-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WL0tDHmTf5DZ5GTHA29f2WKYEZ6Vzd9/wfyLNTyCd4dQFI2wyTBk1/2mBI+AMzD8 6Ky5Z7dXq+ZPiTzkAwq+/A== 0000950123-01-500830.txt : 20010418 0000950123-01-500830.hdr.sgml : 20010418 ACCESSION NUMBER: 0000950123-01-500830 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20010402 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010417 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY ALUMINUM CO CENTRAL INDEX KEY: 0000949157 STANDARD INDUSTRIAL CLASSIFICATION: ROLLING DRAWING & EXTRUDING OF NONFERROUS METALS [3350] IRS NUMBER: 133070826 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-27918 FILM NUMBER: 1604680 BUSINESS ADDRESS: STREET 1: 2511 GARDEN ROAD STREET 2: BUILDING A SUITE 200 CITY: MONTEREY STATE: CA ZIP: 93940 BUSINESS PHONE: 3042736000 MAIL ADDRESS: STREET 1: 2511 GARDEN ROAD STREET 2: BUILDING A SUITE 200 CITY: MONTEREY STATE: CA ZIP: 93940 8-K 1 y47973e8-k.txt CENTURY ALUMINUM COMPANY 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): April 2, 2001 CENTURY ALUMINUM COMPANY (Exact name of registrant as specified in its charter) DELAWARE 0-27918 13-3070826 (State or other jurisdiction of (Commission File Number) (IRS Employer Incorporation) Identification No.) 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) 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS THE ACQUISITION --------------- On April 2, 2001, Century Aluminum Company, a Delaware corporation ("Century" or the "Company") completed the acquisition of NSA, Ltd. ("NSA") and its 237,000 metric ton per year aluminum reduction facility in Hawesville, Kentucky (the "Hawesville Facility") from Southwire Company ("Southwire"), a privately-held wire and cable manufacturing company based in Carrollton, Georgia (the "Acquisition"). Concurrently with the closing of the Acquisition, the Company effectively sold a 20% interest in the Hawesville Facility and related rights (the "Disposition") to Glencore AG ("Glencore"), the Company's largest shareholder. The Acquisition was completed pursuant to a Stock Purchase Agreement, dated August 31, 2000, between Century and Southwire (the "Southwire Agreement"). Under the terms of the Southwire Agreement, Century acquired all of the outstanding equity securities of Metalsco, Ltd., a Georgia corporation, which owns a direct 1% partnership interest in NSA and an indirect 99% partnership interest in NSA through its wholly-owned subsidiary, Skyliner, Inc. NSA is a Kentucky limited partnership which owns and operates the Hawesville Facility. The cash purchase price for the Acquisition was $454.1 million, subject to certain post-closing adjustments based on the amount by which NSA's working capital as of the closing date, as finally determined, exceeds or is less that than the amount estimated as working capital on the closing date. In addition, Century agreed to assume approximately $7.8 million in industrial revenue bonds (the "IRBs") related to the Hawesville Facility and may be required to pay up to an aggregate maximum of $7.0 million if the price of primary aluminum exceeds specified levels during the seven years following closing. The purchase price for the Acquisition was determined based on arms'-length negotiations between the Company and Southwire. Century financed a portion of the cash purchase price and related fees and expenses with the net proceeds from the sale of $325 million in aggregate principal amount of the Company's 11-3/4% Senior Secured First Mortgage Notes due 2008 (the "Notes") to certain institutional investors in an offering exempt from the registration requirements of the Securities Act of 1933, as amended. The Notes are guaranteed by certain of the Company's domestic subsidiaries and secured by a first-priority lien on certain property, plant and equipment held by those subsidiaries. Century financed the balance of the cash purchase price with approximately $32.0 million in available cash, $97.8 million in proceeds from the Disposition and $25 million in proceeds from the sale to Glencore of 500,000 shares of the Company's convertible preferred stock (the "Convertible Preferred Stock"). The Convertible Preferred Stock was sold to Glencore pursuant to the terms of a Convertible Preferred Stock Purchase Agreement, dated as of April 2, 2001, between Century and Glencore. Each share of the Convertible Preferred Stock has a liquidation preference of $50 and is convertible at any time into Century common stock at a price of $17.92 per share. -2- 3 THE DISPOSITION --------------- Concurrently with the closing of the Acquisition, Century sold a 20% ownership interest in the Hawesville Facility and related rights to Glencore pursuant to the terms of an Asset Purchase Agreement, dated April 2, 2001, between Century and Glencore (the "Glencore Agreement"). Under the terms of the Glencore Agreement, Glencore's 20% ownership interest in the Hawesville Facility consists of (i) title to the recently added fifth potline at the Hawesville Facility, (ii) a 20% undivided interest in all other assets of and rights relating to the Hawesville Facility, other than its four original potlines, and (iii) a 20% ownership interest in Century Aluminum of Kentucky LLC ("CAK"), a Delaware limited liability company which holds certain intangible assets relating to the operation of the Hawesville Facility (including the alumina and power supply contracts). Century retained an 80% interest in the Hawesville Facility which consists of (i) title to the original four potlines at the Hawesville Facility, (ii) an 80% undivided