement to which the Sellers or
Century CP is a party and which is to be transferred to the Purchaser pursuant
to Section 2.01(a) is not obtained prior to the Closing, the Sellers will,
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subsequent to the Closing, cooperate with the Purchaser in attempting to obtain
such consent, approval or authorization as promptly thereafter as practicable.
If such consent, approval or authorization cannot be obtained, the Sellers will
use commercially reasonable efforts to provide the Purchaser on a back-to-back
or similar basis with the rights and benefits of the affected lease, license,
contract, commitment or other agreement or arrangement for the term of such
lease, license, contract or other agreement or arrangement, and, if the Sellers
provide such rights and benefits, the Purchaser shall assume the obligations and
burdens thereunder.
SECTION 5.05. Disclosure Schedule Supplements; Notice of
Developments. (a) The Purchaser and the Sellers agree that the Sections of the
Disclosure Schedule qualifying Article III are not final and are subject to
further review and revision. The Sellers may supplement such Sections of the
Disclosure Schedule qualifying Article III by including, to the extent
appropriate, a description (in reasonable detail) of facts, events or
circumstances affecting the Business and existing prior to the date hereof and
delivering to the Purchaser within 20 days of the date hereof supplemental
sections of the Disclosure Schedule qualifying Article III (each, "DISCLOSURE
SCHEDULE SUPPLEMENT"); provided that nothing in this Section 5.05(a) will permit
the Sellers to include in the Disclosure Schedule Supplements any references to
any facts, events or circumstances which, taken as a whole, individually or in
the aggregate, (i) reflect Liabilities of the Business greater than $1,000,000,
(ii) result in, or may be reasonably likely to result in, Losses to the Business
of more than $1,000,000 or (iii) would materially and adversely affect the
Purchaser's ability to conduct the Business on the Closing Date.
(b) Prior to the Closing, the Sellers shall promptly notify
the Purchaser in writing of (i) all events, circumstances, facts and occurrences
arising subsequent to the date of this Agreement which result in any material
breach of a representation or warranty or covenant of the Sellers in this
Agreement or which have the effect of making any representation or warranty of
the Sellers in this Agreement untrue or incorrect in any material respect and
(ii) all other developments materially affecting the Business or the Business
Assets.
SECTION 5.06. Use of Intellectual Property. (a) Except as
determined by the committee to be established pursuant to the Shared Services
Agreement in respect of the Shared Intellectual Property or as set forth in
Section 5.06 of the Disclosure Schedule, from and after the Closing, none of the
Sellers or the Subsidiaries (other than Century CP) shall use any of the Owned
Intellectual Property or the Licensed Intellectual Property.
SECTION 5.07. Non-Competition. (a) In partial consideration of
the payment of the Purchase Price, as set forth in Section 2.04, the Sellers and
the Purchaser agree that, for a period of five (5) years after the Closing (the
"RESTRICTED PERIOD"), none of the Sellers or the Subsidiaries (other than
Century CP) shall acquire, directly or indirectly, any ownership, equity, or
similar interest (whether through a stock, asset or other type of transaction)
in any multipurpose aluminum rolling mill in North America having a production
capacity of at least 500,000,000 pounds per year that manufactures, produces or
supplies heat-treated aluminum products or brazing products ("COVERED
PRODUCTS"), provided that nothing herein shall restrict the Sellers from
acquiring an interest in a Person that manufactures, produces or supplies
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Covered Products if such activities did not represent or account for more than
20% of such Person's revenues, assets or income during, or as of the end of, any
of the three fiscal years preceding the proposed date of acquisition.
(b) As a separate and independent covenant, the Sellers agree
with the Purchaser that, for a period of five (5) years following the Closing,
none of the Sellers or the Subsidiaries (other than Century CP) will in any way,
directly or indirectly, interfere or attempt to interfere with any contractual
relationship in North America of the Business with any customer or supplier
relationship in existence on the date hereof.
(c) The Restricted Period shall be extended by the length of
any period during which the Sellers are in breach of the terms of this Section
5.07.
(d) The Sellers acknowledge that the covenants of the Sellers
set forth in this Section 5.07 are an essential element of this Agreement and
that, but for the agreement of the Sellers to comply with these covenants, the
Purchaser would not have entered into this Agreement. The Sellers acknowledge
that this Section 5.07 constitutes an independent covenant and shall not be
affected by performance or nonperformance of any other provision of this
Agreement by the Purchaser. The Sellers has independently consulted with its
counsel and after such consultation agrees that the covenants set forth in this
Section 5.07 are reasonable and proper.
SECTION 5.08. Bulk Transfer Laws. Without prejudice to Section
9.02(a)(vi), the Purchaser hereby waives compliance by the Sellers with any
applicable bulk sale or bulk transfer laws of any jurisdiction in connection
with the sale of the Assets to the Purchaser.
SECTION 5.09. Cash; Other Communications. From and after the
Closing, (a) the Sellers shall use commercially reasonable efforts to take, or
cause to be taken, all appropriate action, and do or cause to be done all things
necessary, proper or advisable under the applicable Laws to put the Purchaser in
effective possession, ownership and control of the Business Assets and the
Purchaser shall cooperate with the Sellers for that purpose and (b) the
Purchaser shall use commercially reasonable efforts to take, or cause to be
taken, all appropriate action, and do or cause to be done all things necessary,
proper or advisable under applicable Laws to put the Sellers in effective
possession, ownership and control of assets not included within the Business
Assets and the Sellers shall cooperate with the Purchaser for that purpose.
Subject to the terms of the Shared Services Agreement, all cash and other
remittances, mail and other communications relating to the Business Assets or
the Business received by the Sellers or their Affiliates shall be promptly
turned over to the Purchaser by the Sellers and, until sent to the Purchaser,
shall be deemed held in trust by the Sellers for the benefit of the Purchaser.
Subject to the terms of the Shared Services Agreement, all cash and other
remittances, mail and other communications relating to any business of the
Sellers not included within the Business being purchased by the Purchaser
hereunder that are received by the Purchaser shall be promptly turned over to
the Sellers by the Purchaser and, until sent to the Sellers, shall be deemed
held in trust by the Purchaser for the benefit of the Sellers.
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SECTION 5.10. Further Action. (a) Each of the parties hereto
shall use commercially reasonable efforts to take, or cause to be taken, all
appropriate action, do or cause to be done all things necessary, proper or
advisable under applicable Laws, and execute and deliver such documents and
other papers, as may be required to carry out the provisions of this Agreement
and the Ancillary Agreements and consummate and make effective the transactions
contemplated by this Agreement and the Ancillary Agreements, including, without
limitation, fulfill, or cause to be fulfilled, the conditions set forth in
Article VIII.
(b) The Purchaser agrees with the Sellers that, for a period
of two (2) years following the Closing Date, none of the Purchaser or its
Affiliates on the one hand, or the Sellers or their respective Affiliates on the
other hand, will, in any way, directly or indirectly, solicit, offer to hire or
induce (except through advertisements to the general public for positions) any
person who is an employee of the other, to accept employment by it or enter into
a business relationship with it.
SECTION 5.11. Environmental Permits. The Sellers will assist
the Purchaser in the transfer or the reissue of such Environmental Permits or in
any arrangement for their continued use by the Purchaser, including assisting in
filing applications for any new Environmental Permits, it being understood that
(a) nothing in this Section 5.11 is intended to be a covenant that the Sellers
shall in fact obtain on the Purchaser's behalf any such Environmental Permits,
or (b) except as provided in Section 8.02, obtaining any such Environmental
Permits shall not be a condition to Closing
SECTION 5.12. Intellectual Property. The Sellers agree to
provide to the Purchaser within 15 Business Days of the date hereof a list of
all Owned Intellectual Property and all Licensed Intellectual Property that is
currently used by Century WV in its operations other than the Business
(collectively, the "SHARED INTELLECTUAL PROPERTY"), provided that the parties
agree that the Shared Intellectual Property shall not include any Owned
Intellectual Property or Licensed Intellectual Property that is material to the
Business or used in the manufacturing activities of the Business. The parties
agree to refer to the committee to be established pursuant to the Shared
Services Agreement matters relating to the Shared Intellectual Property and that
the Shared Intellectual Property shall thereafter be deemed a "Shared Service"
under such agreement.
ARTICLE VI
EMPLOYEE MATTERS
SECTION 6.01. Offer of Employment. No later than 10 days prior
to the Closing Date, the Purchaser shall offer employment to each of the hourly
and salaried employees listed on a schedule previously provided to the Purchaser
who remains actively employed by the Sellers as of the Closing Date in the
Rolling Business (excluding individuals on short or long
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term disability or leave of absence or layoff). Each such employee who accepts
such offer of employment by the Purchaser, and each employee hired after the
date hereof by the Sellers to work in the Rolling Business and who accepts an
offer of employment by the Purchaser on or prior to the Closing Date shall
hereinafter be referred to as a "TRANSFERRED EMPLOYEE".
SECTION 6.02. Collective Bargaining Agreements. As of the
Closing Date, the Purchaser agrees to assume any existing collective bargaining
agreements sponsored by the Sellers and listed on Section 3.23 of the Disclosure
Schedule.
SECTION 6.03. Defined Benefit Pension Plans. (a) Effective as
of the Closing Date, the Transferred Employees shall no longer participate in
the Sellers' defined benefit pension plans. Effective as of such date, the
Purchaser shall establish replacement defined benefit pension plans (the "NEW
DEFINED BENEFIT PLANS") that are intended to be qualified under Section 401(a)
of the Code, and a related trust or trusts that are intended to be exempt from
taxation under Section 501(a) of the Code for the benefit of the Transferred
Employees, the terms of which plans and trust(s) shall be substantially
comparable to the terms of the Sellers' defined benefit pension plans (and in
compliance with any applicable collective bargaining agreement). The Purchaser
agrees that the new Defined Benefit Plans and their related trusts and funding
arrangements shall be operative in all respects on the Closing Date and the
Purchaser agrees to deliver to the Seller the certificate of an officer or an
opinion of counsel representing that the New Defined Benefit Plans meet the
requirements for qualification under Section 401(a) of the Code. The Purchaser
agrees as soon as practicable after the Closing Date to apply for, and take all
actions necessary to secure, a determination letter from the Internal Revenue
Service to the effect that the New Defined Benefit Plans are qualified under the
applicable provisions of the Code. The Purchaser further agrees that if such a
determination letter is not obtained, any liability resulting from the failure
to obtain such letter shall be the responsibility of the Purchaser. The
Purchaser shall recognize the Transferred Employees' service prior to the
Closing Date with the Sellers for all purposes under the New Defined Benefit
Plans.
(b) As soon as practicable after the Closing Date, the Sellers
shall cause to be transferred from the Sellers' defined benefit pension plans
(the "SELLERS' PENSION PLANS") to the New Defined Benefit Plans all accrued
benefits and other liabilities of the Sellers' Pension Plans relating to the
Transferred Employees and to the employees of the Rolling Business whose
employment terminated prior to the Closing Date ("FORMER EMPLOYEES") in the
manner described below (the "TRANSFERRED BENEFITS"). Following completion of the
transfer of assets and liabilities from the Sellers' Pension Plans to the New
Defined Benefit Plans, the Sellers shall have no further liability whatsoever
with respect to the Former Employees and the Transferred Employees for benefits
under the Sellers' Pension Plans, other than liability for any breach of
fiduciary duties or any nonexempt prohibited transaction occurring prior to such
transfer. As of the Closing Date, the Sellers shall cause the Sellers' Pension
Plans to be amended so as to cease further accrual of benefits with respect to
the Former Employees and Transferred Employees. Section 6.03(b) of the
Disclosure Schedule lists all Former Employees together with relevant data
concerning their age, date of hire, date of termination and accrued pension
benefits.
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(c) As a condition of making the transfer of assets and
liabilities described below in this section, the Sellers and the Purchaser shall
be entitled to receive the following: (i) in the case of the Sellers, a
certificate from an officer or an opinion of counsel of the Purchaser
representing that the New Defined Benefit Plans meet the requirements for
qualification under Section 401(a) of the Code and that the Purchaser has timely
requested a determination letter from the Internal Revenue Service confirming
such qualification; (ii) in the case of the Purchaser, a certificate from an
officer or an opinion of counsel of the Sellers representing that the Sellers'
Plans have received a recent favorable determination from the Internal Revenue
Service to the effect that the Sellers' Plans meet such requirements for
qualification; and (iii) to Sellers' knowledge, there have been no amendments or
actions since the issuance of such favorable determination letter which
adversely affect such plans' qualifications.
(d) The Sellers shall cause Deloitte & Touche (the "SELLERS'
ACTUARY") to determine the amount of assets required by Section 414(l) of the
Code for the Transferred Benefits obligation based on allocating assets by
priority categories described in Section 4044(a) of ERISA (the "414(l) AMOUNT"),
to be transferred from the Sellers' Plans to the New Defined Benefit Plans. The
414(l) Amount shall be determined as of the Closing Date by the Sellers' Actuary
on the basis of the Pension Benefit Guaranty Corporation's safe harbor plan
termination assumptions set forth in Section 4044 of ERISA and the remaining
assumptions used in the most recent ERISA actuarial valuation of the Sellers'
Plans (the "SAFE HARBOR ASSUMPTIONS"). In connection therewith, the Sellers
shall cause the Sellers' Actuary to determine the amounts of charges and credits
to the funding standard account under Section 412 of the Code, the funding
standard account credit balance and the annual amortization charges and credits
(such amounts determined under the provisions of Internal Revenue Service
Revenue Ruling 81-212 and other applicable guidance) to be allocated between the
Sellers' Plans and the New Defined Benefit Plans as a result of the transfer of
assets and liabilities anticipated under this section. Such amounts shall be
determined without regard to use of the de minimis option contained in such
revenue ruling and the regulations promulgated under Section 414(l) of the Code.
The actuarial calculation of the liabilities by Pension Benefit Guaranty
Corporation priority categories underlying the 414(l) Amount determined by the
Sellers' Actuary shall be reviewed and verified by an actuarial firm designated
by the Purchaser (the "PURCHASER'S ACTUARY").
(e) As soon as practicable after the Closing Date, but in no
event later than 30 days from the Closing Date, the Sellers shall prepare and
file Form 5310A with respect to the transfer required by this section, and
within 60 days of the Closing Date, the Sellers shall cause to be transferred
from the trusts for the Sellers' Plans to the trusts established for the New
Pension Plans an amount in cash and marketable securities acceptable to the
parties equal to 80% of the amount reasonably estimated by the Sellers' Actuary
in good faith, after verification and approval by the Purchaser's Actuary, to be
equal to the 414(l) Amount; provided, however, that such estimated amount shall
be calculated prior to the last day of the month subsequent to the execution of
this Agreement (the "INITIAL TRANSFER AMOUNT"). As soon as practicable after the
final determination of the 414(l) Amount, calculated as of the Closing Date (the
"TRUE-UP DATE"), but in no event later than 6 months from the Closing Date, the
Sellers shall cause a second transfer to be made to the New Pension Plans in
cash and marketable securities acceptable to the parties, of the "TRUE-UP
AMOUNT". The True-Up Amount shall be equal to the
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414(l) Amount (A) minus the sum of (i) the Initial Transfer Amount and (ii)
distributions, if any, made with respect to Transferred Employees and Former
Employees from the Closing Date through the True-Up Date, and (B) plus earnings
in the Money Market Vehicle described in (g) below. Such True-Up Amount shall be
determined by the Sellers' Actuary, after verification and approval by the
Purchaser's Actuary. Once the Sellers' Actuary and the Purchaser's Actuary shall
reach agreement, the Sellers' Actuary shall verify that the completed transfers
comply with the requirements of Section 414(l). Nothing in this Section 6.03(e)
shall prevent the Sellers from filing the Form 5310A in their discretion prior
to the Closing Date.
(f) The Sellers' Actuary shall provide the Purchaser's Actuary
with the results of the calculations made under paragraphs (d) and (e) above and
with records and other information in support of such calculations as required
by the Purchaser's Actuary to verify and approve such calculations. The Sellers
and the Purchaser will cause their respective actuaries to work together in good
faith to promptly resolve any differences between them with respect to such
calculations. The expenses of the Sellers' Actuary shall be borne by the
Sellers, and the expenses of the Purchaser's Actuary shall be borne by the
Purchaser. In the event such differences cannot be resolved, the two actuaries
shall appoint a third actuary to resolve such differences, and the cost of such
third actuary shall be equally borne by the Sellers and the Purchaser. The
decision of such third actuary shall be final and binding on the Sellers and the
Purchaser.
(g) Notwithstanding any provisions to the contrary in this
Section 6.03, it is the intention of the parties that the Sellers shall attempt
to minimize the market risk from the Closing Date to the date the True Up Amount
is transferred (the "MARKET RISK PERIOD") by placing 125% of the Initial
Transfer Amount into a money market account or other fixed income investment
vehicle offered by the Sellers' Trustee on the Closing Date (the "MONEY MARKET
VEHICLE"), and it is agreed that the return on such investment during the Market
Risk Period shall be paid to the Purchaser's New Defined Benefit Plans at the
time of transfer of the True Up Amount. The Initial Transfer Amount and any
distributions made with respect to Transferred Employees and Former Employees
during the Market Risk Period shall be paid from the Money Market Vehicle.
Promptly after the date hereof the Sellers and the Purchaser shall contact the
PBGC and seek to have the PBGC terminate the PBGC Agreement and release the PBGC
lien on the Ravenswood Owned Real Property. If the PBGC does not terminate the
PBGC Agreement prior to the Closing or does not agree to postpone until after
the Closing the quarterly installment contributions to the Sellers' Pension
Plans described in Section 2(c)(ii) of the PBGC Agreement, and the Sellers are
required to make any such quarterly installment contribution before the Closing,
the Purchase Price shall be increased by the after-tax effective cost to the
Sellers of such contribution, multiplied by 78%, representing the agreed upon
share of such contribution attributable to the Transferred Benefits, plus
interest at 6% from the date of such contribution to the Closing Date.
SECTION 6.04. Welfare Benefit Plans. The Sellers shall be
responsible for providing COBRA benefits to all employees of the Rolling
Business whose employment terminated on or before the Closing Date, and for
providing COBRA notices to all Transferred
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Employees, as required by applicable law. Effective as of the Closing Date, the
Purchaser shall be responsible for all employee welfare plan benefits or
payments for Transferred Employees whether accruing before or after the Closing
Date. Except as provided in Section 6.05 on and after the Closing Date, the
Purchaser shall provide to the Transferred Employees such welfare benefit plans,
which are substantially comparable to those enjoyed by such Transferred
Employees immediately prior to the Closing Date which comply with applicable
collective bargaining agreements; provided, however, that nothing contained in
this Section 6.04 shall obligate or commit the Purchaser to continue any welfare
benefit plan, program or arrangement after the Closing Date for any particular
length of time, or to limit the right of the Purchaser to amend, modify,
suspend, revoke or terminate any such plan, subject, however, to the provisions
of any applicable collective bargaining agreement.
SECTION 6.05. Retiree Medical and Life Insurance Plans. On and
after the Closing Date, the Purchaser shall assume all retiree medical and life
insurance obligations of the Sellers for Transferred Employees and former
employees of the Rolling Business who are identified in Section 6.05 of the
Disclosure Schedule but only to the extent that such obligations relate to
claims that are accrued on the Closing Balance Sheet, and the Purchaser shall
provide to the Transferred Employees retiree medical and life insurance benefits
substantially comparable to those enjoyed by such employees immediately prior to
the Closing Date and in accordance with any applicable collective bargaining
agreement; provided, however, that nothing contained in this Section 6.05 shall
limit the right of the Purchaser to amend, modify, suspend, revoke or terminate
any such obligations or benefits, it being understood that the Sellers shall not
be liable to such former employees or Transferred Employees solely by reason of
the Purchaser's amendment, modification, suspension, revocation or termination
of obligations or benefits.
SECTION 6.06. Workers' Compensation Claims. Effective as of
the Closing Date, the Sellers agree to assign all workers' compensation
insurance policies relating to employees of the Business to the Purchaser. The
Purchaser agrees to assume all workers' compensation claims brought by employees
or former employees of the Rolling Business, including by Transferred Employees,
whether such claims accrue or are brought before or after the Closing Date, and
the Sellers shall have no further liability therefor on or after the Closing
Date.
SECTION 6.07. PBGC Agreement. (a) The Sellers and the
Purchaser agree that each Party will be entitled to participate in discussions
with the PBGC and will use commercially reasonable efforts to obtain, on or
prior to the Closing Date, the release of the Collateral described in the
Agreement made as of January 23, 1996, between Century, the PBGC and certain
other parties (the "PBGC AGREEMENT") which is related to the Rolling Business,
such that the PBGC no longer has a security interest in any Assets purchased
hereunder, provided, however, that the Sellers do not guaranty the release of
such security interest nor shall a release of such security interest be a
condition to Closing.
(b) Each of the Sellers and the Purchaser, respectively,
agrees to comply with any requirements set forth by the PBGC, including without
limitation payments, guarantees or
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the provision of other security to the extent, in the case of the Sellers, such
requirements apply to the Reduction Facility and in the case of the Purchaser to
the Rolling Business.
(c) The Purchaser and the Sellers agree to cooperate with each
other in attempting to effect the release of the Collateral described in (a)
above, including the disclosure of information relating to the Purchaser and the
Sellers and their Affiliates that may be requested by the PBGC in connection
with the PBGC's review of the transaction contemplated thereby.
SECTION 6.08. Management Services Agreement. The Sellers agree
that prior to the Closing Date, Century shall have entered into the Management
Services Agreement, under which Century agrees to provide the services of
certain key executives of Century on a limited basis to the Purchaser for a fee
after the Closing Date. Such services and the times the services shall be
provided are specified in such agreement.
SECTION 6.09. Incentive Plans. The Sellers shall be
responsible for all payments to any Transferred Employees under any incentive,
bonus, stock option, stock purchase or similar plans of the Sellers, and for the
payment of any benefits under such plans, which are accelerated, or become
payable, as a result of the Closing, and the Purchaser shall have no
responsibility for any such payments. The Purchaser shall have no responsibility
to continue any such plans after the Closing or to make any payments under such
plans.
SECTION 6.10. Employment Agreements. The Purchaser agrees to
assume the Employment Agreements disclosed in Section 3.22(a) of the Disclosure
Schedule, to the extent the same are in effect on the Closing Date with respect
to the Transferred Employees.
SECTION 6.11. 401(k) Plan. Effective as of the Closing Date,
Transferred Employees shall no longer actively participate in the Ravenswood
Aluminum Corp. United Steelworkers of America Savings Plan or the Ravenswood
Aluminum Corp. Salaried Employees Defined Contribution Plan (together, the
"SELLERS' DEFINED CONTRIBUTION PLANS"). Effective as of the Closing Date, the
Purchaser shall establish or make available one or more defined contribution
plans for Transferred Employees containing terms substantially identical (other
than employer stock terms) to those of the Sellers' Defined Contribution Plans
(the "PURCHASER'S DEFINED CONTRIBUTION PLANS") and in compliance with applicable
collective bargaining agreements and shall credit Transferred Employees for
their service with the Sellers for participation and vesting purposes under the
Purchaser's Defined Contribution Plans. As soon as practicable following the
Closing Date, and upon receipt by the Sellers and by the Purchaser of the
officer's certificates or opinions of counsel referred to below, the Sellers
shall cause to be transferred from the Sellers' Defined Contribution Plans to
the Purchaser's Defined Contribution Plans, and the Purchaser shall cause to be
received, assets equal to the finalized account balances of such Transferred
Employees who participated in the Sellers' Defined Contribution Plans. Effective
as of the Closing Date, the Sellers shall cause each Transferred Employee to be
fully vested in his or her account balance. The Sellers shall insure that such
Transferred Employees do not receive in service distributions from the Sellers'
Defined Contribution Plans in advance of such transfer. As a condition to such
transfer, the Sellers and the Purchaser shall each be entitled
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to receive from the other an officer's certificate or an opinion of counsel to
the effect that the Sellers' Defined Contribution Plans, and the Purchaser's
Defined Contribution Plans, as the case may be, either (a) have received a
recent favorable determination letter as to their qualification under the Code,
and nothing has occurred since the date of such letter which would cause the
loss of such qualification or (b) substantially complies by its terms with the
relevant qualification provisions of the Internal Revenue Code, and the plan
sponsor has timely applied for a favorable determination letter with respect to
the plans, and will make whatever changes to the plans as are requested by the
Internal Revenue Service as a condition of qualification.
SECTION 6.12. Century CP Plans. The Purchaser shall assume all
the rights and obligations of Century under the Acquisition Agreement made as of
December 22, 1998 between Alcoa and Century (the "ALCOA AGREEMENT") with respect
to Employee Matters described in Section 9.09 of the Alcoa Agreement.
SECTION 6.13. Century CP Pension Plan. (a) Effective as of the
Closing Date, the employees employed by Century CP (the "VERNON EMPLOYEES")
shall no longer participate in the relevant Alcoa defined benefit pension plans
(the "ALCOA PLANS"). Effective as of such date, the Purchaser shall establish
replacement defined benefit pension plans (the "NEW VERNON PLANS") in compliance
with applicable collective bargaining agreements that are intended to be
qualified under Section 401(a) of the Code, and related trusts that are intended
to be exempt from taxation under Section 501(a) of the Code for the benefit of
the Vernon Employees, the terms of which plans and trusts shall be substantially
comparable to the terms of the Alcoa Plans. The Purchaser agrees as soon as
practicable after the Closing Date to apply for, and take all actions necessary
to secure, determination letters from the Internal Revenue Service to the effect
that the New Vernon Plans are qualified under applicable provisions of the Code.
Assuming assets are transferred as provided in (b) below, the Purchaser shall
recognize the Vernon Employees' service prior to the Closing Date with Alcoa and
with the Sellers for all purposes under the New Vernon Plans.
(b) The Sellers agree, to the extent provided by the terms of
the Alcoa Agreement, to cause Alcoa to transfer assets on a timely basis from
the Alcoa Plans to the New Vernon Plans in accordance with the provisions of
Section 9.09(c)(3) of the Alcoa Agreement.
SECTION 6.14. Century CP Annual Performance Pay Plan. The
Sellers agree that the Closing Balance Sheet will show, as a liability of the
Business, amounts earned on a pro rata basis by the Vernon Employees who
participate in the Performance Pay Plan pursuant to the collective bargaining
agreement dated May 16, 1997 between UAW Local No. 808 and Century CP and the
Purchaser shall pay such amounts to such employees in accordance with the
collective bargaining agreements of Century CP following the delivery of the
Closing Balance Sheet.
ARTICLE VII
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TAX MATTERS
SECTION 7.01. Indemnity. (a) Each of Century and Century WV
agree, on a joint and several basis, to indemnify and hold the Purchaser,
Century CP and their Affiliates harmless from and against any and all of the
following Taxes (other than payroll and other employment taxes to the extent
accrued on the Closing Balance Sheet), including reasonable attorneys' and
accountants' fees and other reasonable out-of-pocket expenses incurred in
connection therewith: (i) Taxes imposed on or payable by Century CP or in
respect of the Rolling Assets with respect to taxable periods ending on or
before the Closing Date; (ii) with respect to taxable periods beginning before
the Closing Date and ending after the Closing Date, Taxes imposed on Century CP
or in respect of the Rolling Assets which are allocable, pursuant to Section
7.01(b) hereof, to the portion of such period ending on the Closing Date; (iii)
Taxes imposed on any member of an affiliated, consolidated, unitary or other
combined group with which Century CP files or has filed a Tax return in a period
ending on or prior to the Closing Date on a consolidated, unitary or other
combined basis or with which one or more of the Sellers file a Tax return on
such basis after the Closing Date; (iv) Taxes imposed on or payable by Century
CP as a result of (A) the Code section 338(h)(10) Election with respect to
Century CP referred to in Section 7.07 and (B) an actual or deemed election
under a state or local provision which is analogous or comparable to Code
Section 338(h)(10); (v) Taxes relating to any payments required to be made after
the Closing Date under any Tax indemnity, Tax sharing, or Tax allocation
agreement between the Sellers and Century CP under which Century CP was
obligated, or was a party, on or prior to the Closing Date; and (vi) Taxes
arising from the breach of any representation, warranty or covenant of the
Sellers with respect to Taxes under this Agreement. For purposes of this Section
7.01(a), the Sellers agree, on a joint and several basis, to indemnify the
Purchaser for any and all out-of-pocket costs and expenses (including reasonable
fees for attorneys and other outside consultants) incurred in connection with
any contest of any Tax liability for which the Sellers are liable under this
Article VII.
(b) In the case of Taxes that are payable with respect to a
taxable period that begins before the Closing Date and ends after the Closing
Date, the portion of any such Tax that is allocable to the portion of the period
ending on the Closing Date shall be:
(i) in the case of Taxes that are either (x) based upon or
related to income or receipts, or (y) imposed in connection with any
sale or other transfer or assignment of property (real or personal,
tangible or intangible) (other than conveyances pursuant to this
Agreement, as provided under Section 7.06), deemed equal to the amount
which would be payable if the taxable year ended with the Closing Date;
and
(ii) in the case of Taxes imposed on a periodic basis with
respect to the assets of the Sellers or any Subsidiary, or otherwise
measured by the level of any item, deemed to be the amount of such
Taxes for the entire period (or, in the case of such Taxes determined
on an arrears basis, the amount of such Taxes for the immediately
preceding period) multiplied by a fraction the numerator of which is
the number of calendar days in
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the period ending on the Closing Date and the denominator of which is
the number of calendar days in the entire period.
SECTION 7.02. Returns and Payments. From the date of this
Agreement through and after the Closing Date, the Sellers shall prepare and file
or otherwise furnish in proper form to the appropriate Governmental Authority
(or cause to be prepared and filed or so furnished) in a timely manner all Tax
returns, reports and forms ("RETURNS") relating to the Sellers, Century CP and
the Business that is due on or before or relates to any taxable period ending on
or before the Closing Date (and the Purchaser shall do the same for Returns
relating to Century CP and the Business with respect to any taxable period
ending after the Closing Date). Returns of Century CP and the Business not yet
filed for any taxable period that begins before the Closing Date shall be
prepared in a manner consistent with past practices employed with respect to
Century CP, but only if the preparation of such Returns in a manner inconsistent
with past practices would have a Material Adverse Effect on the non-preparing
party (except (i) to the extent counsel for the Sellers renders a legal opinion
stating that there is no reasonable basis in law therefor or that a Return
cannot be so prepared and filed without being subject to penalties or (ii) with
the consent of the Purchaser, which shall not be unreasonably withheld). With
respect to any Return required to be filed by the Purchaser or the Sellers with
respect to Century CP and the Business and as to which an amount of Tax is
allocable to the other party under Section 7.01(b), the filing party shall
provide the other party and its authorized representatives with a copy of such
completed Return and a statement certifying the amount of Tax shown on such
Return that is allocable to such other party pursuant to Section 7.01(b),
together with appropriate supporting information and schedules at least 20
Business Days prior to the due date (including any extension thereof) for the
filing of such Return, and such other party and its authorized representatives
shall have the right to review and comment on such Return and statement prior
the filing of such Return. The Sellers and the Purchaser agree to consult and
resolve in good faith any issue arising out of the review of any such Tax
Return. In the event the parties are unable to resolve any dispute within thirty
(30) days following the delivery of such Tax Return by the filing party to the
non-filing party, the parties shall resolve their dispute by jointly requesting
that a mutually acceptable accounting firm which is not the past or then current
principal auditors of the Purchaser or the Sellers resolve any issue before the
due date of such Tax Return, in order that such Tax Return may be timely filed.
The scope of the accounting firm's review shall be limited to the disputed
items. The Sellers and the Purchaser shall each pay one-half of the accounting
firm's fees and expenses.
SECTION 7.03. Tax Refunds and Credits. The Purchaser shall,
within forty-five (45) days following receipt of any tax refund, credit or
offset, pay to the Sellers the amount of any Tax refund or credit or offset
(including any interest paid or credited or any offset allowed with respect
thereto), but reduced by any Taxes that the Purchaser or Century CP shall be
required to pay with respect thereto, received or used, in the case of a credit
or offset, by the Purchaser or Century CP of Taxes (i) relating to taxable
periods or portions thereof ending on or before the Closing Date (including any
taxes allocated to such period under Section 7.01(b) hereof), or (ii)
attributable to an amount paid by the Sellers under Section 7.01(a) hereof. The
amount of any refunds or credits or offsets (including any interest paid or
credited with respect
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thereto) received by the Purchaser or Century CP shall be for the account of the
Purchaser if the refund, credit or offset is of Taxes relating to taxable
periods that begin after the Closing Date (including any taxes allocated to such
period under Section 7.01(b) hereof). The Purchaser may, for its own account,
claim a refund, credit or offset that relates to an adjustment to a taxable
period that begins before the Closing Date that arises from an adjustment to a
taxable period beginning on or after the Closing Date, provided, however, that
the Sellers must consent to any such refund claim, which consent may not be
unreasonably withheld (for this purpose, withholding of consent shall be
reasonable if such refund claim could reasonably be expected to have a material
tax cost or otherwise materially adversely affect the Sellers. The Purchaser
shall, if the Sellers so request and at the Sellers' expense, cause the relevant
entity to file for and use commercially reasonable efforts to obtain and
expedite the receipt of any refund to which the Sellers are entitled under this
Section 7.03, provided, however, that the Purchaser must consent to any such
refund claim, which consent may not be unreasonably withheld (for this purpose,
withholding of consent shall be reasonable if such refund claim could reasonably
be expected to have a material tax cost or otherwise materially adversely affect
the Purchaser, Century CP or any of their Affiliates).
SECTION 7.04. Time of Payment. Payment by the Sellers of any
amount due under this Article VII shall be made within thirty (30) days
following written notice by the Purchaser that payment of such amounts to the
appropriate Tax authority or other appropriate party is due; provided that in
the case of any payment due to a Tax authority or other appropriate party the
Sellers shall not be required to make any payment earlier than two days before
it is due to the appropriate Tax authority. In the case of a Tax that is
contested in accordance with the provisions of Section 7.08 (other than a Tax
contested in any administrative or judicial proceeding in which the Tax
contested must be paid prior to or upon commencement of such proceeding),
payment of the Tax to the appropriate Tax authority will not be considered to be
due earlier than the date a final determination has been made as defined in
Section 1313(a) of the Code or as finally determined pursuant to any similar
rule or provision of any relevant applicable Tax laws of any state, local,
foreign or other Tax jurisdiction (a "FINAL DETERMINATION").
SECTION 7.05. Cooperation and Exchange of Information. Upon
the terms set forth in Section 5.02, the Sellers and the Purchaser will provide
each other with such cooperation and information as either of them reasonably
may request of the other in facilitating an appraisal of the assets of the
Business, preparing and filing any Return, amended Return or claim for refund,
determining a liability for Taxes or a right to a refund of Taxes, participating
in or conducting any audit or other proceeding in respect of Taxes or making
representations to or furnishing information to parties subsequently desiring to
purchase all or a part of the Business from the Purchaser. Such cooperation and
information shall include providing copies of relevant Returns or portions
thereof, together with accompanying schedules, related work papers and documents
relating to rulings or other determinations by Tax authorities. The Sellers
shall make its employees available on a basis mutually convenient to both
parties to provide explanations of any documents or information provided
hereunder. Each of the Sellers and the Purchaser shall retain all Returns,
schedules and work papers, records and other documents in its possession
relating to Tax matters of the Business for each taxable period first ending
after the Closing Date
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and for all prior taxable periods until the later of (i) the expiration of the
statute of limitations of the taxable periods to which such Returns and other
documents relate, without regard to extensions except to the extent notified by
the other party in writing of such extensions for the respective Tax periods, or
(ii) six years following the due date (without extension) for such Returns. Any
information obtained under this Section 7.05 shall be kept confidential except
as may be otherwise necessary in connection with the filing of Returns or claims
for refund or in conducting an audit or other proceeding.
SECTION 7.06. Conveyance Taxes. The Sellers and the Purchaser
shall be equally liable for and each shall pay one-half of any real property
transfer or gains, sales, use, transfer, value added, stock transfer, and stamp
taxes, any transfer, recording, registration, and other fees, and any similar
Taxes which become payable in connection with the transactions contemplated by
this Agreement. The Sellers, after the review and consent by the Purchaser,
shall file such applications and documents as shall permit any such Tax to be
assessed and paid on or prior to the Closing Date in accordance with any
available pre-sale filing procedure. The Purchaser shall execute and deliver all
instruments and certificates necessary to enable the Sellers to comply with the
foregoing. The Purchaser shall complete and execute a resale or other exemption
certificate with respect to the inventory items sold hereunder, and shall
provide the Sellers with an executed copy thereof.
SECTION 7.07. Section 338(h)(10) Election. (a) Century and the
Purchaser shall jointly make a deemed asset sale election described under Code
section 338(h)(10) (the "CODE SECTION 338(h)(10) ELECTION") and shall make all
corresponding or similar elections under applicable state or local law with
respect to the qualified stock purchase of Shares by the Purchaser hereunder
(collectively, "ELECTIONS"). Century and the Purchaser shall file all such
Elections on a timely basis and comply with all rules and regulations applicable
to such Elections. Century and the Purchaser shall cooperate with each other to
take all actions necessary and appropriate (including filing such forms,
returns, elections, schedules and documents on a joint or separate basis as may
be required) to effect and preserve timely Elections in accordance with
applicable Treasury Regulations under Code section 338 and comparable state or
local laws.
(b) Within sixty (60) calendar days following the Closing
Date, the Purchaser will deliver to Century a completed Internal Revenue Service
Form 8023, and the required schedules thereto ("FORM 8023"), providing for the
Section 338(h)(10) Election. If, within 30 calendar days after the date of
Purchaser's delivery of the Form 8023, Century disputes one or more of the
allocations reflected in items 9a or 11a of Form 8023, Century will give written
notice to the Purchaser setting forth the allocations that Century believes
should be reflected on Form 8023 (but in no event will Century's allocations
reflected in items 9a and 11a of Form 8023 be less than that of the
Purchaser's), and Century and the Purchaser shall be bound by Century's
allocations so long as such allocations are consistent with the terms of this
Agreement, which allocations shall be contained in a revised Form 8023. If
Century reasonably disputes any other allocations or computations reflected on
the Form 8023, Century and the Purchaser will attempt in good faith to promptly
agree on a revised Form 8023. If the parties cannot resolve
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any such dispute within 30 Business Days of the delivery by the Purchaser of the
Form 8023 to Century, the items remaining in dispute shall be submitted to an
independent accounting firm of international reputation selected by, and
mutually acceptable to, Century and the Purchaser. If the independent accounting
firm so selected determines that the allocation with respect to any item or
items remaining in dispute is incorrect and that Century would be materially
adversely affected by the incorrectness of such allocation, then Century and the
Purchaser shall be bound by the allocation of such items as determined by the
independent accounting firm. Otherwise, the Purchaser and Century shall be bound
by the allocation with respect to such item or items as prepared by the
Purchaser. The independent accounting firm shall make any such determination
within 30 Business Days after submission of the remaining disputed items.
SECTION 7.08. Contests. (a) After the Closing Date, each of
the Sellers and the Purchaser shall promptly notify the other party in writing
upon receipt of written notice of the commencement of any Tax audit or
administrative or judicial proceeding or of any demand or claim on the Sellers,
the Purchaser or Century CP which, if determined adversely to the taxpayer or
after the lapse of time, would be grounds for indemnification by the other party
under Section 7.01. Such notice shall contain factual information (to the extent
known to the notifying party) describing the asserted Tax liability in
reasonable detail and shall include copies of any notice or other document
received from any taxing authority in respect of any such asserted Tax
liability. If the indemnitee under Section 7.01 fails to give the indemnitor
under Section 7.01 prompt notice of an asserted Tax liability as required by
this Section 7.08, then the indemnitor shall not have any obligation to
indemnify for any loss arising out of such asserted Tax liability but only to
the extent that failure to give such notice results in a detriment to the
indemnitor.
(b) In the case of an audit or administrative or judicial
proceeding that relates to periods ending on or before the Closing Date, the
Sellers shall have the sole right, at their expense, to control the conduct of
such audit or proceeding, but only to the extent that such audit or proceeding
relates to a Tax for which the Sellers have a potential indemnification
obligation under Section 7.01; provided, however, that if the results of such
contest could reasonably be expected to have a material Tax cost to the
Purchaser or Century CP for any taxable period including or ending after the
Closing Date, then the Sellers and the Purchaser shall jointly control the
defense and settlement of any such contest and each party shall cooperate with
the other party at its own expense and there shall be no settlement or closing
or other agreement with respect thereto without the consent of the other party,
which consent shall not be unreasonably withheld and, if the Sellers do not
assume the defense of any such audit or proceeding, the Purchaser may defend the
same in such manner as it may deem appropriate, including, but not limited to,
settling such audit or proceeding; provided, however, that the Purchaser shall
not settle any such audit or proceeding without the consent of the Sellers,
which consent shall not be unreasonably withheld. If the Sellers choose to
control the contest, the Purchaser shall promptly empower and shall cause
Century CP or other party promptly to empower (by power of attorney and such
other documentation as may be appropriate) such representatives of the Sellers
as they may designate to represent the Purchaser or Century CP or other party or
its successor in the contest insofar as the contest involves an asserted tax
liability for which the Sellers would be liable under Section 7.01. The
Purchaser shall have sole control over the defense and settlement of any contest
relating to taxable periods or portions thereof that begin on or after the
Closing Date (including, subject to Section 7.08(c) hereof, any Taxes allocated
to such period under Section 7.01(b) hereof) or relating to taxable periods or
portions thereof ending on or before the Closing Date
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provided the Taxes to which such contest relates are Taxes for which Sellers are
not liable under Section 7.01(a) hereof, provided, however, that if the results
of any such contest otherwise controlled by the Purchaser could reasonably be
expected to have a material Tax cost or otherwise materially adversely affect
the Sellers, then the Sellers and the Purchaser shall jointly control the
defense and settlement of any such contest and each party shall cooperate with
the other party at its own expense and there shall be no settlement or closing
or other agreement with respect thereto without the consent of the other party,
which consent shall not be unreasonably withheld.
(c) With respect to periods beginning before the Closing Date
and ending after the Closing Date, (i) each party may participate in an audit or
proceeding which relates to any such period and (ii) such audit or proceeding
shall be controlled by that party which would bear the burden of the greater
portion of the sum of the adjustment and any corresponding adjustments that may
reasonably be anticipated for future Tax periods; provided that neither party
shall settle any such audit or proceeding without the consent of the other,
which consent shall not be unreasonably withheld. The principle set forth in the
preceding sentence shall govern also for purposes of deciding any issue that
must be decided jointly (in particular, choice of judicial forum) in situations
in which separate issues are otherwise controlled hereunder by the Purchaser and
the Sellers.
(d) The Purchaser and the Sellers agree to cooperate, and the
Purchaser agrees to cause Century CP to cooperate, in the defense against or
compromise of any claim in any audit or proceeding.
(e) The Sellers shall promptly notify the Purchaser of the
commencement of any claim, audit, examination or other written change or
adjustment received by the Sellers, in each case relating to Century CP, by any
taxing authority which could reasonably be expected to affect the liability of
the Purchaser or Century CP for a material amount of Taxes, and the Sellers
shall keep the Purchaser informed of the progress thereof. The failure to
provide such notice shall not affect the indemnification obligations under this
Article VII unless the indemnified party is materially prejudiced as a result of
such failure.
SECTION 7.09. Miscellaneous. (a) The Sellers and the Purchaser
agree to treat all payments made under Section 2.09 and this Article VII and
under any other indemnity provision contained in this Agreement as adjustments
to the Purchase Price for Tax purposes and that such treatment shall govern for
purposes hereof.
(b) The covenants and obligations of parties under this
Article VII, and the representations and warranties of Sellers set forth in
Section 3.25 hereof, shall survive the Closing and shall remain in full force
and effect until the expiration of all statutes of limitations on assessment or
collection of Tax plus 180 days with respect to any Taxes that would be
indemnifiable by the Sellers under this Agreement.
(c) From and after the date of this Agreement, the Sellers
shall not without the prior written consent of the Purchaser (which consent may
not be unreasonably withheld) make,
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or cause or permit to be made, any Tax election not consistent with prior
practices that could be reasonably expected to have a Material Adverse Effect.
(d) The Sellers and the Purchaser agree that the fair market
value of the assets of Century CP, in the aggregate, generally equals the
adjusted tax basis in those assets as of the date of this Agreement.
(e) For purposes of this Article VII, all references to the
Purchaser, the Sellers, Century CP and the Subsidiaries include successors.
(f) All tax sharing agreements or similar agreements with
respect to or involving the Sellers and Century CP shall be terminated with
respect to Century CP as of the Closing Date and, after the Closing Date,
Century CP shall not be bound thereby or have any liability thereunder.
ARTICLE VIII
CONDITIONS TO CLOSING
SECTION 8.01. Conditions to Obligations of the Sellers.
Subject to the proviso in Section 10.01(b), the obligations of the Sellers to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment, at or prior to the Closing, of each of the following
conditions:
(a) Representations, Warranties and Covenants. (i) The
representations and warranties of the Purchaser contained in this
Agreement shall be true and correct as of the Closing, with the same
force and effect as if made as of the Closing Date; except to the
extent that any inaccuracies as of the Closing Date in the
representations and warranties would not be reasonably likely to have,
individually or in the aggregate, a material adverse effect on the
ability of the Purchaser to consummate the transactions contemplated by
this Agreement (provided that for purposes of determining whether any
representation or warranties are inaccurate as of the Closing Date any
representation or warranty that is qualified by a standard of
materiality shall be required to be true in all respects without giving
effect to such materiality standard), (ii) the covenants and agreements
contained in this Agreement to be complied with by the Purchaser on or
before the Closing shall have been complied with in all material
respects, and (iii) the Sellers shall have received a certificate from
the Purchaser to such effect signed by a duly authorized officer
thereof;
(b) HSR Act. Any waiting period (and any extension thereof)
under the HSR Act applicable to the purchase of the Assets contemplated
by this Agreement shall have expired or shall have been terminated;
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(c) No Proceeding or Litigation. No Action shall have been
commenced by or before any Governmental Authority against either the
Sellers or the Purchaser, seeking to restrain or materially and
adversely alter the transactions contemplated by this Agreement which
is reasonably likely to render it impossible or unlawful to consummate
such transactions; provided, however, that the provisions of this
Section 8.01(c) shall not apply if the Sellers have directly or
indirectly solicited or encouraged any such Action;
(d) Ancillary Agreements. The Purchaser shall have executed
and delivered to the Sellers each of the Ancillary Agreements to which
it or any of its Affiliates is a party;
(e) Resolutions of the Purchaser. The Sellers shall have
received a true and complete copy, certified by a duly authorized
officer of the Purchaser, of the resolutions duly and validly adopted
by the Board of Directors of the Purchaser evidencing its authorization
of the execution and delivery of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby
and thereby.
SECTION 8.02. Conditions to Obligations of the Purchaser.