interest in all other assets of and rights relating to the Hawesville Facility, other than the fifth potline and (iii) an 80% interest in CAK. The cash purchase price paid by Glencore to Century for the Disposition was $97.8 million. Glencore also assumed direct responsibility for a pro rata portion of the IRBs and a pro rata portion of any post-closing payments Century may be obligated to make to Southwire pursuant to the Southwire Agreement. In addition, Glencore assumed responsibility for a pro rata portion of any liabilities and obligations with respect to the Hawesville Facility after closing and will share the benefit of the indemnities provided by Southwire pursuant to the Southwire Agreement. The purchase price and terms of the Disposition were determined through arms'-length negotiations between the parties. Century and Glencore entered into an Owners Agreement concurrently with the closing of the Disposition which, notwithstanding their separate ownership of specific assets at the Hawesville Facility, provides that each party is entitled to a pro rata portion of the aggregate production of the Hawesville Facility and is obligated to pay its pro rata portion of the expenses of the facility. The Hawesville Facility has been and following the Acquisition will continue to be used for the production of primary aluminum in molten, ingot and sow form. The facility has the capacity to produce up to 523 million pounds of primary aluminum per year and Century's 80% ownership interest represents 418 million pounds of this capacity. The foregoing summary is qualified in its entirety by reference: (a) with respect to the Acquisition, to the Southwire Agreement, a copy of which is attached hereto as Exhibit 2.1 and which is incorporated herein by this reference, (b) with respect to the Notes, to the Purchase Agreement, Indenture, Registration Rights Agreement, Mortgage, Deed of Trust and Pledge and Security Agreement, copies of which are attached hereto as Exhibits 4.1, 4.2, 4.3, 4.4, 4.5, and 4.6, respectively, and which are each incorporated herein by this reference, (c) with respect to the Convertible Preferred Stock, to the Convertible Preferred Stock Purchase Agreement, Certificate of Designation and Form of Convertible Preferred Stock Certificate, copies of which are attached hereto as Exhibits 4.7, 3.1, and 4.8, respectively, and which are each incorporated herein by this reference, and (d) with respect to the Disposition, to the Glencore Agreement, a copy of which is attached hereto as Exhibit 2.2 and which is incorporated herein by this reference. -3- 4 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements. Pursuant to Item 7(a)(4) of Form 8-K, the registrant will file the required financial statements and pro forma financial information by amendment within sixty days of the date of this filing. (b) Pro Forma Financial Information. Pursuant to Item 7(a)(4) of Form 8-K, the registrant will file the required financial statements and pro forma financial information by amendment within sixty days of the date of this filing. (c) Exhibits. The following exhibits are filed with this report on Form 8-K:
EXHIBIT NUMBER DESCRIPTION -------------- ----------- 2.1* Stock Purchase Agreement, dated August 31, 2000, between Century Aluminum Company and Southwire Company. 2.2* Asset Purchase Agreement, dated as of April 2, 2001, among Century Aluminum Company, Century Kentucky, Inc., NSA, Ltd. and Glencore AG. 3.1 Certificate of Designation of the Registrant, dated March 28, 2001. 4.1 Purchase Agreement, dated March 28, 2001, among Century Aluminum Company, Century Aluminum of West Virginia, Inc., Berkeley Aluminum, Inc., Century Kentucky, Inc. and Virgin Islands Alumina Corporation LLC and Credit Suisse First Boston Corporation and Fleet Securities, Inc., as Initial Purchasers. 4.2 Indenture, dated April 2, 2001, among Century, the Guarantors party thereto and Wilmington Trust Company, as trustee. 4.3 Registration Rights Agreement, dated April 2, 2001, among Century Aluminum Company, the Guarantors party thereto and Credit Suisse First Boston Corporation and Fleet Securities, Inc., as Initial Purchasers. 4.4 Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement, dated as of April 2, 2001, from NSA, Ltd. for the benefit of Wilmington Trust Company, as collateral agent. 4.5 Deed of Trust, Assignment of Leases and Rents, Security Agreement, Financing Statement and Fixture Filing, dated as of April 2, 2001, from Century Aluminum of West Virginia, Inc. for the benefit of Wilmington Trust Company, as collateral agent.
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4.6 Pledge and Security Agreement, dated as of April 2, 2001, by Century Aluminum Company as Pledgor and the other Pledgors party thereto in favor of Wilmington Trust Company, as collateral agent. 4.7 Convertible Preferred Stock Purchase Agreement, dated as of April 2, 2001, between Century Aluminum Company and Glencore AG. 4.8 Form of Convertible Preferred Stock Certificate. 99.1 Press Release, dated April 2, 2001. - ---------------------------------
* Schedules and exhibits are omitted and will be furnished to the Securities and Exchange Commission upon request. -5- 6 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: April 17, 2001 By: /s/ Gerald J. Kitchen ----------------- -------------------------------------- Name: Gerald J. Kitchen Title: Executive Vice President, General Counsel and Secretary -6- 7 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION -------------- ----------- 2.1* Stock Purchase