Subject to the proviso in Section 10.01(a), the obligations of the Purchaser to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment, at or prior to the Closing, of each of the following
conditions:
(a) Representations, Warranties and Covenants. (i) The
representations and warranties of the Sellers contained in this
Agreement shall be true and correct as of the Closing with the same
force and effect as if made as of the Closing, except to the extent
that any inaccuracies as of the Closing Date in the representations and
warranties would not be reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect (provided that for purposes of
determining whether any representations or warranties are inaccurate as
of the Closing Date any representation or warranty that is qualified by
a standard of materiality shall be required to be true in all respects
without giving effect to such materiality standard; provided that
solely for purposes of this Section 8.02(a), if there is any
circumstance, change in or effect on the Business whose adverse effect
on the Business is monetary, such circumstance, change or effect shall
be deemed to be a Material Adverse Effect if such monetary liability is
greater than $15,000,000); (ii) the covenants and agreements contained
in this Agreement to be complied with by the Sellers on or before the
Closing shall have been complied with in all material respects except
that the Sellers shall have complied in all respects with their
obligations under Article II hereof, and (iii) the Purchaser shall have
received a certificate of the Sellers to such effect signed by duly
authorized officers thereof;
(b) HSR Act. Any waiting period (and any extension thereof)
under the HSR Act applicable to the purchase of the Assets contemplated
hereby shall have expired or shall have been terminated;
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(c) No Proceeding or Litigation. No Action shall have been
commenced by or before any Governmental Authority against either the
Sellers or the Purchaser, seeking to restrain or materially and
adversely alter the transactions contemplated by this Agreement which
is reasonably likely to render it impossible or unlawful to consummate
such transactions or which would be reasonably likely to have a
Material Adverse Effect; provided, however, that the provisions of this
Section 8.02(c) shall not apply if the Purchaser has solicited or
encouraged any such Action;
(d) Resolutions of the Sellers. The Purchaser shall have
received a true and complete copy, certified by the Secretary or an
Assistant Secretary of each of the Sellers, of the resolutions duly and
validly adopted by the Board of Directors of each of the Sellers and
the stockholders of Century WV evidencing their authorization of the
execution and delivery of this Agreement and the Ancillary Agreements
to which it is a party and the consummation of the transactions
contemplated hereby and thereby;
(e) Consents and Approvals. The Purchaser and the Sellers
shall have received, each in form and substance reasonably satisfactory
to the Purchaser, all authorizations, consents, orders and approvals of
all Governmental Authorities and officials which are necessary for the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements or for the conduct of the Business by the
Purchaser immediately after giving effect to the Closing, except where
the failure to obtain any such authorizations, consents, orders or
approvals would not be reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect after giving effect to
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements;
(f) Resignations. The Purchaser shall have received the
resignations, effective as of the Closing, of all directors and
officers of Century CP, except for such persons as shall have been
designated in writing prior to the Closing by the Purchaser to the
Sellers;
(g) Minute Books. The Purchaser shall have received a copy of
the minute books and stock register of Century CP, certified by the
Secretary or Assistant Secretary of Century CP, as of the Closing;
(h) Good Standing; Qualification to Do Business. The Purchaser
shall have received good standing certificates for Century CP from the
secretary of state of the jurisdiction in which such entity is
incorporated or organized and from the secretary of state in each other
jurisdiction in which the failure of Century CP to qualify to do
business as a foreign corporation would be reasonably likely to have a
material and adverse effect on the business of Century CP, in each case
dated as of a date not earlier than ten Business Days prior to the
Closing Date and accompanied by bring-down telegrams dated the Closing
Date;
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(i) Ancillary Agreements. Each of the Sellers or its
Affiliates shall have executed and delivered to the Purchaser each of
the Ancillary Agreements to which a Seller or any of its Affiliates is
a party;
(j) No Material Adverse Effect. No circumstance, change in, or
effect on the Business shall have occurred which has or, with the
passage of time is reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect; provided that to the extent any
such circumstance, change or effect on the Business results in an
inaccuracy as of the Closing Date in the representations and warranties
of the Sellers, such circumstance, change or effect shall not be
separately considered under this Section 8.02(j) for purposes of
determining whether a Material Adverse Effect has occurred or is
reasonably expected to occur;
(k) New Collective Bargaining Agreement. The collective
bargaining agreement with the United Steelworkers of America (the
"USWA") entered into and agreed upon by Century WV effective June 1,
1999 and the terms thereof are effective and binding on the parties and
have not been amended since such date;
(l) Major Customer. (i) The Major Customer shall have
consented to the assignment to the Purchaser of the Sellers' rights and
obligations under the agreements entered into with such Major Customer
and the Major Customer shall not have terminated or materially and
adversely altered, or given notice that it intends to terminate or
materially and adversely alter, its commercial arrangements with the
Business and (ii) The Lockheed Martin Corporation ("LOCKHEED") shall
have consented to the assignment to the Purchaser of Century WV's
rights and obligations under the agreements entered into with Lockheed
in October 1998;
(m) Taxes and Fees. The Sellers shall have paid one-half of
all transfer, deed, gains, stamp and all other similar taxes and
special assessments and recording charges, if any;
(n) Title Policy. The Purchaser shall have received, at its
sole cost and expense, an owner's form of policy or policies of title
insurance, dated or updated to the Closing Date (the "TITLE POLICY")
with liability in the amount reasonably specified by the Purchaser,
insuring that the Purchaser has a good and marketable fee estate in and
to the Owned Real Property subject only to the Permitted Encumbrances
and the Permitted Property Encumbrances. The Title Policy shall be
issued by a title company satisfactory to the Purchaser (the "TITLE
COMPANY"), and shall insure (to the extent insurable) any easements,
leasehold estates or other matters appurtenant to or benefitting the
Owned Real Property as part of the insured estate. In the event
delivery of the Title Policy is not possible as of the Closing,
Purchaser shall have received at the Closing the irrevocable and
unconditional binding commitment of the Title Company to issue the
Title Policy in the form of a so-called "pro-forma policy", or "marked
binder";
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(o) Title Indemnity. The Sellers shall have provided to the
Title Company a "gap" indemnity, indemnifying the Title Company against
matters affecting title (other than Permitted Encumbrances) between the
Closing Date and the date of recordation of the Deed or Deeds;
(p) Title Proof. The Sellers shall have provided to the Title
Company such reasonable and customary title affidavits, indemnities,
undertakings and "proofs" as may be customary in the jurisdiction in
which the Owned Real Property is situated or as may be reasonably
required by the Title Company;
(q) Survey. The Purchaser shall have received, at least ten
(10) days prior to the Closing, at the Sellers' sole cost and expense,
an "as-built" survey or surveys of the Owned Real Property reasonably
satisfactory to the Purchaser, certified to the Purchaser and the Title
Company by a licensed surveyor approved by the Purchaser, dated or
updated not earlier than sixty (60) days prior to the Closing,
complying with the latest edition of the ALTA and ASCM Minimum Standard
Detail Requirements for Land Title Surveys, including Table A items
reasonably requested by the Purchaser;
(r) Easements. The Sellers, at their sole cost and expense,
shall have executed, acknowledged and recorded such easements as shall
be necessary for the Purchaser to operate the Business, including,
without limitation, those easements contemplated in Schedule 8.02(r);
(s) Conveyance. The conveyance of the Owned Real Property
shall be in compliance with all material zoning, subdivision, land use,
and other Laws, and the Owned Real Property shall be assessed as a
separate tax lot for real property tax assessment purposes;
(t) Certificate of Non-Foreign Status. The Purchaser shall
have received a certificate from the Sellers (which complies with
Section 1445 of the Code) of non-foreign status executed in accordance
with the provisions of the Foreign Investment in Real Property Tax Act;
and
(u) Utilities. The Purchaser shall have rights to obtain from
the utility provider utilities on terms and conditions, including cost,
similar to those currently in effect.
(v) Environmental Permits. All Environmental Permits required
for the Purchaser, as the new owner of the Assets, to conduct the
Business as of the Closing shall be in full force and effect except (i)
as would not be reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect, and (ii) as would not materially
and adversely affect the Purchaser's ability to operate the Business.
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ARTICLE IX
INDEMNIFICATION
SECTION 9.01. Survival of Representations and Warranties. The
representations and warranties of the Purchaser and the Sellers contained in
this Agreement shall survive the Closing until the second anniversary thereof;
provided, however, that (a) the representations and warranties of the Sellers
dealing with Tax matters shall survive as provided in Article VII, (b) insofar
as any claim is made by the Purchaser for the breach of any representation or
warranty of the Sellers contained herein relating to environmental matters, such
representations and warranties shall, for purposes of such claims by the
Purchaser, survive the Closing until the sixth anniversary of the Closing, and
(c) the representations and warranties contained in Section 3.01 (other than the
second sentence thereof) shall survive the Closing until the fourth anniversary
thereof. Neither the period of survival nor the liability of the Sellers with
respect to the Sellers' representations and warranties shall be reduced by any
investigation made at any time by or on behalf of the Purchaser. If written
notice of a claim has been given in good faith prior to the expiration of the
applicable representations and warranties by the Purchaser to the Sellers
pursuant to Section 9.04, then the relevant representations and warranties shall
survive as to such claim until the claim has been finally resolved.
SECTION 9.02. Indemnification by the Sellers. (a) Subject to
Section 9.01, the Sellers shall, jointly and severally, indemnify, defend and
hold harmless the Purchaser and its Affiliates, officers, directors, employees,
agents, successors and assigns (each a "PURCHASER INDEMNIFIED PARTY") for any
and all Liabilities, losses, damages, claims, costs and expenses, interest,
awards, judgments and penalties (including, without limitation, reasonable
attorneys' and consultants' fees and expenses) actually suffered or incurred
(including, without limitation, any Action brought or otherwise initiated by any
of them) (hereinafter a "LOSS") by them, arising out of or resulting from:
(i) the breach of any representation or warranty made by the
Sellers contained in this Agreement (other than in respect of Taxes and
other amounts indemnified against under Article VII, it being
understood that the rights and obligations of the parties with respect
to indemnification for any and all Tax matters shall be governed by
Article VII); or
(ii) the breach of any covenant or agreement by the Sellers
contained in this Agreement (other than any covenant in Article VII, it
being understood that the rights and obligations of the parties with
respect to indemnification for any and all Tax matters shall be
governed by Article VII); or
(iii) with the exception of Losses associated with items set
forth in Section 3.16(a) of the Disclosure Schedule, (A) any Releases
of Hazardous Material requiring an investigation or remediation under
any applicable Environmental Law at, on, under, migrating from (but
only to the extent migrating on or prior to the Closing) or to, or
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transported from (but only to the extent transported on or prior to the
Closing) the Real Property, or any property formerly owned, leased,
occupied or used by the Sellers, Century CP or the Business but only
during the period in which such former property was owned, leased,
occupied or used by any such Person, in any such case on or prior to
the Closing; or any continuing migration of such Hazardous Material
from the Real Property after the Closing (including, without
limitation, any Remedial Action at any time after the Closing relating
to such Hazardous Material), except (I) in respect of matters set forth
in Section 3.16(a) of the Disclosure Schedule, if the Purchaser's
actions or inactions are the cause of such off-site migration or (II)
in respect of any other pre-Closing disposal or Release at the Real
Property, if the Purchaser's negligence is the cause of such off-site
migration; (B) any Environmental Claim arising at any time that relates
to the Sellers, Century CP, the Business or the Real Property on or
prior to the Closing; or (C) any noncompliance with or violation of any
applicable Environmental Law or Environmental Permit relating in any
way to the Sellers or the Business on or prior to the Closing, or any
continuation of such violation or non-compliance after the Closing; or
(iv) Liabilities relating to or arising from employee claims
described in Section 2.02(b)(iv) to the extent such claims exceed the
amount described in such Section; or
(v) without prejudice to Section 6.07, any action taken by the
PBGC relating to the defined benefit pension plans maintained prior to
the Closing by the Sellers for the Transferred Employees or to the
assets of the Sellers which are not the Shares and Rolling Assets
purchased hereunder; or
(vi) Liabilities arising from or related to any failure to
comply with laws relating to bulk transfers or bulk sales with respect
to the transactions contemplated by this Agreement; or
(vii) the Excluded Liabilities; or
(viii) except as otherwise provided in Article VI, Liabilities
for benefits, or under any of Century CP's Plans; or
(ix) Liabilities relating to or arising out of Actions brought
against Century CP (other than worker's compensation claims) associated
with employment actions, omissions or events, including, without
limitation, employment discrimination claims, and claims for workplace
related injuries by employees which occurred or were incurred or
accrued on or before the Closing Date, but only to the extent such
Liabilities (together with all Liabilities relating to or arising from
employee claims described in Section 2.02(b)(iv)), individually or in
the aggregate, exceeded $600,000; or
(x) all Liabilities of Century CP in the nature of product
liability claims relating to or arising out of allegations of personal
injury or property damage suffered by any third party (A) on or prior
to the Closing Date or (B) attributable to products sold or
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shipped, or Inventory purchased or manufactured, in each case in
respect of the conduct of the Rolling Business on or prior to the
Closing Date; or
(xi) Liabilities under Environmental Laws relating to or
arising out of (A) Hazardous Material transported from the Vernon Owned
Real Property pre-Closing; (B) any off-site migration of Hazardous
Material resulting from any pre-Closing off-site disposal or Release of
such Hazardous Material; (C) any off-site migration of Hazardous
Material from the Vernon Owned Real Property resulting from any
pre-Closing disposal or Release at the Vernon Owned Real Property,
except (I) in respect of matters set forth in Section 3.16(a) of the
Disclosure Schedule, if the Purchaser's actions or inactions are the
cause of such off-site migration or (II) in respect of any other
pre-Closing disposal or Release at the Vernon Owned Real Property, if
the Purchaser's negligence is the cause of such off-site migration; and
(D) any on-site PCB contamination existing or occurring on or before
the Closing at the Vernon Owned Real Property, or any off-site PCB
contamination, whether existing or occurring before or after the
Closing, resulting from or arising out of operations at the Vernon
Owned Real Property on or before the Closing, in each case requiring
investigation or remediation or other action under applicable
Environmental Law; it being understood that for purposes of this clause
9.02(a)(xi)(D), "Environmental Laws" include regulations adopted by the
State of California or a subdivision thereof after the Closing Date
pursuant to statutes enacted before the Closing Date; or
(xii) Indebtedness of Century CP, other than obligations under
equipment leases that have, or should have, been recorded as capital
leases.
(b) To the extent that the Sellers' undertakings set forth in
this Section 9.02 may be unenforceable, each Seller shall contribute the maximum
amount that it is permitted to contribute under applicable Law to the payment
and satisfaction of all Losses incurred by a Purchaser Indemnified Party.
(c) The Sellers shall not be required to indemnify any
Purchaser Indemnified Party under (1) Section 9.02(a)(i) (except to the extent a
claim relates to or arises from the breach of any representation or warranty
contained in Sections 3.01 (other than the second sentence thereof) or 3.31),
(2) Section 9.02(a)(ii), (3) Section 9.02(a)(iii) (except to the extent a claim
relates to or arises from the Excluded Liabilities set forth in Section
2.02(b)(vi) (other than Section 2.02(b)(vi)(C) or Section 9.02(a)(xi) (other
than Section 9.02(a)(xi)(C)), for which there is no indemnity limit) and (4)
Section 9.02(a)(v), unless (x) such claim or demand involves Losses in excess of
$50,000 and (y) the aggregate amount of all Losses for which indemnity is due
exceeds $2,000,000, after which (subject to Section 9.06) the Sellers shall be
obligated for all Losses of the Purchaser Indemnified Parties in excess of such
amount. Claims or demands which are based on the same or similar or related
facts shall be treated as a single claim when determining whether the threshold
set out in Section 9.02(c)(x) has been reached. Any indemnifiable liability with
respect to any breach or non-performance by the Sellers of a representation,
warranty or covenant shall be limited to the amount of damages sustained by a
Purchaser Indemnified Party by reason of such breach or non-performance net of
any reserves provided for such liability on the Reference Balance Sheet.
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SECTION 9.03. Indemnification by the Purchaser. (a) Subject to
Section 9.01, the Purchaser shall indemnify, defend and hold harmless the
Sellers and their Affiliates (other than Century CP), officers, directors,
employees, agents, successors and assigns (each a "SELLER INDEMNIFIED PARTY")
for any and all Losses actually suffered or incurred by them, arising out of or
resulting from:
(i) the breach of any representation or warranty made by the
Purchaser contained in this Agreement; or
(ii) the breach of any covenant or agreement by the Purchaser
contained in this Agreement (including, without limitation, any
covenant in Article VII); or
(iii) any liabilities or obligations resulting from or arising
out of the conduct of the Business on or after the Closing Date, except
for any liabilities or obligations with respect to which the Sellers
are obligated to indemnify a Purchaser Indemnified Party; or
(iv) any action taken by the PBGC relating to the New Defined
Benefit Plans or to the Shares and Rolling Assets purchased hereunder;
or
(v) liabilities and obligations arising from employee claims
described in Section 2.02(a)(iii) to the extent such claims do not
exceed the amounts described in such Section.
(b) To the extent that the Purchaser's undertakings set forth
in this Section 9.03 may be unenforceable, the Purchaser shall contribute the
maximum amount that it is permitted to contribute under applicable Law to the
payment and satisfaction of all Losses incurred by a Seller Indemnified Party.
SECTION 9.04. Notification of Claims. (a) A party that may be
entitled to be indemnified pursuant to Section 9.02 or 9.03 (the "INDEMNIFIED
PARTY") shall promptly notify the party liable for such indemnification (the
"INDEMNIFYING PARTY") in writing of any pending or threatened claim or demand
which the Indemnified Party has determined has given or could give rise to a
right of indemnification under this Agreement (including a pending or threatened
claim or demand asserted by a third party ("THIRD PARTY CLAIMS") against the
Indemnified Party), describing in reasonable detail the facts and circumstances
with respect to the subject matter of such claim or demand; provided, however,
that the failure to provide such notice shall not release the Indemnifying Party
from any of its obligations under this Article IX except to the extent the
Indemnifying Party is materially prejudiced by such failure. Subject to the
Indemnifying Party's right to defend in good faith Third Party Claims as
hereinafter provided, the Indemnifying Party shall (whether in respect of a
claim which is not a third party claim or in respect of a Third Party Claim)
satisfy or contest its obligations under this Article IX within 15 days after
the receipt of written notice thereof from the Indemnified Party.
(b) If the Indemnifying Party acknowledges in writing its
obligation to indemnify the Indemnified Party hereunder against any Losses that
may result from such Third Party Claim, then the Indemnifying Party shall be
entitled to assume and control the defense of such Third Party Claim at its
expense and through counsel of its choice if it gives notice of its
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intention to do so to the Indemnified Party within 15 days of the receipt of
such notice from the Indemnified Party; provided, however, that the Indemnified
Party may participate in such defense and retain separate counsel at its own
cost and expense, without prejudice to the rights of the parties to control the
defense of their respective interests. In the event the Indemnifying Party
exercises the right to undertake any such defense against any such Third Party
Claim as provided above, the Indemnified Party shall cooperate with the
Indemnifying Party in such defense and make available to the Indemnifying Party,
at the Indemnifying Party's expense, all witnesses, pertinent records, materials
and information in the Indemnified Party's possession or under the Indemnified
Party's control relating thereto as is reasonably required by the Indemnifying
Party. Similarly, in the event the Indemnified Party is, directly or indirectly,
conducting the defense against any such Third Party Claim, the Indemnifying
Party shall cooperate with the Indemnified Party in such defense and make
available to the Indemnified Party, at the Indemnifying Party's expense, all
such witnesses, records, materials and information in the Indemnifying Party's
possession or under the Indemnifying Party's control relating thereto as is
reasonably required by the Indemnified Party. No such Third Party Claim may be
settled by the Indemnifying Party without the written consent of the Indemnified
Party (which consent shall not be unreasonably withheld).
SECTION 9.05. Limits on Environmental Indemnification. (a) The
Purchaser and the Sellers, as the case may be, may investigate, or cause to be
investigated, the existence or the nature or extent of any release of Hazardous
Materials and conduct any Remedial Action at or from the Real Property if such
investigation is required by applicable Environmental Laws. The Sellers and the
Purchaser shall consult with a view to determining what Remedial Action, if any
is required, and any Remedial Action and any compliance activities shall be
designed to assure the most cost effective action possible, consistent with
applicable Environmental Laws. Any payments or expenses expended as required by
a Governmental Order, a written demand for remedial or compliance action or a
written demand for payment by any Governmental Authority shall be deemed to be
consistent with the exercise of reasonable business judgment. The Purchaser
shall mitigate to the extent practicable, any environmental Loss for which
indemnification is claimed. If the Purchaser, by expenditure of money,
reasonably can mitigate or otherwise reduce or eliminate any environmental Loss
for which indemnification otherwise would be claimed, the Purchaser shall take
such action and shall be entitled to prompt reimbursement from the Sellers for
such expenditures and all related expenses.
(b) If the Purchaser and the Sellers are unable, after
reasonable inquiry, to determine whether a particular environmental Loss falls
within Section 9.02(a)(iii) ("SECTION 9.02(A)(III) LOSS") or Section 9.03
("SECTION 9.03 LOSS"), the parties shall refer the matter to a mutually
acceptable environmental lawyer (the "INDEPENDENT EXPERT"). The Independent
Expert shall be experienced in the environmental issues involved in the dispute
and shall not in the past have been engaged by either the Purchaser or the
Sellers and shall not otherwise be affiliated with either the Purchaser or the
Sellers. Within ten (10) Business Days following the selection of the
Independent Expert the Purchaser and the Sellers shall each submit to such
Independent Expert, in writing not to exceed ten (10) pages in length, such
party's proposed resolution of the matter in question, together with reasonable
documentary evidence supporting such proposed resolution. The Independent Expert
shall have the authority to request additional facts or evidence from each of
the parties, and if such Independent Expert so requires, a hearing to present
the same. The Independent Expert, shall within 40 Business Days from his or her
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appointment, make a determination as to whether, and to what extent, such Loss
(i) is a Section 9.02(a)(iii) Loss, (ii) is a Section 9.03 Loss or (iii) in his
or her expert opinion, cannot be clearly determined to be either a Section
9.02(a)(iii) Loss or a Section 9.03 Loss in whole or in part. The Independent
Expert's determination shall be final and binding on the parties. The costs and
expenses of the Independent Expert shall be shared equally by the parties.
(c) If the Independent Expert cannot clearly determine whether
a particular Loss is, in whole or in part, a Section 9.02(a)(iii) Loss or a
Section 9.03 Loss, the Sellers and the Purchaser will indemnify each other so as
to allocate responsibility between themselves, according to the time when such
Loss occurs, as follows:
<TABLE>
<CAPTION>
Time Loss Occurs Sellers' Share of Purchaser's Share of
- ---------------- ----------------- --------------------
Responsibility Responsibility
-------------- --------------
<S> <C> <C>
From the Closing Date through one year 100% 0%
after the Closing Date
Thereafter through two years after the 83.3% 16.7%
Closing Date
Thereafter through three years after 67.7% 33.3%
the Closing Date
Thereafter through four years after 50% 50%
the Closing Date
Thereafter through five years after 33.3% 67.7%
the Closing Date
Thereafter through six years after the 16.7% 83.3%
Closing Date
After six years of the Closing Date 0% 100%
</TABLE>
SECTION 9.06. Limits on Indemnification. Notwithstanding
anything to the contrary contained in this Agreement, the maximum amount of
indemnifiable Losses which may be recovered from the Sellers arising out of or
resulting from the causes enumerated in (a) Section 9.02(a)(i) (with the
exception of any Losses relating to arising from the breach of any
representation or warranty contained in Sections 3.01 (other than the second
sentence thereof) or 3.31) or (b) Section 9.02(a)(iii) (with the exception of
any Losses relating to or arising from the Excluded Liabilities set forth in
Section 2.02(b)(vi) (other than Section 2.02(b)(vi)(C)) or Section 9.02(a)(xi)
(other than Section 9.02(a)(xi)(C)) for which there is no indemnity limit) shall
be an amount equal to $25,000,000.
SECTION 9.07. Indemnification Agreements. The parties hereto
agree that to the extent the Purchaser or any other Purchaser Indemnified Party
may be entitled to indemnification pursuant to either the Vernon Indemnity
Agreement or the Ravenswood Indemnity Agreement,
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on the one hand, or this Agreement, on the other hand, the Purchaser or any
other Purchaser Indemnified Party, as the case may be, shall be entitled to seek
indemnification under any one or more of such agreements; provided that to the
extent a claim is made under one or more of such agreements, the validity of
such claim shall be determined separately under each such agreement and to the
extent valid under more than one such agreement, the Purchaser may elect under
which agreement or agreements the Sellers shall make such indemnification
payment (and any amounts payable in respect of such claim shall be determined in
accordance with the terms and conditions of the agreement or agreements
designated by the Purchaser and such amounts paid shall not be taken into
consideration for purposes of determining the deductible or the maximum amount
recoverable under any other agreement), provided that any recovery in respect of
such claim shall be limited to the amount of Loss in respect of such claim.
SECTION 9.08. Exclusive Remedies. The parties hereto
acknowledge and agree that following the Closing the indemnification provisions
of this Article IX, the Vernon Indemnity Agreement and the Kaiser Indemnity
Agreement shall be the sole and exclusive remedies of, on the one hand, the
Sellers against the Purchaser, and on the other hand, the Purchaser against the
Sellers, for any breach of the representations, warranties, covenants or
agreements herein or therein (as applicable in accordance with the terms of the
indemnity provisions of each such agreement), except (i) for performance of the
obligations set forth in Article II and Sections 5.03, 5.07, and 5.12, (ii) for
performance of the obligations set forth in Article VII, as to which the
obligations of the parties with respect to indemnification shall be exclusively
governed by Article VII, (iii) for injunctive relief or specific performance to
the extent available at Law, and (iv) in the event of willful breach, willful
misrepresentation or fraud.
SECTION 9.09. Sellers' Indemnity Support. The parties hereto
agree that for so long as and at such times as the consolidated net worth of
Century is less than $200,000,000, at the Seller's option:
(a) for so long as the Purchaser shall be entitled to be
indemnified pursuant to Article VII or Article IX, the Vernon Indemnity
Agreement or the Ravenswood Indemnity Agreement, upon delivery pursuant
to Article VII or Section 9.04, the Vernon Indemnity Agreement or the
Ravenswood Indemnity Agreement by a Purchaser Indemnified Party of a
notice regarding an indemnification claim or potential claim, the
Purchaser is hereby authorized at any time and from time to time, to
the fullest extent permitted by Law, to set off (for so long as such
claim is pending) against any and all amounts due and payable by the
Purchaser to the Sellers under this Agreement, any Ancillary Agreement
or otherwise an amount equal to the amount of such claim, but in no
event shall any such set-off pursuant to this Section 9.09(a) exceed
$5,000,000; provided that the Purchaser shall promptly return any
amount set off (plus interest thereon accruing at the average of the
prime rate applicable during the period of set off) if and to the
extent a court or judicial body of applicable jurisdiction shall
determine that the Sellers are not liable to the Purchaser Indemnified
Party for such claim; or
(b) the Sellers shall obtain (and maintain in effect for so
long as the Purchaser shall be entitled to be indemnified pursuant to
Article VII or IX, the Vernon Indemnity Agreement or the Ravenswood
Indemnity Agreement) an insurance policy, in form and substance
reasonably satisfactory to the Purchaser, issued in favor of the
Purchaser and its Affiliates from an insurer acceptable to the
Purchaser, in its reasonable judgment,
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providing at least $5,000,000 of coverage for amounts that are payable
by the Sellers to a Purchaser Indemnified Party pursuant to the
indemnification provisions set forth in Article VII or IX, the Vernon
Indemnity Agreement or the Ravenswood Indemnity Agreement; and the
Sellers and the Purchaser agree that the Sellers, on the one hand, and
the Purchaser, on the other hand, shall each pay one half of the
premiums payable in connection with obtaining and maintaining such
insurance policy; provided that in no event shall the Purchaser be
required to pay more than $100,000 in the aggregate in premiums or
other payments in connection with obtaining and maintaining such
insurance policy.
ARTICLE X
TERMINATION AND WAIVER
SECTION 10.01. Termination. This Agreement may be terminated
at any time prior to the Closing:
(a) by the Purchaser, if between the date hereof and the time
scheduled for the Closing, any Seller or Subsidiary makes a general
assignment for the benefit of creditors, or any proceeding shall be
instituted by or against any Seller or Subsidiary seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding up or
reorganization, arrangement, adjustment, protection, relief or
composition of its debts under any Law relating to bankruptcy,
insolvency or reorganization and such proceeding is not dismissed
within 90 days, provided that the Purchaser shall not be required to
consummate the transactions contemplated by this Agreement until such
proceeding has been dismissed; or
(b) by the Sellers, if between the date hereof and the time
scheduled for the Closing, the Purchaser makes a general assignment for
the benefit of creditors, or any proceeding shall be instituted by or
against the Purchaser seeking to adjudicate it a bankrupt or insolvent,
or seeking liquidation, winding up or reorganization, arrangement,
adjustment, protection, relief or composition of its debts under any
Law relating to bankruptcy, insolvency or reorganization and such
proceeding is not dismissed within 90 days, provided that the Sellers
shall not be required to consummate the transactions contemplated by
this Agreement until such proceeding has been dismissed; or
(c) by either the Sellers or the Purchaser if the Closing
shall not have occurred by January 26, 2000; provided, however, that
the right to terminate this Agreement under this Section 10.01(c) shall
not be available to any party whose failure to fulfill any obligation
under this Agreement shall have been the cause of, or shall have
resulted in, the failure of the Closing to occur on or prior to such
date; or
(d) by either the Purchaser or the Sellers in the event that
any Governmental Authority shall have issued an order, decree or ruling
or taken any other action restraining, enjoining or otherwise
prohibiting the transactions contemplated by this
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Agreement and such order, decree, ruling or other action shall have
become final and nonappealable; or
(e) by the mutual written consent of the Sellers and the
Purchaser.
SECTION 10.02. Effect of Termination. In the event of
termination of this Agreement as provided in Section 10.01, this Agreement
(including, without limitation, Section 5.07) shall forthwith become void and
there shall be no liability on the part of either party hereto except (a) as set
forth in Sections 10.02(b), 11.01 and 11.03 and (b) that nothing herein shall
relieve either party from liability for any breach of this Agreement.
SECTION 10.03. Waiver. Either party to this Agreement may (a)
extend the time for the performance of any of the obligations or other acts of
the other party, (b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document delivered by
the other party pursuant hereto or (c) waive compliance with any of the
agreements or conditions of the other party contained herein. Any such extension
or waiver shall be valid only if set forth in an instrument in writing signed by
the party to be bound thereby. Any waiver of any term or condition shall not be
construed as a waiver of any subsequent breach or a subsequent waiver of the
same term or condition, or a waiver of any other term or condition, of this
Agreement. The failure of any party to assert any of its rights hereunder shall
not constitute a waiver of any of such rights.
ARTICLE XI
GENERAL PROVISIONS
SECTION 11.01. Expenses. Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses, whether or not the Closing
shall have occurred, provided that Century shall pay all such costs and expenses
incurred by the Sellers.
SECTION 11.02. Notices All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by courier service, by telecopy or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 11.02):
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(a) if to the Sellers:
Century Aluminum Company
2511 Garden Road
Building A, Suite 200
Monterey, California 93490
Telecopy: (831) 642-9328
Attention: General Counsel and
Chief Administrative Officer
with a copy to:
Curtis, Mallet-Prevost, Colt & Mosle
101 Park Avenue
New York, NY 10178
Telecopy: (212) 697-1559
Attention: Matias A. Vega, Esq.
(b) if to the Purchaser:
Pechiney Rolled Products LLC
8770 West Bryn Mawr Avenue
Telecopy: (773) 399-3527
Attention: Eileen Burns Lerum
with a copy to:
Pechiney
7, place du Chancelier Adenauer
75016 Paris
France
Telecopy: (33-1) 56 28 33 07
Attention: Mark L. Cohen
and
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Telecopy: (212) 848-7179
Attention: David W. Heleniak, Esq.
Alfred J. Ross, Jr., Esq.
SECTION 11.03. Public Announcements. Until a public
announcement has been made pursuant to this Section 11.03, except as may be
required by Law or stock exchange rules, no party to this Agreement shall make,
or cause to be made, any press release or public announcement in respect of this
Agreement or the transactions contemplated hereby or otherwise
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communicate with any news media without the prior written consent of the other
parties, and the parties shall cooperate as to the timing and contents of any
such press release or public announcement. Notwithstanding the foregoing, where
an announcement is required by Law or stock exchange rules, the party required
to make such an announcement shall notify the other parties of such requirement
(and provide a copy of such announcement to the other parties) as soon as
practicable in advance of such announcement and, to the extent practical, take
the views of the other parties in respect of such announcement into account
prior to making such announcement.
SECTION 11.04. Headings. The descriptive headings contained in
this Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
SECTION 11.05. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
SECTION 11.06. Entire Agreement. This Agreement and the
Ancillary Agreements constitute the entire agreement of the parties hereto with
respect to the subject matter hereof and thereof and supersede all prior
agreements and undertakings, both written and oral, between the Sellers and the
Purchaser with respect to the subject matter hereof.
SECTION 11.07. Assignment. This Agreement may not be assigned
without the express written consent of the Sellers and the Purchaser (which
consent may be granted or withheld in the sole discretion of the Sellers and the
Purchaser); provided, however, that prior to the Closing the Purchaser may
assign this Agreement to an Affiliate of the Purchaser without the consent of
the Sellers.
SECTION 11.08. No Third Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the parties hereto and
their permitted assigns and nothing herein, express or implied, is intended to
or shall confer upon any other Person, including, without limitation, any union
or any employee or former employee of the Sellers or Century CP, any legal or
equitable right, benefit or remedy of any nature whatsoever, including, without
limitation, any rights of employment for any specified period, under or by
reason of this Agreement.
SECTION 11.09. Amendment. This Agreement may not be amended or
modified except (a) by an instrument in writing signed by, or on behalf of, the
parties hereto or (b) by a waiver in accordance with Section 10.03.
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<PAGE> 81
SECTION 11.10. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York,
applicable to contracts executed in and to be performed entirely within that
state. All actions and proceedings arising out of or relating to this Agreement
shall be heard and determined in any New York state or federal court sitting in
the City of New York.
SECTION 11.11. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
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<PAGE> 82
IN WITNESS WHEREOF, the Sellers and the Purchaser have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
CENTURY ALUMINUM COMPANY
By /s/ Craig A. Davis
----------------------------
Name:
Title:
CENTURY ALUMINUM OF WEST VIRGINIA, INC.
By /s/ Gerald J. Kitchen
----------------------------
Name: Gerald J. Kitchen
Title: Vice President
PECHINEY ROLLED PRODUCTS LLC
By /s/ J.M. Schemm
----------------------------
Name: J.M. Schemm
Title: Vice President
<PAGE> 83
<TABLE>
<CAPTION>
EXHIBITS
- --------
<S> <C>
A Assumption Agreement
B Bill of Sale
C Deed
D Management Services Agreement
E Molten Aluminum Purchase Agreement
F Ravenswood Indemnity Agreement
G Vernon Indemnity Agreement
</TABLE>
<TABLE>
<CAPTION>
SCHEDULES
- ---------
<S> <C>
1.01(a) Leased Real Property
1.01(b) Current Assets and Current Liabilities
1.01(c) Permitted Property Encumbrances
1.01(d) Senior Managers
1.01(e) Ravenswood Owned Real Property
1.01(f) Vernon Owned Real Property
8.02(r) Easements
</TABLE>
<PAGE> 1
Exhibit 2.2
EXECUTION COPY
MANAGEMENT SERVICES AGREEMENT
THIS AGREEMENT, dated as of September 20, 1999 by and between
Century Aluminum Company, a Delaware corporation ("Century") and Pechiney Rolled
Products LLC, a Delaware limited liability company ("PAV").
WHEREAS, simultaneously with the execution hereof, PAV has
acquired, pursuant to the terms of a Stock and Asset Purchase Agreement dated as
of July 26, 1999 among the parties hereto and certain other persons (the
"Purchase Agreement"), the Rolling Business (as such term is defined in the
Purchase Agreement).
WHEREAS, the parties have determined that it would be
appropriate for Century to provide certain consulting services of the
individuals listed on Annex A attached hereto (the "Consultants") to PAV to
facilitate a smooth transition of ownership of the Rolling Business upon the
terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto agree as follows:
1. Consultants. Consultants are senior executives of Century, and, as
such, have and will continue to have, as their primary responsibility, the
management of Century. Nevertheless, for so long as such individuals are
employed by Century, and are capable of meeting their obligations hereunder
consonant with their responsibilities to Century, Century agrees to make
available the services of each of the Consultants to PAV in the capacities set
forth opposite each such Consultant's name on Annex A attached hereto (the
"Consulting Items"). In connection with their respective capacities, as set
forth on Annex A, Century shall require that such Consultants perform such
services as the designated representative of PAV (the "Designated Person") shall
reasonably request and as further described in Section 3 below. Notwithstanding
any other provision in this Agreement, the Consultants shall continue to be
employees of Century and shall not be employees of PAV.
(b) The Consultants shall make their services available in the manner
agreed upon between the Consultant and the Designated Person and as provided for
in Section 3 below.
(c) Neither Century, its affiliates or subsidiaries, nor any Consultant
(collectively, the "Protected Persons") shall be liable to PAV, its affiliates
or subsidiaries, or any third party for losses, claims or damages (whether
direct, indirect, special, consequential or otherwise), including, without
limitation, loss of profits, incurred by any such person related to or arising
from the consultancy services of the Consultants provided hereunder. PAV shall
indemnify and hold Protected Persons harmless, on demand, in respect of any
claim against, or
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<PAGE> 2
expense, loss or damage (including reasonable attorney fees) incurred by, any
Protected Person related to or arising from the consulting services of the
Consultants provided hereunder.
2. Term of Agreement. The term of this Agreement shall commence on the
date hereof (the "Effective Date") and shall terminate on the earlier of (i)
December 31, 2002, or (ii) the date on which PAV or Century elects to terminate
this Agreement pursuant to Section 5 (the "Termination Date").
3. Services to be Provided. (a) For the period of time commencing on
the Effective Date, each Consultant responsible for the Consulting Items
described in Annex A shall meet with PAV personnel, as reasonably requested,
subject always to their obligations and duties to Century. Meetings may be in
person, or by conference call. Under no circumstances shall the consulting
services exceed the times set forth in Annex B. In the event that PAV requires
advice or special knowledge that call for the expertise of the Century Chief
Executive Officer, Craig A. Davis, Mr. Davis agrees to make himself reasonably
available to provide such advice or share such knowledge (it being understood
that Mr. Davis will not have a predetermined number of hours relating to such
service).
(b) All in person meetings described above shall be conducted in the
offices of Century located in Ravenswood, West Virginia, or at such other
locations in the United States as PAV shall reasonably decide.
4. Compensation and Benefits. (a) Century shall be solely responsible
for payment of each of the Consultants' compensation and benefits, and the
Consultants shall not be entitled to any compensation or benefits from PAV for
services performed for PAV.
(b) PAV shall reimburse Century pro rata for Century's cost based on
the total annual compensation (salary and bonus) of each Consultant as shown on
Century's most recent Proxy Statement from time to time, plus 30% (the "Cost"),
which shall be computed as set forth in Annex C attached hereto. PAV shall pay
Century for travel time and expenses and if travel time is for purposes in
addition to PAV consulting, theses travel costs will be fairly prorated.
(c) Unless otherwise agreed by the parties, the reimbursed Costs
payable under Section 4(b) shall be paid monthly after submission by Century to
PAV of a detailed invoice showing the hours expended and the amount owed with
respect to the applicable month.
(d) PAV shall pay to Century a fee which shall be computed by
multiplying (x) the average of the earnings before income tax, depreciation and
amortization for PAV calendar years 2001 and 2002 with respect to the Rolling
Business (the "EBITDA of the Rolling Business") and (y) 0.40, and subtracting
from such product (z) $18 million (the "Fee"). The Fee shall be paid to Century
as soon as practicable after January 1, 2003, but in no case later than July 1,
2003.
The EBITDA of the Rolling Business shall be computed by an
auditor selected by PAV (the "PAV Auditor"). Century may request a second
computation of the EBITDA of the Rolling Business by an auditor of its choice
(the "Century Auditor"), if Century reasonably believes that the EBITDA of the
Rolling Business as computed by the PAV Auditor, is in error. In the event that
the EBITDA of the Rolling Business, as computed by the Century Auditor, is
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<PAGE> 3
within 10% of the EBITDA of the Rolling Business as computed by the PAV Auditor,
the parties will agree that the EBITDA of the Rolling Business to be used to
calculate the Fee shall be an average of the two. In the event that the EBITDA
of the Rolling Business, as computed by the Century Auditor, is not within 10%
of the EBITDA of the Rolling Business as computed by the PAV Auditor, the
parties will agree on a third independent auditor to calculate the EBITDA of the
Rolling Business. In such case the third auditor's calculation of the EBITDA of
the Rolling Business shall be used to calculate the Fee. Century and PAV shall
each pay all costs incurred by their respective auditors and shall each pay
one-half of the costs incurred by the third auditor.
(e) PAV shall, upon presentation of proper documentation with respect
to any Consultant, pay Century on a current basis (or pay at Century's direction
to the applicable Consultant) all reasonable business expenses incurred by the
Consultants in performing their services hereunder, in accordance with Century's
reimbursement policies generally applicable to senior executive employees
including, but not limited to, expenses for travel and accommodations.
(f) It is expressly understood between the parties that Century and the
Consultants shall be independent contractors and not engaged as employees of
PAV. It is also expressly agreed that Century shall be solely responsible for
the withholding and payment of any and all taxes and other sums required to be
withheld or paid by an employer pursuant to any and all laws applicable to the
rendering of services by the Consultants hereunder.
5. Termination of this Agreement. (a) This Agreement or the services of
any Consultant may be terminated by PAV at any time or by Century for any reason
after Period 1 without penalty. In the event of the termination of this
Agreement by PAV other than as a result of circumstances described in Section
5(b) or 5 (c) below, PAV shall (i) promptly pay all accumulated Costs hereunder
for services performed prior to the date of termination, together with business
expenses pursuant to Section 4(e), upon submission by Century to PAV of a
detailed invoice showing the hours expended and the amount owed and (ii) shall
pay to Century the Fee.
(b) In the event that (i) this Agreement is terminated by Century on or
before December 31, 2000 or (ii) on or before December 31, 2000, Gerald A.
Meyers or his successor, and any one of the other Consultants or their
successors are not available or materially fail to provide services hereunder,
even if such failure is consonant with their responsibilities to Century, PAV
may terminate this Agreement, and in either case, PAV shall promptly pay all
accumulated Costs and expenses hereunder for services performed prior to the
Termination date, upon submission by Century to PAV of a detailed invoice
showing the hours expended and the amount owed and no other Fee shall be
payable.
(c) If the conditions or circumstances set forth in Section 5(b) occur
after December 31, 2000, PAV shall promptly pay all accumulated Costs and
expenses hereunder for services performed prior to the Termination date, upon
submission by Century to PAV of a detailed invoice showing the hours expended
and the amount owed and shall pay to Century a pro-rata portion of the Fee,
which shall be determined by multiplying the total Fee by a fraction, the
numerator of which is the number of days between the Effective Date and the
Termination Date during which period Consultants were to have been available for
consulting, pursuant to Annex B, or actually consulted, whichever is greater,
and denominator of which is the total
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<PAGE> 4
number of days Consultants were to have been available pursuant to Annex B for
all periods shown on the schedule, provided, that in no event shall such
fraction exceed one.
(d) The Fees shall be paid as provided in Section 4(d).
6. Termination of Consultants. In the event of the termination of the
services of any of the Consultants by PAV for any reason, PAV shall have no
obligation for the payment of any Costs applicable to such Consultant after the
date of such termination, and Costs allocable to services rendered by such
Consultant prior to the date of termination shall be paid after the close of the
relevant Period as described in Section 4(c) above. In the event any Consultant
shall no longer be able to perform services hereunder for any reason, Century
shall designate a substitute reasonably acceptable to PAV to perform services
hereunder in substitution for the terminated Consultant. In the event PAV shall
so approve a successor which Century has designated, Century agrees to provide
the services of the successor Consultant on the same basis as the services of
the predecessor, and as though the successor were named on Annex A in place of
the predecessor, unless the parties otherwise agree.
7. Conflict of Interest and Insurance. (a) PAV hereby expressly and
prospectively waives all claims of any conflict of interest that may arise in
connection with the Consultants' performance of their services under this
Agreement.
(b) PAV shall arrange that the Consultants, while they are physically
present on the premises owned by PAV, shall be covered for their activities
hereunder under policies of liability insurance maintained by PAV on the same
basis as officers and directors of PAV are covered.
8. Miscellaneous. (a) Any notice required or permitted under this
Agreement shall be given in writing and shall be deemed to have been effectively
made or given if personally delivered, or if mailed or faxed to the other party
at its address and fax number set forth below in this Section 8(a), or at such
other address or fax number as such party may designate by written notice to the
other party hereto:
if to PAV:
Pechiney Rolled Products LLC
8770 West Bryn Mawr Avenue
Chicago, IL 60631-3542
Fax: (773) 399-3527
Attention: Eileen Burns Lerum
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Fax: (212) 848-7179
Attention: David W. Heleniak, Esq.
Alfred J. Ross, Jr., Esq.
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<PAGE> 5
if to Century:
Century Aluminum Company
2511 Garden Road
Building A, Suite 200
Monterey, CA 93940
Fax: (831) 642-9328
Attention: General Counsel
(b) This Agreement shall be binding upon and inure to the benefit of,
and shall be enforceable by Century and PAV; provided, however, that this
Agreement shall not be assignable by either Century or PAV, and Century may not
substitute any Consultant hereunder without the written consent of PAV, and such
consent shall not be unreasonably withheld.
(c) This Agreement constitutes the entire agreement of the parties
hereto with respect to the subject matter hereof and may not be amended or
modified except by an instrument in writing signed by PAV and Century. Waiver of
any term or condition of this Agreement shall only be effective if in writing
and shall not be construed as a waiver of any subsequent breach or waiver of the
same term or condition, or a waiver of any other term or condition of this
Agreement.
(d) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to contracts executed in and
to be performed in that State.
(e) This Agreement may be executed in one or more counterparts, and by
the parties hereto in separate counterparts, each of which when executed shall
be deemed to be an original but all of which taken together shall constitute one
and the same agreement.
9. Dispute Resolution. (a) In the event that any dispute, claim or
controversy shall arise as to whether either party hereto shall have fulfilled
its respective obligations under this Agreement, the parties agree that within
five (5) days after notification thereof authorized representatives of the
parties shall meet to resolve such dispute, claim or controversy. If, within ten
(10) days after the authorized representatives first began such meetings the
parties have not agreed to a resolution, a PAV representative and a Century
representative (other than, in the case of each party, the aforementioned
authorized representatives) shall meet within five (5) days to resolve such
dispute, claim or controversy. If, within ten (10) days after such designated
representatives first began such meetings, the parties have not reached
agreement, the dispute, laim or controversy shall be determined in the manner
set forth in Section 9 (b) hereof.
(b) If, within five (5) business days after the date referred to in the
last sentence of Section 9 (a) hereof the dispute, claim or controversy in
question remains unresolved, such dispute, claim or controversy shall be finally
resolved by arbitration in New York City pursuant to the Rules of Conciliation
and Arbitration of the International Chamber of Commerce, and any award rendered
by an arbitral panel in accordance therewith shall be final and binding on the
parties and nonappealable. By execution of this Agreement each of the parties
consents to the jurisdiction of such arbitral panel for itself and in respect of
its properties. Any costs of the proceedings described in this Section 9 (b)
shall be borne by the parties equally.
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<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
CENTURY ALUMINUM COMPANY
By: /s/ Gerald J. Kitchen
-----------------------
Name: Gerald J. Kitchen
Title: Executive Vice President
PECHINEY ROLLED PRODUCTS LLC
By: /s/ J.M. Schemm
-----------------------
Name: J.M. Schemm
Title: Vice President
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<PAGE> 1
EXHIBIT 2.3 CENTURY ALUMINUM 8-K
MOLTEN ALUMINUM PURCHASE AGREEMENT
THIS MOLTEN ALUMINUM PURCHASE AGREEMENT (this "AGREEMENT") is
entered into as of September 20, 1999 ("EFFECTIVE DATE"), by and between CENTURY
ALUMINUM OF WEST VIRGINIA, INC., a Delaware corporation ("SELLER"), and PECHINEY
ROLLED PRODUCTS, LLC, a Delaware limited liability company ("BUYER").
RECITALS
A. Seller has sold to Buyer the assets consisting of an
aluminum rolling mill (the "ROLLING MILL") and cast house (the "CAST HOUSE")
located in Ravenswood, West Virginia (the Rolling Mill and the Cast House
together being the "FABRICATION PLANT").
B. Seller produces molten primary aluminum at the aluminum
reduction plant located adjacent to the Fabrication Plant in Ravenswood, West
Virginia (the "REDUCTION PLANT").
C. Seller wishes to sell to Buyer and Buyer wishes to purchase
from Seller certain quantities of Molten Aluminum (as hereinafter defined)
produced at the Reduction Plant.
NOW, THEREFORE, the Parties, intending to be legally bound by
this Agreement, agree as follows:
1. DEFINITIONS.
1.1. DEFINED TERMS. For purposes of this Agreement each of the
following terms shall have the meaning specified below and may be used in the
plural or singular form.
"AFFILIATE" of any person or entity shall mean any other
person or entity directly or indirectly controlling, controlled by, or under
common control with, such person or entity, whether through the ownership of
voting securities, by contract or otherwise. For purposes of this definition,
"control" (including with correlative meanings, the terms "controlling",
<PAGE> 2
"controlled by", and "under common control with") as applied to any person or
entity, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of that person or entity.
"ANNUAL FORECAST" shall have the meaning set forth in Section
2.2.
"APPLICABLE LAWS" shall mean any or all of the following to
the extent applicable in the context:
(i) federal, state, county and municipal or other local
laws, codes, rules and regulations;
(ii) judgments, decrees, writs and injunctions of any court,
arbitration panel, arbitrator or Regulatory Authority;
and
(iii) orders, licenses, permits, directives or other actions
of any Regulatory Authority.
"BANKRUPTCY LAWS" shall have the meaning specified in Section
12.2.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in New York City are required or
permitted by law to close.
"CAST HOUSE" shall have the meaning set forth in Recital A
hereof.
"CASTING CHARGE" shall have the meaning set forth in Section
8.2
"CENTURY INDEMNITEES" shall have the meaning set forth in
Section 15.7.
"DELIVERY POINT" shall have the meaning set forth in Section
3.1.
"DOLLARS" and "$" shall mean the legal currency of the United
States of America.
"EXCESS METAL" shall have the meaning set forth in Section
8.1.
"FABRICATION PLANT" shall have the meaning set forth in
Recital A hereof.
"FACILITY" shall mean the Reduction Plant and the Fabrication
Plant.
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<PAGE> 3
"FORCE MAJEURE" shall have the meaning specified in Section
13.1.
"FORCE MAJEURE PARTY" shall have the meaning specified in
Section 13.2.
"HIGH IRON ALUMINUM" shall mean unalloyed molten primary
aluminum metal having an iron content greater than 0.50% but a monthly average
iron content of 1% or less and otherwise meeting the Molten Aluminum
Specifications.
"LIEN" shall mean any mortgage, pledge, lien, charge,
encumbrance, lease, security interest or claim.
"MAXIMUM QUANTITY" shall have the meaning set forth in Section
2.1.
"MINIMUM QUANTITY" shall have the meaning set forth in Section
2.1.
"MOLTEN ALUMINUM" shall mean unalloyed molten primary aluminum
metal conforming to the Molten Aluminum Specifications.
"MOLTEN ALUMINUM PRICE" shall have the meaning set forth in
Section 6(a).
"MOLTEN ALUMINUM SPECIFICATIONS" shall mean the specifications
set forth in Section 1 of Exhibit C hereto.
"MONTH" shall mean a calendar month.
"MONTHLY DECLARATION" shall have the meaning set forth in
Section 2.3.
"MONTHLY QUANTITY" shall mean the quantity of Molten Aluminum
to be delivered during a Month, as specified in the Monthly Declaration
delivered with respect to such Month in accordance with Section 2.3.
"NON-TERMINATING PARTY" shall have the meaning set forth in
Section 12.2.
"NOTICES" shall have the meaning specified in Section 15.10.
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<PAGE> 4
"P4050" shall mean unalloyed primary molten aluminum metal
with an iron content greater than 0.30% but less than 0.50% and with silicon
content not greater than 0.40%, and otherwise meeting the Molten Aluminum
Specifications.
"PECHINEY INDEMNITEES" shall have the meaning set forth in
Section 15.6.
"POUND" shall mean a unit of weight equal to sixteen ounces
avoirdupois.
"POWER CONTRACT" shall mean Seller's existing contract for the
supply of electric power, dated July 1, 1996, between Seller and American
Electric Power (f.k.a. OPC Power Company) which expires on July 31, 2003.
"QUALITY SHORTFALL" shall have the meaning set forth in
Section 3.2(b).
"QUARTERLY FORECAST" shall have the meaning set forth in
Section 2.2.
"RECEIVING PARTY" shall have the meaning specified in Section
13.2.
"REDUCTION PLANT" shall have the meaning set forth in Recital
B hereof.
"REGULATORY AUTHORITY" shall mean any federal, state,
municipal, local or other governmental department, commission, board, agency,
taxing authority, possession, territory or instrumentality.
"ROLLING MILL" shall have the meaning set forth in Recital A
hereof.
"SOW" shall mean unalloyed primary aluminum metal in sow form
conforming to the Sow Specifications.
"SOW DELIVERY POINT" shall have the meaning set forth in
Section 8.4.
"SOW SPECIFICATIONS" shall have the meaning set forth in
Exhibit D.
"TAC" or "TAC SYSTEM" shall mean the patented equipment
designed for treatment of molten primary aluminum in crucible.
"TERMINATING PARTY" shall have the meaning specified in
Section 12.2.
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1.2. GENERAL PROVISIONS. In this Agreement, unless the context otherwise
requires:
1.2.1. References to a Section, Schedule or Exhibit not
otherwise identified in this Agreement shall be construed as references to that
specified Section of, or that Exhibit or Schedule to, this Agreement.
1.2.2. References to a document (including this Agreement), or
to any particular provision of a document, shall be construed as references to
that document or provision as amended or supplemented from time to time.
2. SALE AND PURCHASE; FORECASTS.
2.1. OBLIGATION TO PURCHASE AND SELL. Subject to the
provisions of this Section 2 and, to the extent applicable, Section 12.1, Buyer
shall purchase from Seller and Seller shall sell to Buyer a minimum of
[Confidential Information filed separately with the SEC] Pounds of Molten
Aluminum per Month ("MINIMUM QUANTITY") and a maximum of [Confidential
Information filed separately with the SEC] Pounds of Molten Aluminum per Month
("MAXIMUM QUANTITY"). Seller shall make deliveries of the Monthly Quantity for
each Month in approximately even daily amounts. It is understood that the
Minimum Quantity and the Maximum Quantity as stated above have been fixed on the
basis of a Month consisting of thirty (30) days and that such amounts are to be
adjusted pro rata in respect of any Month consisting of more or fewer days.
2.2. ANNUAL AND QUARTERLY FORECASTS. Between October 1 and
October 15th of each calendar year, Buyer shall deliver to Seller a non-binding,
good faith written forecast of Buyer's requirements for Molten Aluminum at the
Fabrication Plant during each Month of the immediately following calendar year
(the "ANNUAL FORECAST"). No later than forty-five (45)
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<PAGE> 6
days prior to the first day of each calendar quarter, Buyer shall deliver to
Seller a revised forecast of Buyer's requirements for Molten Aluminum (the
"QUARTERLY FORECAST") for each Month of such calendar quarter. The quantity
forecast for each Month in the Quarterly Forecast shall not be less than the
Minimum Quantity or more than the Maximum Quantity.
2.3. MONTHLY DECLARATION. Within the last five (5) days of
each Month, Buyer shall deliver to Seller in writing a declaration (the "MONTHLY
DECLARATION") of the quantity of Molten Aluminum which it will purchase from
Seller during the Month beginning on the first day of the second Month
immediately following the Month in which the Monthly Declaration is required to
be delivered. (Example: the Monthly Declaration delivered within the last five
(5) days of December will fix the quantity for the following February.) The
quantity fixed in a Monthly Declaration shall not (i) vary by more than two
percent (2%) from the quantity forecast for such Month in the Quarterly
Forecast, or (ii) be less than the Minimum Quantity or more than the Maximum
Quantity. Once delivered to Seller, each Monthly Declaration shall be final and
binding upon the parties as to the quantities specified therein for the
applicable Month.
2.4. INITIAL FORECASTS. The Monthly Declarations for the
Months of September and October, 1999 are attached as Exhibit A hereto. The
Quarterly Forecast for the calendar quarter ending December 31, 1999 is attached
as Exhibit B hereto.
3. DELIVERY.
3.1. QUANTITY MAKEUP. (a) If at the end of a Month Buyer
shall determine that Seller has failed to deliver to Buyer the Monthly Quantity
required to be delivered for such Month, Buyer shall so notify Seller within
five (5) Business Days following the end of such Month, by notice ("BUYER'S
NOTICE") given in writing to the Reduction Plant manager, with a copy to Seller,
and, within twenty-four (24) hours of receipt of Buyer's Notice, Seller shall
give
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<PAGE> 7
notice ("SELLER'S NOTICE") in writing to the Fabrication Plant manager, with a
copy to Buyer, as to whether or not Seller shall remedy such shortfall by
delivering Sows cast for Seller pursuant to Section 8. Buyer's Notice hereunder
shall specify the amount by which the Molten Aluminum delivered by Buyer during
the relevant Month is less than the Monthly Quantity for such Month. If Seller
shall so elect, Seller shall deliver Sows from Seller's inventory, sufficient on
a Pound for Pound basis to remedy such shortfall, within five (5) days of
delivery of Seller's Notice.
(b) To the extent that (i) Seller shall not elect to remedy a
quantity shortfall by delivery of Sows pursuant to Section 3.1(a) above or shall
have failed to deliver Seller's Notice as specified therein, and (ii) the total
quantity of Molten Aluminum and/or Sows delivered by Seller to Buyer during such
Month is less than ninety-eight percent (98%) in amount of the Monthly Quantity
for such Month, then Seller shall indemnify Buyer in an amount equal to the
product of (x) [Confidential Information filed separately with the SEC] and (y)
the amount in Pounds by which the total quantity of Molten Aluminum and/or Sows
delivered by Seller to Buyer during such Month is less than the Monthly Quantity
for such Month. Such indemnity shall be payable irrespective of any amounts of
molten or solid aluminum effectively purchased by Buyer from third parties to
compensate for such shortfall. The indemnity payable hereunder shall be deducted
from the amount that is to be paid by Buyer to Seller with respect to the
relevant Month, as provided in Section 7.2 (or, in the event that the amount
payable by Seller to Buyer shall be in excess of the amount payable by Buyer to
Seller with respect to such Month, then Seller shall pay to Buyer the balance
thereof not later than the fifteenth (15th) day of the Month immediately
following the Month in which the quantity shortfall occurred).
3.2. SELLER'S INDEMNITY FOR QUALITY SHORTFALL. (a) If, at any
time during a Month or to the extent practicable within one (1) day, but in no
event more than three (3) Business
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<PAGE> 8
Days, following the end of such Month, Buyer determines that molten primary
aluminum delivered by Seller to Buyer during such Month will not meet or has not
met the Molten Aluminum Specifications, and such failure to meet the Molten
Aluminum Specifications will result or has resulted in a Quality Shortfall (as
hereinafter defined), then Buyer shall so notify Seller promptly upon such
determination and, to the extent practicable within one (1) day, but in no event
more than three (3) Business Days, following the end of such Month, by notice
("BUYER'S QUALITY SHORTFALL NOTICE") given in writing to the Reduction Plant
manager, with a copy to Seller. Within twenty-four (24) hours of receipt of
Buyer's Quality Shortfall Notice, Seller and Buyer shall confer, in good faith,
to determine the least cost solution to remedy such Quality Shortfall. In the
event that Seller and Buyer shall so agree on such least cost solution, then
such solution shall be utilized to remedy the Quality Shortfall and Seller shall
indemnify Buyer for the cost thereof, provided that in no event shall such cost
be in excess of the Shortfall Penalty which would otherwise be payable in
respect of such Quality Shortfall. In the event that Seller and Buyer shall fail
to agree on such least cost solution within such twenty-four (24) hour period,
then no later than five (5) days following receipt of Buyer's Quality Shortfall
Notice, Seller shall give notice ("SELLER'S QUALITY SHORTFALL NOTICE") to Buyer
in writing as to whether it shall (i) compensate for such Quality Shortfall by
delivery of Sows or (ii) pay the Shortfall Penalty, as determined in accordance
with Section 3.2(b) below. The amount payable by Seller to Buyer with respect to
the least cost solution utilized to remedy a Quality Shortfall or for a
Shortfall Penalty, as the case may be, shall be deducted from the amount that is
to be paid by Buyer to Seller with respect to the relevant Month, as provided in
Section 7.2 (or, in the event that the amount payable by Seller to Buyer shall
be in excess of the amount payable by Buyer to Seller with respect to such
Month, then Seller shall pay to Buyer the balance thereof not later
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than the fifteenth (15th) day of the Month immediately following the Month in
which the Quality Shortfall occurred).
(b) To the extent that a Quality Shortfall is not remedied by
utilization of the least cost solution determined by Seller and Buyer as
specified in Section 3.2(a) or by delivery of Sows, Seller shall indemnify Buyer
in an amount equal to the product of (x) [Confidential Information filed
separately with the SEC] and (y) the amount of the remaining Quality Shortfall,
in Pounds (the "SHORTFALL PENALTY").
(c) For purposes of this Section 3.2, a "QUALITY SHORTFALL"
shall mean the quantity expressed in Pounds by which the amount of Molten
Aluminum delivered by Seller to Buyer during such Month is less than the Monthly
Quantity with respect to such Month by virtue of the delivery by Seller to Buyer
of molten primary aluminum which failed to meet the Molten Aluminum
Specifications. For purposes of calculation of a Shortfall Penalty in accordance
with Section 3.2(b), the Quality Shortfall for the relevant Month shall not
include any amounts of molten primary aluminum not conforming to the Molten
Aluminum Specifications which were delivered by Seller during such Month and are
retained by Buyer and not cast by Buyer, other than for reason of lack of
available capacity, for the account of Seller and delivered to Seller in
accordance with Sections 3.3 and 8.4 hereof.
3.3. SHORTFALL TO BE CAST. Subject to Buyer's available
capacity to cast as provided in Section 8.1, Buyer shall cast for the account of
Seller all molten primary aluminum not conforming to the Molten Aluminum
Specifications which is delivered to Buyer by Seller during any Month.
3.4. REMEDIES EXCLUSIVE. Notwithstanding anything to the
contrary set forth in this Agreement, during the term of this Agreement, the
remedies for a quantity shortfall and a
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Quality Shortfall set forth in Sections 3.1 and 3.2, respectively, shall
constitute Buyer's exclusive remedies therefor.
3.5. TITLE AND RISK OF LOSS. Seller shall deliver Molten
Aluminum to Buyer hereunder in crucibles at the scale in the hot metal tunnel
between the Reduction Plant and the Cast House (the "DELIVERY POINT"). Title and
risk of loss to Molten Aluminum other than Excess Metal, (provided that the
parties acknowledge that the Molten Aluminum and Excess Metal shall be
commingled and Seller shall not remove any Excess Metal from the commingled
inventory until it has been identified as Excess Metal) shall pass to Buyer at
the Delivery Point. Deliveries shall be made from time to time as Molten
Aluminum is tapped by Seller accordance with Seller's normal practices. If
Seller substitutes Sows for Molten Aluminum pursuant to Section 2.5, the
delivery of such Sows shall be at such location at the Facility as Seller and
Buyer shall agree. Employees of Century WV shall retain control of the physical
delivery of the Molten Aluminum beyond the Delivery Point into the Cast House.
Neither Century WV nor any of such employees shall have any liability to
Pechiney with respect to such activities, except to the extent that any damage
to the property of Pechiney (including the Molten Aluminum) which may arise
therefrom shall be caused by the gross negligence, recklessness or willful
misconduct of any of such employees; provided that, without limiting the
foregoing, repeated violations by employees of Century WV of procedures in place
on the date hereof that have been notified to Century WV in writing by Pechiney
shall be deemed gross negligence.
3.6. TAC. As soon as practical and in any event within twenty
(20) Months following the Effective Date, Seller shall install a TAC System or
comparable equipment, and associated up-to-date skimming equipment, for use in
the production of all molten primary
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aluminum. Such equipment shall be installed on Seller's property. The TAC System
shall be operated by Seller.
3.7. OPERATION OF EQUIPMENT; DROSS. Until such time as Seller
shall have installed a TAC System, upon delivery of Molten Aluminum Buyer shall
skim bath and dross from each crucible and promptly return such bath and dross
to Seller. Following installation of a TAC System, Seller shall operate the TAC
System and skim bath and dross, prior to delivery of the Molten Aluminum. Bath
and dross skimmed from each crucible shall at all times be and remain the
exclusive property of Seller. Following installation of a TAC System, Buyer may
sample and test the Molten Aluminum in accordance with Section 5.2 during the
operation of the TAC System. Remaining bath and dross content shall be
determined as specified in Exhibit C. The percentage of remaining bath and dross
("PCT") shall be deducted for invoicing purposes in accordance with Section 7.1.
4. MOLTEN ALUMINUM WEIGHT.
The weight of Molten Aluminum delivered to Buyer hereunder
shall be determined by Buyer using the scale in the hot metal tunnel at the
Delivery Point. Not less frequently than monthly, Buyer will ensure that the
scale is certified as a commercial scale in accordance with customary industry
standards by an independent contractor mutually acceptable to Buyer and Seller,
and Buyer will promptly furnish Seller with the resulting certifications and
test results.
5. MOLTEN ALUMINUM QUALITY.
5.1. SPECIFICATIONS. Seller warrants that all Molten Aluminum
sold to Buyer hereunder shall meet the Molten Aluminum Specifications, and all
Sows delivered to Buyer pursuant to Section 3.1(a) or 3.2(a) shall meet the Sow
Specifications, in each case as such
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specifications may be adjusted or revised from time to time by written agreement
of the parties. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 5, SELLER MAKES NO
REPRESENTATION OR WARRANTY AS TO THE MOLTEN ALUMINUM OR SOWS TO BE SOLD BY
SELLER TO BUYER HEREUNDER, AND SELLER HEREBY DISCLAIMS ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, USAGE OR FITNESS FOR ANY PARTICULAR PURPOSE.
5.2. SAMPLING. Buyer shall sample and test the Molten Aluminum
contained in each crucible delivered by Seller hereunder using a method mutually
acceptable to the parties, and shall furnish the test results to Seller on a
daily basis. Buyer shall label and retain all samples taken for a period of no
less than thirty (30) days after delivery.
5.3. UMPIRES. If Buyer determines in accordance with Section
5.2 that molten primary aluminum delivered by Seller does not conform to the
Molten Aluminum Specifications, or determines that sows delivered by Seller
pursuant to Section 3 do not conform to the Sow Specifications, Buyer shall, no
later than two (2) Business Days after delivery of the relevant molten primary
aluminum or sows, deliver written notice of such failure to the Reduction Plant
manager, with a copy to Seller, describing the failure in reasonable detail. If
Seller disagrees with Buyer's determination that the molten primary aluminum or
sows do not meet the Molten Aluminum Specifications or Sow Specifications, as
the case may be, Seller shall have the right, exercisable by written notice
delivered to Buyer within five (5) Business Days after receipt of Buyer's
notice, to require an analysis of the relevant samples retained as provided for
in Section 5.2 by an independent umpire (applying, for purposes of rounding off,
the principles set forth in the "Standard Practice for Using Digits in Test Data
to Determine Conformance with Specifications" of ASTME 29), mutually acceptable
to the parties, whose determination shall be
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final and binding upon the parties. Without prejudice to any other remedies of
Buyer or Seller hereunder, if the molten primary aluminum or sows, as the case
may be, are found by the independent umpire to be not within the Molten Aluminum
Specifications or the Sow Specifications, as the case may be, then Seller shall
pay for the costs of the umpire's analysis and the non-conforming quantity shall
be excluded for purposes of determining compliance with the Monthly Quantity,
and if the molten primary aluminum or sows, as the case may be are found to be
within the Molten Aluminum Specifications or the Sow Specifications, as the case
may be, then Buyer shall pay for the costs of the umpire's analysis and the
conforming quantity shall be taken into account in determining compliance with
the Monthly Quantity.
5.4. LIENS. Seller warrants that all Molten Aluminum and all
Sows sold to Buyer hereunder shall be free from any lawful security interest or
lien thereon.
6. PRICE.
(a) The price for each Pound of Molten Aluminum sold by Seller
to Buyer hereunder shall be the [Confidential Information filed separately with
the SEC] price expressed in cents per Pound for P1020 aluminum as reported for
the Month immediately preceding the Month of delivery by [Confidential
Information filed separately with the SEC] ("MOLTEN ALUMINUM PRICE"), such
Molten Aluminum Price being net of sales taxes (if any) payable with respect to
such sale. The price may be subject to further adjustment as provided in Exhibit
C hereto. The price for each Pound of Sows delivered by Seller to Buyer pursuant
to Section 3.1(a) or 3.2(a) shall be the Molten Aluminum Price, [Confidential
Information filed separately with the SEC] per Pound. If [Confidential
Information filed separately with the SEC] ceases reporting the [Confidential
Information filed separately with the SEC] price, Buyer and Seller will in good
faith seek to determine a substitute publication or reference that most nearly
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<PAGE> 14
approximates the price data reflected in [Confidential Information filed
separately with the SEC]. Failing agreement within three (3) days after the date
on which [Confidential Information filed separately with the SEC] ceased
reporting, Buyer and Seller will within three (3) additional days each designate
an independent expert and such independent experts will in good faith seek to
determine such a substitute publication or reference. If such independent
experts are unable to agree on such a substitute publication or reference within
ten (10) Business Days, the determination of a substitute publication or
reference price will be made by an arbitral panel appointed pursuant to the
procedures set forth in Section 15.3(b), in which case the arbitrators appointed
pursuant to such Section will be instructed to render their decision no later
than four (4) months from the date on which the arbitration procedure was
initiated. During any period in which no published price or other reference
price has been agreed or determined, the interim price for each Pound of Molten
Aluminum sold by Seller to Buyer hereunder shall be the sum of: (i) the average
per Pound in Dollars of the [Confidential Information filed separately with the
SEC] price for P1020 aluminum as published on [Confidential Information filed
separately with the SEC] for the Month prior to the Month of delivery plus (ii)
the amount per Pound in Dollars by which the last average [Confidential
Information filed separately with the SEC] price per Pound used as a basis for
pricing by the parties hereunder exceeded the average per Pound in Dollars of
the [Confidential Information filed separately with the SEC] Price for the Month
used to determine the last average [Confidential Information filed separately
with the SEC] price per Pound less (iii) [Confidential Information filed
separately with the SEC] per Pound. When the parties have agreed upon a
substitute reference price or such price has been determined by independent
experts or pursuant to Section 15.3, the parties will promptly make appropriate
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<PAGE> 15
adjustments and payments in respect of Molten Aluminum for which an interim
price applied pursuant to the immediately preceding sentence.
(b) Notwithstanding the foregoing, the price for the
specified quantities of Molten Aluminum scheduled to be produced by Seller
during the Months specified on Exhibit A hereto shall be as set forth on such
Exhibit.
7. INVOICING AND PAYMENT.
7.1. INVOICING. Invoicing for Molten Aluminum sold hereunder
during each Month shall be made according to the following formula:
(i) Molten Aluminum weight determined as per
Section 4 of this Agreement ("W")
multiplied by (x) one (1) minus (-) Pct as
per Section 3.7 of this Agreement
multiplied by (x) the Molten Aluminum Price
("P"). Such formula can be summarized as
follows:
W x (1-Pct) x P
minus
(ii) Casting Charge as defined in Section 8.2
for molten primary aluminum cast in sow
form (Sows and/or sows not conforming to
the Sow Specifications): the Casting Charge
shall be equal to the weight of cast
aluminum in sow form (Sows and/or sows not
conforming to the Sow Specifications)
multiplied by (x) [Confidential Information
filed separately with the SEC].
7.2. PAYMENT. Payment for all Molten Aluminum sold hereunder
during each Month (including Sows substituted by Seller pursuant to Section
3.1(a) and 3.2(a)) shall be due
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from Buyer to Seller not later than the fifteenth (15th) day of the Month
immediately following the Month of delivery. Payment shall be made by wire
transfer of immediately available Dollars to such bank account as Seller may
designate from time to time by written notice to Buyer no later than five (5)
Business Days prior to the applicable payment date.
8. EXCESS MOLTEN ALUMINUM.
8.1. BUYER'S OBLIGATION TO CAST. Unless Seller, in its sole
discretion, chooses to develop its own casting capability, all Molten Aluminum
in excess of the quantities purchased by Buyer hereunder and all other molten
primary aluminum not conforming to the Molten Aluminum Specifications produced
by Seller at the Reduction Plant during the term of the Agreement ("EXCESS
METAL") shall be cast by Buyer into Sows or sows and delivered to Seller.
Notwithstanding the foregoing and the obligations of Buyer under Section 9,
whether or not Buyer exercises its option to reduce the quantities to be
purchased hereunder in accordance with the provisions of Section 12.1, Buyer's
obligation to cast Excess Metal into Sows and/or other sows for Seller shall be
limited to the extent of Buyer's available capacity to cast such Sows and/or
other sows at the Cast House at the time Seller produces the applicable molten
primary aluminum; it being understood that (i) Buyer shall maintain the casting
capacity existing as of the date hereof, and (ii) there shall be no obligation
on Buyer to increase such casting capacity. Buyer shall not cast any form of
primary aluminum at the Cast House for sale by Buyer to third parties unless
Buyer has first cast all Excess Metal produced during such Month into Sows
and/or other sows for the account of Seller.
8.2. CASTING CHARGE. Any Excess Metal cast by Buyer for
Seller shall be subject to a casting charge (the "CASTING CHARGE"), payable by
Seller to Buyer, of [Confidential Information filed separately with the SEC] of
molten primary aluminum cast as Sows and/or
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other sows cast and delivered to Seller, such Casting Charge being net of sales
taxes (if any) payable with respect to such activity. If the Casting Charge is
not offset against amounts owed in respect of Molten Aluminum as provided in
Section 7.1 for any reason whatsoever, then the Casting Charge for all Excess
Metal cast for Seller during each Month which has not been so offset shall be
paid by Seller to Buyer no later than fifteen (15) days after the end of such
Month. Payment shall be made by wire transfer of immediately available Dollars
to such bank account as Buyer may designate from time to time by written notice
to Seller no later than five (5) Business Days prior to any payment date.
8.3. SOW WEIGHT. The weight of Sows and other sows cast for
Seller from Excess Metal shall be determined by Buyer, in cold form, using the
certified casting scale located in the M-1 bay in the Cast House or another
commercially certified scale acceptable to the parties. Not less frequently
than monthly, Buyer will ensure that such scale will be certified as a
commercial scale in accordance with customary industry standards by an
independent contractor mutually acceptable to Buyer and Seller, and Buyer will
promptly furnish Seller with the resulting certifications and test results.
8.4. SOW DELIVERY. Unless otherwise agreed by the parties,
all Sows and other sows cast by Buyer for the account of Seller during any
Month shall be delivered to Seller to the extent practicable within one (1)
day, and in no event more than five (5) days, after the end of such Month at
the outside primary sow storage pad or such other delivery point as may be
agreed from time to time (the "SOW DELIVERY POINT"). Buyer shall store such
Sows and other sows at no charge to Seller, and Buyer shall exercise such care
of Seller's Sows and other sows as Buyer would exercise if such Sows or other
sows belonged to Buyer. All Sows and other sows stored for Seller hereunder
shall be stored by Buyer as bailee, for the account of Seller, as bailor, and
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Buyer shall have no ownership rights or interests in such Sows or other sows.
Buyer agrees to comply with all reasonable requests of Seller from time to time
to evidence Seller's ownership of the Sows and/or other sows, including without
limitation, (i) physical segregation of the Sows and/or other sows from Buyer's
property, (ii) conspicuous marking or posting to reflect Seller's ownership,
(iii) delivery of holding certificates, (iv) execution and delivery of UCC-1
financing statements to be filed for notice purposes, and (v) acknowledging
Seller's ownership of such Sows and/or other sows in such documents and
instruments as may from time to time be reasonably required by Seller.
8.5. LOADING AND REPORTING SERVICES. In further consideration
for the Casting Charge, Buyer shall load Seller's Sows and/or other sows for
shipment from the Facility in accordance with Seller's contracts for sale to
its customers, prepare bills of lading and other shipping documents and furnish
written reports to Seller in such detail and at such times as Buyer and Seller
shall agree. Buyer shall maintain the Sow and other sow inventory records by
grade employing Seller's existing metal grade system. Buyer shall continue
Seller's existing practice of checking the weight of Sows and/or other sows by
a second weighing on the main gate scales, and if the second weighing indicates
a weight discrepancy of more than one percent (1%), Buyer shall reweigh any
such Sows or other sows on the scale in the M-1 bay in the Cast House. The
weight thus determined will be the basis for the weight shipped to Seller's
customers and reported by Buyer to Seller's invoicing system.
9. CARE OF SELLER'S PROPERTY.
The parties recognize that Buyer will have possession and use
of Seller's property and equipment from time to time, including, without
limitation, crucibles, sow molds, and other equipment. Buyer shall exercise
such care of Seller's property and equipment as Buyer would
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exercise if such property and equipment belonged to Buyer. Buyer shall be
liable to Seller for all repair and/or replacement costs for damage to Seller's
property and equipment caused by acts or omissions of Buyer, including, without
limitation, repair or replacement of crucibles damaged by freezing of Molten
Aluminum contained therein. Buyer shall return all crucibles and other
equipment to Seller in sufficient time so that production at the Reduction
Plant is not delayed or interrupted due to lack of such equipment. Subject to
Section 10, Buyer shall indemnify and reimburse Seller for any damages,
expenses and liabilities arising from Buyer's failure to timely return any such
property and equipment to Seller; provided, however that Buyer shall be
relieved of any liability for such damages, expenses and liabilities to the
extent these arise out of Seller's failure to perform any of its obligations
hereunder. Each of Seller and Buyer shall, in accordance with good industry
practices, maintain, repair and/or replace all equipment that may, from time to
time, be in possession of the other party.
10. LIMITATION OF LIABILITY.
Neither party shall be liable to the other for special,
punitive or consequential damages (including but not limited to loss of profits
and loss of production that could arise out of Buyer's actions under Section 9)
resulting from breach of warranty, delay of performance or other default
hereunder.
11. SETOFF.
Either Buyer or Seller may setoff amounts then due to the
other hereunder against amounts then due to it from the other hereunder.
12. TERM; TERMINATION.
12.1. TERM. The initial term of this Agreement shall commence
on the Effective Date and shall continue in effect until July 31, 2003. If
Seller determines, in its sole
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discretion, that it will not extend or replace the Power Contract, Seller may
terminate this Agreement upon not less than twelve (12) months prior written
notice to Buyer, provided that the termination date specified in such notice
shall not be earlier than July 31, 2003. If Seller extends or replaces the
Power Contract or otherwise obtains electrical power through alternative
sources, this Agreement shall automatically be extended until the earlier of
(A) the date of termination of the extended or replacement Power Contract (or
the date on which the Reduction Plant will no longer be in operation for reason
of lack of electricity supply) and (B) July 31, 2007. Buyer shall have the
right, upon not less than twelve (12) months prior written notice to Seller, to
reduce the Minimum Quantity and the Maximum Quantity by fifty percent (50%)
each, for the then remaining term of this Agreement, provided that the
effective date of reduction may not be earlier than July 31, 2003. If Buyer
exercises its option to reduce the Minimum Quantity and Maximum Quantity, all
other provisions of this Agreement shall remain in full force and effect.
Notwithstanding the foregoing provisions of this Section 12.1, this Agreement
may be terminated at any time pursuant to Section 12.2.
12.2. TERMINATION. Either Buyer or Seller (the "TERMINATING
PARTY") may terminate this Agreement by notice to the other party or parties
(the "NON-TERMINATING PARTY") after the occurrence of any of the following
events:
12.2.1. A Non-Terminating Party in any material respect
fails to perform or breaches any material provision of this Agreement on its
part to be performed (other than any failure or breach excused under Section
13), and such failure or breach continues unremedied for a period of (i) in the
case of an obligation to make payment, thirty (30) days, and (ii) in the case of
any other material provision, ninety (90) days, after notice from the
Terminating Party. Notwithstanding indemnity payments by Seller under Section
3.1(b) and Section 3.2(b),
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consistent material failure by Seller to comply with its obligations to
deliver Molten Aluminum hereunder shall be deemed to be a breach by Seller
under this Section 12.2.1.
12.2.2. A Non-Terminating Party:
(i) consents to the appointment of a receiver,
trustee or liquidator of itself or of a
substantial part of its property, or admits
in writing its inability to pay its debts
generally as they become due, or makes a
general assignment for the benefit of
creditors;
(ii) files a voluntary petition in bankruptcy or
a voluntary petition or an answer seeking
reorganization under any bankruptcy or
insolvency law (as now or hereafter in
effect) or any other now existing or future
law providing for the reorganization or
winding-up of corporations, or providing
for an agreement, composition, extension or
adjustment with its creditors
(collectively, for purposes of this Section
12.2, "BANKRUPTCY LAWS"); or
(iii) is a defendant in an action or proceeding
under any bankruptcy law which action or
proceeding is not withdrawn or dismissed
within sixty (60) days after filing of the
petition or other paper initiating such
action or proceeding.
12.2.3. Any material provision of this Agreement
shall at any time for any reason cease to be legal, valid and binding on or
enforceable against a Non-Terminating Party, or shall be declared to be null and
void, or the validity or enforceability thereof shall be contested by a
Non-Terminating Party, or the Non-Terminating Party shall deny that it has any
further liability or obligation under this Agreement;
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12.2.4. The Power Contract, or any extension thereof or
replacement contract pursuant to which Seller purchases electrical power for
use at the Reduction Plant, shall be terminated for any reason other than
voluntary agreement of Seller or Seller's breach of such contract;
12.2.5. An event constituting Force Majeure which
prevents the performance by a party (for purposes of this Section 12.2.5, a
Force Majeure Party) of its obligations under this Agreement shall have
continued for a continuous period in excess of six (6) consecutive months.
12.3. EFFECT OF TERMINATION. Termination of this Agreement for
whatever reason shall not affect Seller's warranty obligations under Section 5,
Buyer's warranty obligations under Section 8.4, the indemnification obligations
under this Agreement, or any other duties of either party which by their nature
are to be performed after termination of this Agreement or which were due to be
performed or accrued as of the date of termination. Nothing in this Section 12.3
shall limit any remedies which are expressly provided to Buyer in this Agreement
for any breach by Seller of any covenant or agreement herein. The parties hereby
acknowledge and agree that, upon a termination of the Agreement by Buyer, as
Terminating Party, pursuant to Section 12.2.1, 12.2.2 or 12.2.3, in the event of
a failure by Seller to fulfill its obligations to deliver Molten Aluminum, Buyer
shall be entitled to liquidated damages equal to the product of (x)
[Confidential Information filed separately with the SEC] and (y) the Minimum
Quantity, per Month, for each Month during the period commencing with the date
of termination and expiring on (i) the date of termination of the initial term
of this Agreement as set forth in the first sentence of Section 12.1 or (ii) if
this Agreement has been extended as provided for in the third sentence of
Section 12.1, the date to which the term is extended as so provided in such
third sentence.
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13. FORCE MAJEURE.
13.1. FORCE MAJEURE EVENTS. Except to the extent caused by
the negligence, recklessness or willful misconduct of the party asserting Force
Majeure, the following shall constitute "FORCE MAJEURE" for purposes of this
Agreement:
(i) an act of God or the public enemy, fire,
explosion, lightning, perils of the sea,
flood, drought, war, riot, sabotage or
embargo;
(ii) interruption of or delay in transportation,
interruption of electrical power supply
(including due to exercise by the
applicable power company of its contractual
rights to interrupt power supply),
inadequacy or shortage or failure of supply
of raw materials, breakdowns of key
equipment at the Reduction Plant or the
Fabrication Plant, and labor disputes from
whatever cause arising and whether or not
the demands of the employees involved are
reasonable and within the affected party's
power to concede;
(iii) compliance with any order, action,
injunction, decree, law or regulation of
any Regulatory Authority or with any other
Applicable Laws;
(iv) without limiting the foregoing, any
circumstances of like or different
character beyond the reasonable control of
the affected party; or
(v) a Force Majeure affecting the other party.
13.2. EFFECT OF FORCE MAJEURE. If a party is prevented from,
or delayed in, performing any obligation on its part under this Agreement by
reason of Force Majeure, the party
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so affected (the "FORCE MAJEURE PARTY"), upon prompt written notice to the
other party (the "RECEIVING PARTY") shall be excused from making or taking such
delivery to the extent and for the duration of the period that the same is
prevented or delayed and, at the sole option of the Receiving Party exercised
by notice to the Force Majeure Party, the total quantity of Molten Aluminum (or
substitute Sows) to be sold and purchased hereunder or the total quantity of
Sows to be converted by Buyer for Seller hereunder, as the case may be, at such
time shall be reduced by the quantity so affected. If the Force Majeure affects
the Fabrication Plant but not the Cast House, Buyer shall continue, to the
extent reasonably feasible and subject to Buyer's available casting capacity,
to cast molten primary aluminum for the account of Seller pursuant to Section
8.1.
13.3. NOTICE; EFFORTS TO REMEDY. If a party's performance is
affected, or may be affected, by Force Majeure, that party shall give notice
thereof to the other party as soon as practicable after the occurrence of such
Force Majeure, which notice shall include, insofar as known, a statement of the
probable extent to which the affected party will be unable to perform or will
be delayed in performing its obligations hereunder. Each party shall exercise
due diligence to eliminate or remedy any such Force Majeure and to prevent the
same from unnecessarily delaying and interrupting its performance hereunder,
and shall give the other party prompt written notice when such Force Majeure
causes shall have been eliminated or remedied.
13.4. MONTHLY QUANTITY REDUCTION. Any quantity of primary
aluminum purchased by Buyer from third parties as a substitute for Molten
Aluminum and/or Sows not delivered by Seller during an event of Force Majeure
shall be deducted from the relevant Monthly Quantity that otherwise would have
been required to be delivered by Seller to Buyer during the period of a Force
Majeure.
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14. ASSIGNMENT; MERGER.
14.1. ASSIGNMENT. Seller may assign this Agreement or any of
its rights hereunder to one or more of its secured lenders as collateral.
Either Buyer or Seller may assign this Agreement to any Affiliate of such party
for so long as the assignee remains an Affiliate of such party and provided
that such party shall remain liable for all obligations of the assignee
hereunder. The parties agree that, (i) in the case of a direct or indirect sale
of substantially all the assets of the Reduction Plant to a non-Affiliate of
Seller, Seller shall assign all its rights and obligations hereunder to the
purchaser of such assets and the purchaser shall assume all such rights and
obligations and Seller shall have no further rights or obligations hereunder,
and (ii) in the case of a direct or indirect sale of substantially all the
assets of the Fabrication Plant to a non-Affiliate of Buyer, Buyer shall assign
all of its rights and obligations hereunder to the purchaser of such assets and
the purchaser shall assume all such rights and obligations and Buyer shall have
no further rights or obligations hereunder. Except for the foregoing permitted
assignments, neither party shall assign this Agreement or any of its rights
hereunder without the prior written consent of the other party, which consent
shall not be unreasonably withheld.
14.2. MERGER. In the event of a merger between either party
hereto and a third party, the party hereto entering into such merger shall
cause the surviving party (if other than the party hereto) of such merger to
assume all the rights and obligations hereunder of the party hereto entering
into such merger.
15. MISCELLANEOUS PROVISIONS.
15.1. ENTIRE AGREEMENT; AMENDMENT. This Agreement (including
its Exhibits) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes any prior expressions of
intent or understandings with respect to such
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<PAGE> 26
subject matter. This Agreement may only be amended, modified, supplemented,
released, discharged or abandoned by an instrument in writing signed by a duly
authorized officer of each of the parties.
15.2. WAIVER. The failure or delay of either party to require
performance by the other of any provisions of this Agreement shall not affect
such party's right to require performance of that provision unless and until
performance has been waived in writing.
15.3. GOVERNING LAW; DISPUTES. (a) This Agreement shall in all
respects be governed by, and construed in accordance in accordance with, the
laws of the State of New York without application of the principles of conflicts
of laws of such state.
(b) All disputes arising in connection with this Agreement
shall be finally settled by arbitration under the Rules of Conciliation and
Arbitration of the International Chamber of Commerceby a panel of three (3)
arbitrators appointed in accordance with such rules, and any award or decision
rendered by such arbitral panel shall be final and binding on the parties and
nonappealable. The arbitration shall take place in New York, New York.
The parties submit to the jurisdiction of any court in the
United States having jurisdiction over a party or such party's assets for the
purposes of granting interim or conservatory measures prior to the constitution
of the arbitral tribunal in any dispute arising hereunder. After such
consitution of the arbitral tribunal, applications for interim or conservatory
measures must be made to the arbitral tribunal, to the exclusion of any court
or other judicial authority.
(c) Prior to submission to arbitration, Buyer and Seller shall
first attempt to resolve any dispute hereunder informally at the lowest
possible level of authority. If Buyer and Seller fail to promptly agree through
such normal channels and procedures, then Buyer and
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<PAGE> 27
Seller each shall designate an authorized representative from senior management
who does not devote substantially all of his or her time to performance under
this Agreement and whose task it will be to meet and negotiate in good faith
for the purpose of resolving the dispute. If the authorized representatives of
Buyer and Seller cannot resolve the dispute within twenty (20) days after the
initial request to negotiate, either Buyer or Seller may require that the
dispute be finally resolved by arbitration as provided above.
15.4. TAXES. Buyer shall bear all sales taxes (if any) on
Molten Aluminum sold to Buyer hereunder (including Sows substituted by Seller
pursuant to Section 3.1(a) or 3.2(a)) now imposed or hereafter becoming
effective during the term of this Agreement. Seller shall bear all sales taxes
(if any) in respect of casting work done for Seller by Buyer hereunder now
imposed or hereafter becoming effective during the term of this Agreement. Each
of Seller and Buyer shall accept from the other a West Virginia direct pay
permit in lieu of collecting sales taxes from such other party. Neither Buyer
nor Seller shall be liable for any other governmental taxes, duties, charges or
imposts, including, without limiting the generality of the foregoing, any
federal, state or local taxes on corporate income incurred by the other party
with respect to payment from Buyer or Seller, as the case may be.
15.5. INDEPENDENT CONTRACTORS. Each party's duties and
performance under this Agreement shall be those of an independent contractor,
and nothing in this Agreement shall be deemed to make either party a partner,
joint venturer or otherwise liable for the performance of the other party's
obligations under this Agreement or otherwise. Without limiting the generality
of the foregoing:
15.5.1. Subject to Section 13, each of the parties shall
provide, at its own cost and risk, the requisite electrical power and materials,
and all requisite labor, to (i) produce
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<PAGE> 28
Molten Aluminum sold under this Agreement in the case of Seller, and (ii) to
convert Molten Aluminum into Sows, in the case of Buyer;
15.5.2. Each party shall be solely responsible for its
employee's compensation, benefits and well-being, and the functioning and
maintenance of the Reduction Plant (in the case of Seller) and the Fabrication
Plant (in the case of Buyer), in accordance with all Applicable Laws and any
contractual arrangements which each party may have or hereafter enter into.
Without limiting the foregoing, neither party shall have any responsibility for
salaries or wages payable to employees of the other party or any withholding
with respect to such salaries or wages, for any claims by employees of the
other party for workers' compensation, for any acts or negligence of employees
or agents of the other party, or for any acts or negligence of the other party
(including, without limitation, disposal of all residue, slag, dross, bath and
process by-products); and
15.5.3. Each party shall be exclusively responsible for,
and hereby covenants that it will comply with, all Applicable Laws relating to
its ownership or other interest in, or operation of, (i) the Fabrication Plant
in the case of Buyer, and (ii) the Reduction Plant in the case of the Seller,
including, without limitation, disposal of all residue, slag, dross, bath and
process by-products by the applicable party.
15.6. INDEMNITY BY SELLER. Subject to the provisions of
Section 5.1 and Section 10 hereof, Seller shall indemnify Buyer, its successors
and assigns, and its shareholders, directors, officers, employees, agents and
customers (collectively, the "PECHINEY INDEMNITEES"), against, and agrees to
protect, save and keep harmless each Pechiney Indemnitee from, any and all
liabilities, obligations, losses, damages, claims (including without limitation
claims based on warranty, breach of contract, negligence or strict liability in
tort), penalties,
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<PAGE> 29
actions, suits, costs, expenses and disbursements (including without limitation
legal fees and expenses) of whatsoever kind and nature, imposed on, incurred by
or asserted against any Pechiney Indemnitee by any third party to the extent
that any such third party claim relates to or arises out of a breach by Seller
of its obligations under this Agreement.
15.7. INDEMNITY BY BUYER. Subject to Section 10 hereof, Buyer
shall indemnify Seller, its successors and assigns and its shareholders,
directors, officers, employees, agents and customers (collectively, the
"CENTURY INDEMNITEES"), against, and agrees to protect, save and keep harmless
each Century Indemnitee from, any and all liabilities, obligations, losses,
damages, claims (including without limitation claims based on warranty, breach
of contract, negligence or strict liability in tort), penalties, actions,
suits, costs, expenses and disbursements (including without limitation legal
fees and expenses) of whatsoever kind and nature, imposed on, incurred by or
asserted against any Century Indemnitee by any third party to the extent that
any such third party claim relates to or arises out of a breach by Buyer of its
obligations under this Agreement.
15.8. PROCEDURES FOR INDEMNIFICATION. If any action, suit or
proceeding shall be commenced against an indemnified party or parties by a
third party, or any claim, demand or assessment shall be asserted against an
indemnified party or parties by a third party, in each case resulting from or
arising out of the circumstances described above, which may result in liability
with respect to which the indemnified party or parties intends to seek
indemnification pursuant to Sections 15.6 or 15.7, the party from whom
indemnification is sought shall be notified as soon as practicable and shall
have the right to assume the entire control of the conduct, defense, compromise
and settlement thereof, at their own expense, including employment of counsel,
and, in connection therewith, each indemnified party shall cooperate fully in
such defense and make
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<PAGE> 30
available to the indemnifying party (at the indemnifying party's own expense)
all relevant information under its control; provided that nothing herein shall
authorize an indemnifying party to assume the conduct, defense, compromise or
settlement of any matter involving a criminal proceeding or to agree on behalf
of any indemnified party to any non-monetary compromise or settlement
15.9. CONFIDENTIALITY. Except as required by Applicable Law,
neither party shall use or disclose to others at any time, except as is
necessary to its performance hereunder, any information regarding the other
party's plans, programs, plants, process, products, prices, costs, equipment,
operations, customers or the like. Each party shall restrict the knowledge of
all such information to as few as possible of its employees and, upon request of
the other party hereto, shall deliver to such other party secrecy agreements
executed by such employees in form and substance reasonably satisfactory to such
other party.
15.10. NOTICES.
15.10.1. Any and all notices, demands or other
communications (collectively, "NOTICES") required or permitted to be given by
either party to the other party under this Agreement shall be in writing and
shall be delivered by hand to the recipient party at that party's address set
forth below (other than (i) a Buyer's Notice pursuant to Section 3.1(a) or a
Buyer's Quality Shortfall Notice pursuant to Section 3.2(a), which shall be
delivered by hand or by telephonic facsimile transmission confirmed by telephone
to Seller's Reduction Plant manager, or (ii) a Seller's Notice pursuant to
Section 3.1(a) or a Seller's Quality Shortfall Notice pursuant to Section
3.2(a), which shall be delivered by hand or by telephonic facsimile transmission
confirmed by telephone to Buyer's Fabrication Plant manager), or sent by postage
prepaid certified mail (return receipt requested) or by telephonic facsimile
transmission, to the
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<PAGE> 31
recipient party's address or facsimile number set forth below, and shall be
effective on the date the hand delivery or telephonic facsimile transmission is
received by the other party or, in the case of a Notice by mail, five days
after deposit in the mail. Any Notice given by telephonic facsimile
transmission shall be confirmed by postage prepaid certified mail (return
receipt requested). Notices shall be sent:
If to Seller:
Century Aluminum of West Virginia, Inc.
2511 Garden Road
Building A, Suite 200
Monterey, CA 93940
Attention: President
Facsimile No.: (831) 642-9082
with a copy to:
Century Aluminum Company
2511 Garden Road
Building A, Suite 200
Monterey, CA 93940
Attention: General Counsel
Facsimile No.: (831) 642-9328
If to Buyer:
Pechiney Rolled Products, LLC
8770 West Bryn Mawr Avenue
Chicago, IL 60631-3542
Attention: Eileen Burns Lerum
Facsimile No.: (773) 399-3527
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Attention: David W. Heleniak, Esq.
Alfred J. Ross, Jr., Esq.
Facsimile No.: (212) 848-7179
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<PAGE> 32
15.10.2. Any change in a party's address or telex or
facsimile transmission number for the purposes of notice under this Section
15.10 shall be communicated to the other parties in the manner set forth in
this Section 15.10 for providing notice.
15.11. ILLEGALITY; SEVERABILITY.
15.11.1. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Applicable
Law or public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
15.11.2. If any provision of this Agreement is
prohibited or unenforceable in any jurisdiction, any such prohibition or
non-enforceability shall not by that fact alone render such provision invalid or
unenforceable in any other jurisdiction.
15.11.3. To the extent permitted by Applicable Law,
each of Seller and Buyer hereby waives any provisions of any Applicable Law
which render any provision of this Agreement prohibited or unenforceable in any
respect.
15.12. NO BROKERS. Each of Seller and Buyer warrants that
neither it nor any of its Affiliates has engaged any broker or finder with
respect to the transactions under this Agreement, and each agrees to indemnify
the other against, and agrees to protect the other from, any and all
liabilities, obligations, losses, damages, claims, penalties and disbursements
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(including without limitation legal fees and expenses) of whatsoever kind and
nature arising out of any breach by the indemnifying party of the foregoing
warranty or incurred by the other with respect to or resulting from any claims
of any broker or finder engaged by the indemnifying party or any of its
Affiliates.
15.13. HEADINGS. Headings used in this Agreement are for
convenience of reference only, and shall not limit or otherwise affect the scope
or interpretation of any provision.
15.14. COUNTERPARTS. This Agreement may be signed in any
number of counterparts, and any single counterparts or a set of counterparts
signed, in either case, by all the parties hereto shall constitute a full an
original agreement for all purposes.
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<PAGE> 34
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their duly authorized representatives as of the date first
above written.
CENTURY ALUMINUM OF WEST VIRGINIA, INC.
By /s/ Gerald J. Kitchen
--------------------------------------
Name: Gerald J. Kitchen
------------------------------------
Title: Vice President
-----------------------------------
PECHINEY ROLLED PRODUCTS, LLC
By /s/ Thomas Sliker
--------------------------------------
Name: Thomas Sliker
------------------------------------
Title: Vice President and Treasurer
-----------------------------------
<PAGE> 35
EXHIBIT A
1. SEPTEMBER MONTHLY DECLARATION (2.4)
The Monthly Quantity for September 1999 has been
fixed at [Confidential Information filed separately with the SEC] Lbs.
2. OCTOBER MONTHLY DECLARATION
Notwithstanding the provisions of Section 2.3, Buyer
shall deliver to Seller the October Monthly Declaration within 15 days after
the Closing Date (as defined in the Stock and Asset Purchase Agreement dated as
of July 26, 1999 among Century Aluminum Company, Seller and Buyer).
<PAGE> 36
EXHIBIT B
Notwithstanding the provisions of Section 2.2, Buyer shall
deliver to Seller the Quarterly Forecast for the calendar quarter ending
December 31, 1999 within 15 days after the Closing Date.
<PAGE> 37
EXHIBIT C
MOLTEN ALUMINUM SPECIFICATIONS
1. All Molten Aluminum sold by Seller to Buyer hereunder shall be
unalloyed molten primary aluminum produced at the Reduction Plant, and having
for each Month an average composition (such average for a Month shall be the
weighted average of the analysis of each crucible delivered during the Month)
in compliance with P1020A specifications as published by the Aluminum
Association, subject to a Gallium content not in excess of 0.08% and a Vanadium
content not in excess of 0.05%, and subject to the further provision below:
Sodium - maximum Sodium daily average not more than 40
parts per million; provided, that before
installation and operation of the TAC System or
comparable equipment as stipulated in Section 3.6
of this Agreement, the acceptable maximum Sodium
monthly average shall be 80 parts per million.
2. IRON CONTENT.
(a) The quantity of High Iron Aluminum contained in the Molten Aluminum
delivered hereunder in any Month shall not exceed 2% thereof.
Buyer shall cast all High Iron Aluminum delivered in any Month in
excess of the percentage specified above for the account of Buyer
pursuant to Section 8.1.
(b) The quantity of P4050 contained in the Molten Aluminum delivered
hereunder in any Month shall not exceed 12% thereof.
Buyer shall cast all P4050 delivered in any Month in excess of the
percentage specified above for the account of Buyer pursuant to
Section 8.1.
The average composition of the Molten Aluminum delivered for each Month
determined for purposes of Section 1 of this Exhibit C shall include the High
Iron Aluminum and P4050 delivered during such Month up to the percentage
thresholds set forth in subsections (a) and (b), respectively, of this
Section 2.
3. CRUCIBLE DELIVERIES
Temperature of Molten Aluminum delivered to the scales in the hot metal tunnel
shall be equal to or greater than 900(Degrees)C.
<PAGE> 38
The average weight of the crucibles calculated on a calendar week basis will be
approximately 7,500 pounds, but may range as low as 5,000 pounds. In no event
will a crucible be overfilled (closer than six inches to the top).
It is understood that Molten Aluminum, even after skimming at the Cast House
tunnel scale, may contain some drosses and electrolytic bath. In order to
reduce Sodium and such content of drosses and electrolytic bath, Seller shall
purchase, install and operate TAC System and associated skimming equipment as
per Section 3.6 hereof. The remaining quantity of drosses and electrolytic bath
will be determined every Month by difference of weight between the sows cast
for Seller during the given Month and the molten primary aluminum used for this
purpose and shall be expressed as a percentage of the molten primary aluminum
("Pct"). The Pct shall be used for the given Month as Pct in the invoicing
formula as per Section 7.1(i) hereof.
4. QUALITY
If Seller foresees any change in raw material (alumina, coke, pitch, cast iron,
cryolite, bath) Seller will inform the Buyer by written notice as soon as
practical, typically at least 30 days prior notice except in the case of
emergencies, in which case Seller shall give notice as soon as practical in
light of the emergency. In the case of a significant change, Seller and Buyer
may agree to conduct a trial, processing a trial amount of material to ensure
the material so changed will not result in molten primary aluminum or sows, as
the case may be, not meeting the Molten Aluminum Specifications or Sow
Specifications, as the case may be. If it is demonstrated by Buyer that the raw
material change being evaluated causes a material adverse impact on its
processing, despite the fact that the molten primary aluminum or sows, as the
case may be, comply with the Molten Aluminum Specifications or the Sow
Specifications, as the case may be, Seller will discontinue use of that raw
material, provided reasonable alternatives exist.
Seller will keep track of all significant process parameters for a period of
five years.
Seller will develop and keep an up-to-date quality survey plan, which will be
discussed with Buyer. Buyer and Seller will put together a "customer/supplier"
committee whose purposes will be to foster positive customer/supplier
communications, provide an environment for continuous improvement in both
areas, and who will perform process quality audits (to include reduction and
sowing, and other related process steps). It is understood that such quality
audits may be restricted from certain areas or items due to confidentiality
issues.
5. WEEKLY AND MONTHLY REPORTS
To monitor quality and to provide a basis for adjustments to the price
according to the provisions of this Exhibit C, Buyer will prepare and deliver
to Seller weekly and monthly reports showing:
Quantity of Molten Aluminum delivered by Seller.
Percentage of drosses and electrolytic bath in Molten Aluminum.
Weekly average analysis of molten primary aluminum composition.
Average composition of Molten Aluminum and basis for any rebates related to
average composition.
- -2-
<PAGE> 39
Distribution of composition by grade, depicting percentage of purchased Molten
Aluminum meeting the P4050 specifications and purchased Molten Aluminum
with an iron content exceeding the P4050 specifications.
- - Quantity of molten primary aluminum poured as sow.
Quantity of Sows and sows poured - to be weighed on certified scales (such
scales are currently available in the Cast House).
Average analysis of Sows.
Individual analysis of heats (one heat equals one crucible, which may produce
up to five or six Sows).
Distribution of trace elements by grade of Molten Aluminum (e.g. P1020A,
P1020B, P1020C and P1020D) depicting the percentage of Molten Aluminum by
grade and the basis for any castings of offgrade Molten Aluminum pursuant
to this Exhibit C.
Any other relevant information as may be agreed by the parties.
6. RELATED MATTERS
Buyer and Seller agree to develop further procedures for the handling of Molten
Aluminum, treatment of mobile equipment, Sow molds, crucibles, and other such
procedures as may be necessary to operate efficiently and cooperatively under
this Agreement.
- -3-
<PAGE> 40
EXHIBIT D
SOW SPECIFICATIONS
COMPOSITION SPECIFICATIONS: All Sows cast by Buyer for Seller in any
Month hereunder shall be unalloyed primary aluminum having for each Month an
average composition in compliance with P1020A specifications as published by
the Aluminum Associations, subject to a Gallium content not in excess of 0.08%
and a Vanadium content not in excess of 0.05% (the "SOW SPECIFICATIONS"),
subject to the further provisions below.
All sows (other than Sows) cast by Buyer for Seller shall be unalloyed
primary aluminum having for each Month the same average specifications as the
molten primary aluminum (other than Molten Aluminum) delivered by Seller to
Buyer during such Month.
WEIGHT AND SHAPE: Sows and sows weighing the nominal standard weight
of 1,500 Pounds each, in Seller's molds and marked in accordance with P1020A
specifications.
OTHER QUALITY REQUIREMENTS:
1. Each Sow and each sow shall be skimmed and poured so that the
surface is free of surface and/or entrained salts, excessive
skim, surface contamination, corrosion, or seams and folds
caused by multiple pours.
2. Buyer shall cast Sows and/or sows for Seller with the same
care and to the same standards it uses in casting sows for
its own use.
3. Each Sow and sow shall clearly display the heat number on its
side.
4. Every shipment shall be accompanied by chemical analysis for
each heat. Each shipment shall be accompanied with a sample
button for each heat.
5. Each Sow and sow shall be poured level so it can be stacked
properly.
6. There will be no excessive splashing on the sides of Sows or
sows.
4
<PAGE> 1
Exhibit 2.4
AMENDED AND RESTATED SHARED FACILITIES AND SERVICES AGREEMENT
AGREEMENT ("Agreement"), made this 20th day of September 1999
by and between Century Aluminum of West Virginia, Inc. ("Century"), and Pechiney
Rolled Products LLC ("Pechiney").
WHEREAS Century owns and operates a reduction facility, a
casting house, a multi-purpose rolling mill and related assets and property in
Ravenswood, West Virginia (collectively, the "Ravenswood Complex");
WHEREAS the various components of the Ravenswood Complex have
been operated by Century as a single integrated facility;
WHEREAS the Ravenswood Complex will be divided into two
separately operated and managed facilities, to be known as the Pechiney Site and
the Century Site (each a "Site");
WHEREAS Century Aluminum Company, Century and Pechiney have
entered into a Stock and Asset Purchase Agreement dated July 26, 1999 (the
"Purchase Agreement"), pursuant to which Pechiney has agreed to acquire the
Pechiney Site;
WHEREAS there are certain services, facilities and related
physical assets that will be shared between the two Sites and the parties
provided therefor in the Shared Facilities and Services Agreement dated as of
July 26, 1999 (the "July Agreement"), and
WHEREAS, the committee established pursuant to the July
Agreement has met and the parties have determined as a result thereof that it is
in their best interest to amend and restate the July Agreement in its entirety
to reflect the recommendations of that committee.
NOW THEREFORE, in consideration of one dollar and other
valuable consideration and in consideration of the mutual covenants herein
contained, the parties do hereby agree as follows:
The July Agreement is amended and restated to read in its
entirety as follows:
1. Division of Premises. Pursuant to the Purchase Agreement, a
division of the Ravenswood Complex has been agreed upon by Century and Pechiney
as shown on the site plan entitled Survey of Century Aluminum of West Virginia
Operating Fabrication Plant located in Union District of Jackson County on the
waters of the Ohio River, State of West Virginia, prepared by Point Surveying
and Mapping, Delbert F. Bratcher W.V.P.S. No. 867 and dated May 18, 1999,
revised September 17, 1999, which has been duplicated and recorded in the
Jackson County Registry of Deeds. A reduced photocopy of such plan is attached
hereto as Exhibit A. The parties shall cooperate with each other in taking such
other action as is necessary in dividing the Ravenswood Complex in a way that
results in compliance with existing zoning, land use, environmental and similar
laws and regulations and (b) seeking such permits, variances and changes to such
existing laws and regulations as are necessary to accomplish such division.
<PAGE> 2
2. [Intentionally left blank]
3. Shared Services. Set forth in Exhibit B hereto is a list of
shared services and facilities that will be utilized by each of the Century Site
and the Pechiney Site (the "Facilities") in the normal course of operations, and
the services to be provided by the Facilities and certain human services
departments (each a "Shared Service") of Pechiney or Century, as owner of a
Facility, to Pechiney or Century, as the case may be, with respect to such
Facility. Exhibit B further specifies the owner and manager of each Facility.
Annex A to Exhibit B describes the Facilities, shared services, and the
allocations of responsibilities and costs agreed with respect thereto, and Annex
A to Exhibit B is incorporated herein in its entirety and made a part of this
Agreement. Attached as Exhibits C, D, E, F, G and H hereto are agreements
between the parties to more fully effect certain of the agreed allocations
described in Annex A and other matters relating to the Shared Services (the
"Further Agreements").
4. Limitations. (a) Except as specifically provided in (x)
this Agreement (including Exhibit B), or (y) any Further Agreement, this
Agreement does not and shall not be deemed to constitute a lease or a conveyance
of any real property or premises, or to confer upon any party any right, title,
estate or interest in the Ravenswood Complex or any part thereof, including any
equipment or other assets.
(b) Except as otherwise expressly provided in (y) this
Agreement (including Exhibit B), or (y) any Further Agreement, no party shall
permit the whole or any portion of a Facility owned by the other party to be
occupied or utilized by any other person or entity, other than its officers,
directors and employees in the performance of their duties in the ordinary
course of business and operation of the Century Site and the Pechiney Site, as
the case may be.
5. Committee. Promptly upon execution of this Agreement, the
parties will appoint a committee ("Committee"), composed of not more than four
representatives consisting of two representatives selected by Century and two
representatives selected by Pechiney, the function of which is to:
(a) establish the contingency guidelines provided for in
Section 10(e) hereof;
(b) make recommendations regarding the Shared Facilities and
Shared Services to the extent contemplated in Annex A to Exhibit B; and
(c) make recommendations regarding such other items as shall
be referred to it by the parties.
The Committee shall not have the right or power to bind the
parties hereto, but shall forward its recommendations for consideration by the
parties promptly upon completion. The Committee shall complete its activities
within ninety (90) days from the date hereof, subject to extension of such
period by the parties hereto.
6. Easements. On the date hereof, the parties hereto granted
to each other certain easements as contemplated in the July Agreement and as set
forth in further detail in the
<PAGE> 3
Reciprocal Easement Agreement attached hereto as Exhibit H (the "Reciprocal
Easement Agreement").
7. Standards; Payment. Unless otherwise expressly provided in
this Agreement, or in a Further Agreement, the following shall apply from and
after the Closing with respect to all Shared Services provided pursuant to this
Agreement:
(a) A party obligated to perform a service under this
Agreement shall do so using standards of care and levels and manner of
performance consistent with good industry practice. All Facilities to be
operated by either party shall be operated and maintained in a manner consistent
with the obligations of that party to perform hereunder and so as not to
discriminate against the other party hereto. Unless otherwise agreed, all costs
and expenses of operating and maintaining a Facility shall be paid by the party
owning that Facility, subject to allocations and reimbursements as provided
herein or in any Further Agreement. Each party shall perform its obligations
with respect to a Shared Service without undue delay and shall keep its
respective equipment and Facilities which are necessary or useful to the
performance of its obligations in good working condition.
(b) (i) Except as otherwise specifically provided herein or in
any Further Agreement, all Shared Services shall be provided for an amount equal
to the providing party's Direct Costs for providing such Shared Service. Direct
Costs shall include, without limitation, wages and employee benefits of
personnel that are directly providing the Shared Service, as well as actual
supply, maintenance and other expenses of the providing party incurred in
providing the Shared Service and any and all other costs which are directly
generated by, and related to, the operation and maintenance of the relevant
Facility and the provision of the Shared Service ("Direct Costs"). Direct Costs
shall not include depreciation expense.
(ii) Except as otherwise specified herein or in any Further
Agreement, Direct Costs shall be allocated to the recipient of the Shared
Service based upon such recipient's actual usage.
(c) Each party shall render to the other a monthly statement
for amounts due for Shared Services or in any Further Agreement for the
immediately preceding calendar month, setting forth in reasonable detail the
services provided and Facilities used and the Direct Costs thereof. The
recipient shall pay the provider the invoiced amount in immediately available
funds within thirty (30) days after delivery of the invoice. Payments due on a
day other than a business day shall be made on the next succeeding business day.
Amounts due from Pechiney to Century, and from Century to Pechiney, hereunder or
under the Further Agreements, may be netted or set off one against the other.
(d) If an error is made in the calculation of any amount
payable by the recipient under this Agreement or in any Further Agreement, the
invoice to such recipient for the month immediately succeeding the month in
which such error was finally determined shall be increased or decreased, as the
case may be, by an amount equal to the amount of such overpayment or
underpayment, as the case may be.
<PAGE> 4
(e) If a party disputes the amount of any charge,
notwithstanding the provisions of Section 15 hereof, it shall pay the undisputed
amounts and shall set forth in writing those amounts to which it objects with a
reasonably detailed explanation of the basis for its objections. The parties
shall act in good faith and promptly resolve any such disputed amounts. Any such
dispute not so resolved shall be subject to the provisions of Section 15 hereof.
(f) Notwithstanding any other provision of this Agreement or
in any Further Agreement, interest shall accrue on any overdue amount payable
thereunder at a rate equal to one and one-half percent (1-1/2%) per month,
prorated for the number of days such overdue amounts are outstanding.
(g) Each party shall provide the other with such reasonable
information as the other may request to review and confirm the accuracy of the
monthly statements provided under Section 7(c) above. Each party shall keep
complete and accurate books and records of account relating to the cost of
Shared Services in accordance with Section 13(b) hereof.
(h) The recipient shall pay to the provider for each Shared
Service that is the subject of any sales or use tax imposed by any Governmental
Authority (as defined in Section 20), within fifteen (15) days after demand
therefor, an amount equal to the recipient's pro rata portion of the aggregate
amount of such sales and use taxes. Notwithstanding the foregoing, the recipient
shall use reasonable efforts to provide exemption certificates where available
and to calculate any applicable sales and use taxes and to make payment thereof
directly to the appropriate taxing authority.
8. Term and Termination. (a) Unless otherwise provided herein
or in a Further Agreement with respect to a specific Shared Service, this
Agreement shall have a term of eight (8) years commencing the date hereof with
respect to each Shared Service, provided that either party shall be entitled to
extend the term of this Agreement for one (1) additional term of eight (8) years
with respect to each Shared Service, upon notice thereof to the other given not
less than six (6) months prior to the expiration of the initial term.
(b) Unless otherwise provided herein or in a Further Agreement
with respect to a specific Shared Service, each of Century and Pechiney may, at
any time, terminate this Agreement as to any specific Shared Service it is the
recipient of hereunder on not less than six (6) months' prior written notice to
the providing party, unless such providing party is also a recipient of such
Shared Service and such cancellation would have the effect of depriving the
provider of the use or benefit of such Shared Service; provided, however, for
purposes of this Section 8, the loss or reduction of financial support alone
shall not be deemed to deprive the provider of the use or benefit of the Shared
Service.
(c) Except as otherwise provided herein or in a Further
Agreement, either party may terminate this Agreement as to any specific Shared
Service on not less than six (6) months' prior written notice if the
non-terminating party has not used such Shared Service during the twelve (12)
months immediately prior to the date of such notice. Termination of a specific
Shared Service shall become effective only upon receipt by the terminating party
of a written consent to such termination, which consent shall not be
unreasonably delayed or denied.
<PAGE> 5
(d) This Agreement may be terminated with respect to any
specific Shared Service but solely with respect to such Shared Service at the
option of:
(i) the recipient thereof, if the provider thereof fails to
supply the Shared Service in question or to perform in accordance with the terms
of this Agreement or any Further Agreement relating to such Shared Service any
other material term, covenant or agreement contained in this Agreement or such
Further Agreement on its part to be performed or observed with respect to such
Shared Service, if such failure shall remain unremedied for sixty (60) days
after notice thereof shall have been given by the recipient or, if the failure
is of a type that cannot reasonably be cured within sixty (60) days, failure to
initiate within such sixty (60) day period such action as reasonably can be
taken toward curing the same and/or failure to prosecute such action as promptly
as is reasonably possible after such action is initiated; or
(ii) the provider thereof, if the recipient thereof shall fail
to pay to the provider any amount due to the provider hereunder with respect to
the Shared Service in question, when the same becomes due and payable under this
Agreement, and any such failure shall remain unremedied for a period of thirty
(30) days after notice thereof shall have been given by the provider to the
recipient. The foregoing termination rights set forth in 8(d)(i) and 8(d)(ii)
shall be in addition to all other rights and remedies that the non-breaching
party may have against the breaching party with respect to such Shared Service
under this Agreement.
(e) Upon the discontinuation or termination of a Shared
Service hereunder, this Agreement shall be of no further force and effect for
such Shared Service except as to obligations accrued prior to the date of
discontinuation or termination. The party providing the Shared Service shall,
within thirty (30) days after discontinuation or termination of a Shared
Service, deliver to the other Party all property of the other party in the
possession of the servicing party, including, but not limited to, all books,
records, contracts, leases, receipts for deposits, and all other papers or
documents which are maintained by the servicing party and which pertain solely
to providing such service to the benefiting party. In addition, the servicing
party shall furnish to the benefiting party all such information and take all
such other actions as the benefiting party shall reasonably require to
effectuate an orderly and systematic transfer of the servicing party's duties
and activities, provided that the reasonable costs of the same shall be properly
reimbursed to the servicing party by the benefiting party with respect to the
Shared Service.
9. Level of Services. Subject to the terms and conditions of
this Agreement or any Further Agreement, services provided with respect to a
Shared Service shall be as follows:
(a) The party providing a Shared Service to the other party,
through its employees, agents, contractors or independent third parties, shall
provide to the other party the basic level of service reasonably necessary to
perform the tasks specified for such Shared Service. At all times during the
performance of Shared Services, all persons performing Shared Services who shall
be in the employ and/or under the control of the party providing the service
(including agents, temporary employees and consultants) shall be construed as
being independent
<PAGE> 6
from the benefiting party and not as employees of the benefiting party and shall
not be entitled to any payment, benefit or perquisite directly from the
benefiting party on account of such services.
(b) The servicing party shall not be required to perform
services hereunder, or under a Further Agreement that conflict with any
applicable legal requirement.
(c) The benefiting party shall provide timely decisions and
reasonable written policy guidelines as required for the performance of Shared
Services by the party providing a Shared Service to the benefiting party.
(d) From time to time, a party may desire services in excess
of the level of basic Shared Services that may have been agreed to by the
parties. A party shall have the right to request such services by providing the
other party with written notice ("Requested Services"); provided, however, that
no such request relating to services provided for in a Further Agreement may be
made except as provided in such Further Agreement. To the extent that it can
reasonably do so, the servicing party shall provide the Requested Services on
the basis requested by the benefiting party and for a fee agreed upon by the
parties pursuant to the terms and conditions of this Agreement or any Further
Agreement.
(e) In the event that a servicing party shall deem it
necessary in the performance of a service hereunder or under a Further Agreement
to obtain the services of any third party or to obtain additional leased
equipment or other facilities in connection therewith, that will result in an
additional cost to the benefiting party, the servicing party shall obtain the
written approval of the benefiting party prior to obtaining any such third party
services or additional leased equipment or other facilities. Each of the parties
agrees that any such third party agreement shall be terminable upon written
request by the benefiting party subject to any outstanding commitments. The cost
of such additional third party services and/or additional equipment and
facilities shall be billed to and paid for by the benefiting party in the manner
set forth in Section 7 hereof, or in a Further Agreement. Notwithstanding the
foregoing, the prior written approval shall not be required in cases of
emergency where the failure to obtain such third party services or equipment or
other facilities, in the best judgment of the servicing party, will cause
economic harm to the benefiting party in excess of the cost to be incurred in
obtaining such third party services and/or additional equipment. Oral or written
notice and an estimate of the costs shall be provided to the benefiting party
within twenty-four (24) hours after an emergency.
10. Force Majeure. (a) Upon the occurrence and during the
continuance of an Event of Force Majeure (as defined in Section 20), the
obligation of a party to provide one or more Shared Services or the obligation
of a party to accept one or more Shared Services, as the case may be, shall be
temporarily suspended; provided, however, that: (i) such suspension shall relate
solely to that portion of the Shared Services that the party seeking to rely on
such Event of Force Majeure is unable to perform or accept, as the case may be;
and (ii) such suspension shall be in effect only for such period during which
such Event of Force Majeure shall be continuing. If such Event of Force Majeure
results in a partial rather than a total inability on the part of the provider
to perform or the recipient to receive the Shared Service, the recipient or the
provider,
<PAGE> 7
respectively, shall be entitled to receive or provide the pro rata portion of
any available quantity or level of such Shared Service.
(b) Upon the occurrence of an Event of Force Majeure, the
party claiming such event shall provide prompt written notice to the other party
that specifically describes the circumstances causing the Event of Force
Majeure, the Facilities affected by such Event of Force Majeure and the Shared
Services suspended on account of each Event of Force Majeure, provided that any
failure to provide such notice shall not affect the rights of the party claiming
such event except to the extent that the other party has suffered actual
prejudice thereby.
(c) If an Event of Force Majeure prevents a party from fully
performing its obligations under this Agreement or a Further Agreement, such
party shall diligently attempt to remove the cause of its inability to perform
fully and shall keep the other party advised on a regular basis of its progress
in removing the cause of its inability to perform fully its obligations
hereunder.
(d) Upon the occurrence and during the continuance of an Event
of Force Majeure, the recipient of a Shared Service which is affected by such
Event of Force Majeure shall be entitled to obtain substitute services or
facilities on a temporary basis. If an Event of Force Majeure continues for not
less than sixty (60) days, the recipient may elect to obtain any substitute
service or facility on a permanent basis, and if such election is made, then on
the later of: (i) the thirtieth (30th) day after the date on which the recipient
notifies the provider that it intends to exercise its right to obtain permanent
substitute services or facilities, and (ii) any date of termination specified in
such notice, the provider will have no further obligation to provide and the
recipient shall have no further obligation to accept such Shared Services and
all costs associated with such Shared Services shall cease to accrue; provided,
however, that if the provider also is a recipient of the Shared Service in
question and such cancellation would have the effect of depriving the provider
of the use or benefit of such Shared Service, then the recipient shall only be
entitled to obtain substitute services or facilities on a permanent basis after
receiving the prior written consent of the provider, which consent shall not be
unreasonably withheld.
(e) In the event that a party which is providing a Shared
Service pursuant to the terms of this Agreement or a Further Agreement becomes
unable to operate the relevant Facility and provide such Shared Service due to a
work stoppage or other Event of Force Majeure (an "Interruption"), the other
party shall have the right to assume operation of the affected Facility for so
long as the party otherwise responsible for providing the Shared Service shall
remain unable to operate the relevant Facility, provided such assumption of
operation shall not have material adverse consequences to the affected provider.
The Committee shall establish contingency guidelines applicable to an
Interruption with respect to the Shared Services which will set forth the
procedures pursuant to which the employees of the other party will operate the
affected Facility during the Interruption. To that effect, a party will provide
to employees of the other party training and access to information sufficient to
allow such employees to operate the Facilities providing Shared Services safely
and efficiently during an Interruption. The parties hereby undertake to use
commercially reasonable efforts in the event of an Interruption to allow the
employees of the other to operate an affected Facility or Shared Service.
<PAGE> 8
(f) The parties hereto acknowledge and agree that, absent the
provisions of Section 10(e) they would not have entered into this Agreement and
that irreparable damage may occur in the event that such provisions are not
performed in accordance with their terms. The parties hereto agree that each
party shall be entitled, in addition to any other remedy at law or in equity, to
equitable relief, including injunctive relief and specific performance of the
terms of such provisions, in the event of a breach by the other party of any of
the provisions of any of such sections.
11. Temporary Suspension of Shared Services for Repairs and
Improvements. (a) To allow the party that owns a Facility and provides a Shared
Service to maintain and/or make necessary repairs or improvements to the
Facility, such party may elect to reduce, interrupt, allocate, alter or change
(each activity a "Change") the relevant Shared Services that it is required to
provide under this Agreement or a Further Agreement, provided that:
(i) The party desiring to make the Change shall give notice of
such action, describing in reasonable detail such Change and the reasons
therefor, to the other party, pursuant to Section 19(h) hereof; and
(ii) The party that is the recipient of the Shared Service in
question provides prior written consent for the Change, which consent shall not
be denied unreasonably. Prior written consent shall not be required with respect
to Changes that are (x) required by any applicable law, rule, regulation or
Governmental Order (as defined in Section 20), or (y) in the reasonable opinion
of the party effecting the Change, required to preserve the safety or
environmental standards at the relevant Site or Facility or required by any
other contractual undertakings in existence on the date of the Closing to which
such party is subject.
(b) Except as the parties may otherwise agree in writing, a
party that desires to undertake a Change, as described in Section 11(a) hereof,
shall be responsible for any costs associated with effecting the change;
provided, however, that (i) a portion of the costs of any Change which shall be
required by any applicable law, rule, regulation or Governmental Order or
required to preserve safety or environmental standards as provided for in
Section 11(a)(ii)(x) and (y) above shall be allocated to the party receiving the
relevant Shared Service pro rata to its usage of the relevant Facility, and (ii)
this Section 11(b) shall not apply to costs related to activities that are part
of a standard periodic maintenance program. In the event of an inconsistency in
application between the provisions of this Section 11(b) and of Section 12(b),
the provisions of Section 12(b) shall govern.
(c) The party undertaking any Change described in Section
11(a) hereof shall use all reasonable efforts to allocate the effects of such
Change in a manner so that each party receives its pro rata portion of any
available quantity or level of any affected Shared Service.
(d) Upon the occurrence and during the continuance of any
Change referred to in this Section 11, the parties shall cooperate to attempt to
arrange for Shared Services to be furnished in an alternate manner, to minimize
or reduce the effect on their operations of such Change of a Shared Service, and
to otherwise engage in a course of conduct intended to enable
<PAGE> 9
the provider thereof to provide and the recipient thereof to receive the
suspended Shared Service, in each case without imposing any obligations on
either party in addition to those otherwise imposed by this Agreement or a
Further Agreement as may be the case, including, without limitation, obligations
that would increase the costs that are to be borne by the parties.
12. Alteration of Facilities. (a) Except as provided herein,
or in a Further Agreement, no party shall make any alteration to its Site or to
any Facility without prior written consent of the other party if such alteration
would materially adversely affect such party's ability to provide Shared
Services to such other party on the terms and conditions of this Agreement or a
Further Agreement or that would materially increase the amounts that are payable
by such other party in connection with Shared Services; provided that the
restrictions of this Section 12(a) shall not apply to any alteration: (i) that
is required by any law, rule, regulation or Governmental Order; (ii) that, in
the reasonable opinion of the party making the alteration, is required to
preserve safety or environmental standards at the Site or Facility or is
required by any other contractual undertakings in existence on the date of the
Closing to which the party making the alteration is subject; or (iii) if the
amounts that are payable by such other party in connection with Shared Services
provided to such other party would not be materially increased as a result of
such alteration.
(b) Should a party determine that alterations and/or
improvements are needed or desirable on a Facility, then such party shall notify
in writing the other party, specifying the nature and scope of the work to be
performed and the reason therefor. Costs for such alterations and/or
improvements will be borne by the demanding party, unless (i) the alterations or
improvements are required in order to maintain the then-existing capabilities of
the relevant Facility, in which case the costs shall be allocated among the
parties pro rata according to their usage of the relevant Facility, (ii) the
non-demanding party agrees to pay a portion of such costs, in which case such
non-demanding party shall be entitled to receive such portion of the benefits of
the alteration and/or improvement as corresponds to its portion of the costs, or
(iii) the work to be performed is required by, or for compliance with, any law,
rule, regulation or Governmental Order, in which case the parties shall share
the costs of such alteration and/or improvement pro rata according to their
usage of the relevant Facility.
13. Additional Covenants.
(a) Inspection, Access and Testing. At scheduled times and
intervals to be agreed upon by the parties, each of Century and Pechiney shall:
(i) permit either the other party or, at such other party's
option, independent public accountants mutually acceptable to the parties, to
inspect the books and records of such other party relating to the Shared
Services furnished pursuant to this Agreement, provided that such inspection and
audit shall be conducted for the sole purpose of determining whether the costs
charged have been assessed in accordance with the terms of this Agreement and
the Further Agreements, and the cost of such inspection shall be borne by the
requesting party; and
(ii) permit the other party or any of such other party's
agents or representatives to visit its Site in order to: (A) consult with those
agents of the requested party
<PAGE> 10
designated by such party regarding Shared Services to be provided hereunder and
the Further Agreements, and (B) require that meter calibration and/or other
tests be conducted to verify the accuracy of equipment used to determine the
quantity or quality of Shared Services provided hereunder and the Further
Agreements, provided that: (y) no party shall be entitled to require meter
calibration and/or other tests permitted by clause (B) above any more frequently
than every thirty (30) days; and (z) each party shall cause its employees,
agents and representatives to comply with all of the other party's rules and
regulations pertaining to security, safety and property protection and follow
the route or routes designated by such party.
(b) Books and Records. Each party shall keep proper books of
record and account, in which full and correct entries shall be made of all
financial transactions related to Shared Services and the performance of its
obligations under this Agreement and the Further Agreements, including, without
limitation, recording the levels or quantities of Shared Services provided by or
on behalf of that party to the other party under this Agreement and the Further
Agreements, the costs and expenses associated therewith and amounts paid by or
on behalf of such party. In addition to the obligations set forth in Section
13(a), each party shall make such books and records available to the other party
for inspection upon reasonable request.
(c) Authorizations and Permits. (i) Except as otherwise
specified herein, each party shall maintain in full force and effect all
authorizations, waivers, consents, permits (including all Environmental Permits
(as defined in Section 20)), orders and approvals and make or cause to be made
all registrations, filings, permit modifications or transfers (including any
Environmental Permit modifications or transfers) and notices with or to all
third parties and Governmental Authorities necessary or appropriate for such
party to provide the Shared Services with respect to which it is the provider
and to maintain all Facilities owned by it; and (ii) with respect to such
authorizations, waivers, consents, permits, orders and approvals that will
materially affect the manner in which a party operates its Site, such party
shall consult with and allow the other to participate in discussions with any
Governmental Authority or third party regarding compliance with any such
authorizations, waivers, consents, permits, orders or approvals and in the
making of any such registration, filing, permit transfer or notice now or
hereafter in effect or to obtain, modify or renew any such authorizations,
waivers, consents, permits, orders or approvals.
14. Reporting. Each party shall furnish to the other party:
(a) promptly, and in any event (except for emergency
situations or Events of Force Majeure) not later than thirty (30) days prior to
the commencement of a suspension or a reduction of a Shared Service, a statement
describing the nature, extent, effect and the anticipated duration of such
suspension or reduction of Shared Service;
(b) promptly upon receipt thereof, copies of any statement or
report to or notice from any Governmental Authority or third party that relates
to any authorization, waiver, consent, permit (including any Environmental
Permit), order or approval that relates to any Shared Service to be provided by
or on behalf of such party and that materially affects the manner in which the
other operates its Site;
<PAGE> 11
(c) promptly upon becoming aware thereof, notice of any event
or occurrence that results in any noncompliance by it with any applicable law,
rule, regulation, permit or authorization including, without limitation, any
Environmental Law or Environmental Permit insofar as such noncompliance will
adversely affect any Shared Service to be provided by or on behalf of it to the
other party or the performance of any of its other obligations under this
Agreement;
(d) within a reasonable period after becoming aware thereof,
notice of any event or contingency that may significantly increase the other
party's share of costs under this Agreement and any proposals to avoid or reduce
such cost increase; and
(e) promptly, and in any event not later than three (3)
business days prior thereto, notice of the date and time of all meter
calibrations or other tests conducted to verify the accuracy of the equipment
used to determine the quality, quantity or level of Shared Services.
15. Dispute Resolution. (a) In the event that any dispute,
claim or controversy shall arise as to whether either party hereto shall have
fulfilled its respective obligations under this Agreement or a Further
Agreement, the parties agree that within five (5) days after notification
thereof authorized representatives of the parties shall meet to resolve such
dispute, claim or controversy. If, within ten (10) days after the authorized
representatives first began such meetings the parties have not agreed to a
resolution, a Pechiney representative and a Century representative (other than,
in the case of each party, the aforementioned authorized representatives) shall
meet within five (5) days to resolve such dispute, claim or controversy. If,
within ten (10) days after such designated representatives first began such
meetings, the parties have not reached agreement, the dispute, claim or
controversy shall be determined in the manner set forth in Section 15(b) hereof.
(b) If, within five (5) business days after the date referred
to in the last sentence of Section 15(a) hereof the dispute, claim or
controversy in question remains unresolved, such dispute, claim or controversy
shall be finally resolved by arbitration by three arbitrators in New York City
pursuant to the Rules of Conciliation and Arbitration of the International
Chamber of Commerce, and any award rendered by an arbitral panel in accordance
therewith shall be final and binding on the parties and nonappealable. By
execution of this Agreement each of the parties consents to the jurisdiction of
such arbitral panel for itself and in respect of its properties. Any costs of
the proceedings described in this Section 15(b) shall be borne by the parties
equally.
(c) Notwithstanding the other provisions of this Section 15,
if a Further Agreement establishes a dispute resolution procedure, such
procedure shall be used by the parties to resolve any dispute, claim or
controversy between them which arises solely under such Further Agreement. If a
dispute, claim or controversy arises under both this Agreement and a Further
Agreement, the provisions of this Section 15 shall apply thereto.
16. Liability Generally. Neither party shall be responsible
for special or consequential or incidental damages (including lost profits) of
the other party arising out of such party's performance or non-performance of
this Agreement or a Further Agreement, provided
<PAGE> 12
that nothing herein shall limit a party's liability for damages (other than the
exclusion of special, consequential or incidental damages), including costs of
repair and remediation, to its or the other party's Site. Each party shall use
all reasonable efforts to minimize its damages caused by the other party.
17. Indemnification. (a) Subject to the limitations set forth
in Section 16 and Sections 17(c) and (d) below, Century hereby agrees to
indemnify, hold harmless and defend Pechiney and Pechiney's Affiliates against
and in respect of any and all Losses (including reasonable attorneys' fees and
litigation expenses) incurred by Pechiney and Pechiney's Affiliates caused by or
arising from (i) acts of Century in connection with the performance of (or
failure to perform) any of Century's obligations under this Agreement and the
Further Agreements that would constitute negligence, recklessness or willful
misconduct of Century and (ii) any condition, event or act caused or contributed
to by Century at or affecting a Facility owned by Pechiney.
(b) Subject to the limitations set forth in Section 16 and
Sections 17(c) and (d) below, Pechiney hereby agrees to indemnify, hold harmless
and defend Century and Century's Affiliates against and in respect of any and
all Losses (including reasonable attorneys' fees and litigation expenses)
incurred by Century and Century's Affiliates caused by or arising from (i) acts
of Pechiney in connection with the performance of (or failure to perform) any of
Pechiney's obligations under this Agreement and the Further Agreements that
would constitute negligence (or, in the case of the provision of fire
protection, security and alarm services, as provided for in Section 17 of Annex
A to Exhibit B hereto, gross negligence), recklessness or willful misconduct of
Pechiney and (ii) any condition, event or act caused or contributed to by
Pechiney at or affecting a Facility owned by Century.
(c) A party seeking indemnification pursuant to this Section
17 (the "Indemnified Party") shall give prompt notice to the party from whom
such indemnification is sought (the "Indemnifying Party") of the assertion of
any claim, or the commencement of any action, suit or proceeding, in respect of
which indemnity may be sought hereunder, and will give the Indemnifying Party
such information with respect thereto as the Indemnifying Party may reasonably
request, but failure to give such notice shall not relieve the Indemnifying
Party of any liability hereunder, except to the extent that the Indemnifying
Party has suffered actual prejudice thereby. The Indemnifying Party shall have
the right to undertake the defense of any such claim asserted by a third party
and the Indemnified Party shall cooperate in such defense and make available all
records and materials requested by the Indemnifying Party in connection
therewith at the Indemnifying Party's expense. The Indemnified Party shall be
entitled to participate in such defense, but shall not be entitled to
indemnification with respect to the costs and expenses of such defense if the
Indemnifying Party shall have assumed the defense of the claim with counsel
reasonably satisfactory to the Indemnified Party. The Indemnifying Party shall
not be liable for any claim settled without its consent, which consent shall not
be unreasonably withheld or delayed. The Indemnifying Party may settle and claim
without the consent of the Indemnified Party, but only if the settlement
involves solely monetary damages.
(d) No owner of a Site shall be responsible for Losses
suffered by the other party or its Affiliates or their officers, directors,
employees or agents arising out of or in
<PAGE> 13
connection with Shared Services provided on such owner's Site, except to the
extent (but subject to Section 16) such Losses resulted from the negligence,
recklessness or willful misconduct of the owner of such Site.
18. Insurance. During the term of this Agreement, each of
Century and Pechiney shall, at its own cost and expense:
(a) provide and keep in force commercial general liability
insurance against liability for death, personal injury and property damage in
amounts, including without limitation in respect of injuries to any one person
and injuries from any one occurrence and in respect of property damage from any
one occurrence that are no less than those customarily maintained by companies
similarly situated to the parties in respect of their operation of facilities
similar to the Sites.
(b) provide and keep in force insurance providing against loss
by fire, lightning, the perils of extended coverage and malicious mischief
covering its assets at the Ravenswood Complex and any other alterations,
improvements, equipment, furnishings, fixtures, property and contents on its
Site (collectively, "Insured Property"), in amounts that are no less than those
customarily maintained by companies similarly situated to the parties in respect
of their operation of facilities similar to the Sites.
Each of Century and Pechiney shall cause each policy carried
by it insuring, as to itself, its Site and Insured Property against loss,
damage, or destruction by fire or other casualty, to be written in a manner so
as to provide that the insurance company waives all rights of recovery by way of
subrogation against Century or Pechiney, as the case may be, in connection with
any loss or damage covered by any such policy.
All policies of insurance required hereunder shall be written
and signed by solvent and responsible insurance companies reasonably
satisfactory to the parties. Unless otherwise provided herein, certificates of
insurance for insurance coverages required hereunder shall be deposited with the
parties prior to occupancy of any Facility. Not less than fifteen (15) days
prior to the expiration dates of said insurance coverages, renewal certificates
shall be deposited with the parties. If a party fails to deposit with the other
any certificate of insurance required hereunder, after thirty (30) days advance
notice and prior to the provision of such certificate, such other party may, at
its option, obtain the insurance coverages in respect of which the required
policy or certificate was not provided, at the expense of the breaching party,
and the cost thereof shall be paid to the non-breaching party upon written
demand.
<PAGE> 14
19. Miscellaneous.
(a) Assignment. No party may assign or delegate this
Agreement, any Further Agreement or the rights and obligations created hereunder
and thereunder without the prior written consent of the other, whether by way of
transfer, merger with or into such party, consolidation, reorganization or
otherwise, except in connection with a sale or transfer of the assigning party's
entire interest in its Site, in which event such assignment of this Agreement
and any Further Agreement then in effect to the transferee of the property shall
be required. Any purported assignment without such consent shall be void and
shall constitute a breach of this Agreement. Upon the sale or conveyance of all
or any portion of a Site, the Site owner shall cause the purchaser or transferee
to expressly assume the obligations of the Site owner hereunder in respect of
the agreements made herein.
Subject to the foregoing, all of the terms and provisions of
this Agreement and Further Agreements shall be binding upon, and inure to the
benefit of, and shall be enforceable by, the respective successors and assigns
of the parties hereto.
(b) Waiver. No failure or delay on the part of either party in
the exercise of any power, right or privilege arising hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege.
(c) Severability. If any provision of this Agreement is for
any reason found to be ineffective, unenforceable or illegal, such condition
shall not affect the validity or enforceability of any of the remaining portions
hereof; provided, further, that the parties shall negotiate in good faith to
replace any ineffective, unenforceable or illegal provision with an effective
replacement as soon as is practical.
(d) Multiple Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original but all of
which together constitute one and the same instrument.
(e) No Partnership or Agency Created. Nothing contained herein
or done in pursuance of this Agreement or any Further Agreement shall constitute
the parties as entering upon a joint venture or partnership, or shall constitute
either party the agent for the other party for any purpose or in any sense
whatsoever. Neither party shall hold itself out to any third party as a partner
or agent of the other party hereto contrary to the terms of this Section and
neither party shall be or become liable for any representation, act or omission
of the other party which is contrary to the terms of this Section.
(f) Choice of Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York, without
reference to the conflict of laws provisions thereof.
<PAGE> 15
(g) Effect of Headings. The headings of the sections and
subsections contained herein are for convenience of reference only and are not
intended to be and shall not be construed as part of or to affect the meaning or
interpretation of this Agreement.
(h) Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic or
digital transmission method; two business days after it is sent, if sent for
expedited delivery by recognized international delivery services (e.g., Federal
Express); and upon receipt, if sent by certified or registered mail, return
receipt requested. In each case notice shall be sent to:
If to Century, addressed to:
2511 Garden Road
Building A, Suite 200
Monterey, CA 93940
Attention: Gerald J. Kitchen, Esq.
Executive Vice President, General Counsel
and Chief Administrative Officer
Tel: (831) 642-9300
Fax: (831) 642-9328
With a copy to the manager of the Reduction Plant at
the Ravenswood. Site.
If to Pechiney, addressed to:
Pechiney Rolled Products, LLC
8770 West Bryn Mawr Avenue
Chicago, IL 60631
Attention: Eileen Burns Lerum, Esq.
Tel: (773) 399-8695
Fax: (773) 399-3527
With a copy to the manager of the Fabrication Plant
at the Ravenswood Site.
or to such other place and with such other copies as such party may designate as
to itself by written notice to the others.
(i) Entire Agreement; Controlling Documents. This Agreement is
intended to be a complete and integrated agreement with respect to the subject
matter thereof, superseding all prior agreements (except for the Purchase
Agreement and the Ravenswood Indemnity Agreement (as defined in the Purchase
Agreement)) and understandings with respect thereto. This Agreement may not be
amended or modified except by an instrument in writing signed by
<PAGE> 16
the parties hereto. Any other provision of this Agreement to the contrary
notwithstanding (other than Section 15(c)), in the event of any inconsistencies
between any provisions of this Agreement and any of the Further Agreements, the
provisions of the relevant Further Agreement shall be controlling. With respect
to the provisions regarding indemnification contained in Section 17 hereof, in
the event of any inconsistencies between any of such provisions and the
provisions regarding indemnification set forth in the Purchase Agreement, the
provisions of the Purchase Agreement shall be controlling.
(j) Waiver of Jury Trial. Each party hereby irrevocably waives
all right to trial by jury in any action, proceeding or counterclaim (whether
based on contract, tort or otherwise) arising out of or relating to this
Agreement or any Further Agreement or the actions of any party in the
negotiation, administration, performance and enforcement thereof.
(k) Relationship of Parties. In all matters relating to this
Agreement or any Further Agreement, both parties will be contractors and will be
solely responsible for the acts of their employees, officers, directors and
agents including any third parties providing Shared Services or Shared
Facilities on a party's behalf. Employees, agents or contractors of a party
shall not be considered employees, agents or contractors of the other party.
Neither party shall have the right, power or authority to create any obligation,
express or implied, on behalf of the other party.
(l) Survival. Without prejudice to the survival of the other
agreements of the parties hereunder, the agreements of the parties pursuant to
Sections 7 (to the extent applicable), 16 and 17 hereof shall survive the
termination of this Agreement.
(m) Estoppel Certificate. Each party agrees to furnish to the
other party within ten (10) days of the request therefor, at the request of the
other party, an executed certificate signed by such party containing a list of
the Shared Services and Facilities provided by such party under this Agreement
that are then in effect, and confirming the accuracy of such list.
(n) Business Interference. Neither party shall take any action
which would violate the other's labor contracts, if any, affecting the
Ravenswood Complex or its Site, or create any unreasonable building construction
interruption, work stoppage, picketing, labor disruption or dispute, or take any
action which is likely to interfere with the business of the other party at the
Facilities without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed.
(o) Further Assurances. From time to time, each party agrees
to execute and deliver such additional documents and to provide such additional
information and assistance as the other party shall reasonably require in order
to carry out the terms of this Agreement and any Further Agreement.
(p) Regulations. All employees of each party when on the
property of the other party in connection with this Agreement and any Further
Agreement and the easements to be granted pursuant thereto and the services to
be provided hereunder will conform to the rules and regulations concerning
health, safety and security of such other party with respect to its Site.
<PAGE> 17
(q) Compliance with Laws. The parties hereto shall use
reasonable efforts to comply fully with all applicable requirements of law in
connection with the performance of its obligations and the receipt of services
hereunder and any Further Agreement.
20. Certain Definitions. As used in this Agreement, the
following terms have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Affiliate" means, as to any person or entity, any other
person or entity that, directly or indirectly, controls, is controlled by or is
under common control with such person or entity or is a director or officer of
such person or entity. For purposes of this definition, the term "control"
(including the terms "controlling", "controlled by" and "under common control
with") of a person or entity means the possession, direct or indirect, of the
power to vote 50% or more of the voting stock of such person or entity or to
direct or cause the direction of the management and policies of such person or
entity, whether through the ownership of voting stock, by contract or otherwise.
"Environmental Law" means any federal, state or local law,
statute, ordinance, rule, regulation or common law, and any legally binding
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent order, consent decree or judgment, in each case in
effect and as amended as of the date hereof or at any time while this Agreement
remains in effect, regulating the generation, use, handling, transportation,
treatment, storage, disposal, release or discharge of any Hazardous Material.
"Environmental Permits" means all permits, approvals,
regulations and other governmental consents of any Governmental Authority
necessary for the use, occupancy or operation of the Sites and required by any
applicable Environmental Law.
"Event of Force Majeure" means, for any person or entity, any
event, circumstance or condition that is beyond the control of such person or
entity and that prevents such person or entity from performing, in whole or in
part, its obligations under this Agreement or any Further Agreement. Without
limiting the generality of the foregoing, the following occurrences shall be
deemed to be Events of Force Majeure: (a) Acts of God, fire, explosion,
accident, flood storm or other natural phenomenon; (b) war (whether declared or
undeclared), riot, blockade, sabotage or acts of public enemies; (c) national
defense requirements; (d) compliance with any law, rule, regulation or
Governmental Order that (i) becomes effective after the date of the Closing and
(ii) is binding on the person or entity seeking to rely on such law, rule,
regulation or Governmental Order to excuse performance and such person's or
entity's compliance therewith is not voluntary or optional; (e) strikes,
lockouts or injunctions (it being understood that nothing herein shall require a
person or entity to settle such or any other kind of labor dispute except on
such terms as shall be satisfactory to such person or entity); (f)
unavailability (for reasons other than the cost thereof) of adequate fuel,
power, raw materials, labor or transportation facilities; and (g) breakage or
failure of key machinery or key equipment.
<PAGE> 18
"Governmental Authority" means any United States federal,
state or local or any foreign government, governmental, regulatory or
administrative authority, agency or commission or any court, tribunal or
judicial or arbitral body.
"Governmental Order" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
"Hazardous Material" means petroleum and petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and any other chemicals, materials or
substances, in each case and to the extent regulated under any applicable
Environmental Law.
"Losses" means any and all liabilities, losses, damages,
claims, costs, interests, judgments, fines, amounts paid in settlement and
expenses actually incurred by a party.
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have had this Agreement
executed by their respective authorized officers as of the date first written
above.
CENTURY ALUMINUM OF WEST VIRGINIA, INC.
By: /s/ Gerald J. Kitchen
-----------------------------------------
Its: Vice President
-----------------------------------------
PECHINEY ROLLED PRODUCTS, LLC
By: /s/ J.M. Schemm
-----------------------------------------
Its: Vice President
-----------------------------------------
<PAGE> 20
EXHIBITS
A - Site Plan
B - List and Description of Shared Services
C - Power Subcontract
D - Partial Assignment Agreement with respect to Gas Contracts
E - Environmental Services Agreement
F - Tank Farm Lease Agreement
G - Met Tower License Agreement
H - Reciprocal Easement Agreement
<PAGE> 21
EXHIBIT A
SITE PLAN
<PAGE> 22
EXHIBIT B
<TABLE>
<CAPTION>
SHARED SERVICE OWNER MANAGER
- -------------- ----- -------
<S> <C> <C>
Well Water Pechiney Pechiney
Fire Water Each Each
Drinking Water Each Each
Secondary Wastewater Treatment Century Century
Steam Century Century
Transmission Facility - Century Century
Except Single Circuit Lines that feed
Pechiney Site and Substation thereat
Transmission Facility - Single Circuit Pechiney Pechiney
Lines that feed Pechiney Site and
Substation thereat
Dust Waste Facility Pechiney Pechiney
Solid Waste Facility Pechiney Pechiney
Aluminum Scrap Each Each
Rail lines - Century Site Century Century
Rail lines - Pechiney Site Pechiney Pechiney
River Dock Century Century
Gas Facilities Pechiney Site Pechiney Pechiney
Gas Facilities Century Site Century Century
Compressed Air Each Each
Stores Pechiney Pechiney
(Century to construct own within 18 months)
Outfalls/Blocking Wells Managed by agreement under Exhibit E
Metal Analysis Lab Pechiney Pechiney
Fire, Medical, Security, Alarm System Pechiney Pechiney (if and until split)
Administrative Offices Pechiney Pechiney
(Century to construct own within 6-12 months)
Administrative Services Pechiney Pechiney
(HR/Accounting/Purchasing) (Century to establish own within 3-6 months)
Parking Each Each
</TABLE>
<PAGE> 23
<TABLE>
<S> <C> <C>
Training Facility Pechiney Pechiney
Janitorial Each Each
Fencing-Common Shared Shared
Truck Scale Pechiney Pechiney
(Century to install own within 18 months)
Recreation Center Century Century
Shared Software As provided in Annex A
</TABLE>
<PAGE> 1
Exhibit 99.1
PECHINEY COMPLETES PURCHASE OF CENTURY'S FABRICATION BUSINESSES
Monterey, CA, September 21, 1999 - Pechiney, Century Aluminum Company
and Century Aluminum of West Virginia, Inc. (CAWV) have completed the
transaction for Pechiney to purchase Century's two aluminum fabrication
businesses. Completion of the acquisition follows the signing of a
definitive agreement on July 28 and the obtaining of standard governmental
and regulatory approvals.
The businesses, with revenues of $562 million in 1998, consist of:
-The Rolled Products unit of CAWV at Ravenswood, West Virginia that has
capacity to produce up to 600 million pounds (270,000 metric tons) of
rolled aluminum products a year on some of the largest rolling
equipment in the aluminum industry. The Ravenswood facility is a
leading North American supplier of premium sheet and plate products for
the aerospace and transportation markets. It is also a major North
American producer of brazing sheet used to manufacture radiators for
passenger cars and trucks.
-Century's Cast Plate unit at Vernon, California that has capacity to
produce 15 million pounds (7,000 metric tons) a year of cast aluminum
plate in the broadest range of sizes in the world. The unit is the
world's second largest producer of these products. Cast plate is used
principally in the machinery and equipment market.
PECHINEY
7, place du Chancelier Adenauer CENTURY
75218 Paris Cedex 16 2511 Garden Road
Suite 200 Building A
Contact: Monterey, CA 93940
Francois-Jose Bordonado
Tel. 33-6 08 10 05 72 Contact:
Catherine Paupelin A. T. Posti
Tel. 33-1 56 28 25 08 Tel. 831/642-9364
Fax 33-1 56 28 33 38 Fax 831-642-9328
e-mail: [email protected] e-mail: [email protected]
Internet: http://www.pechiney.com
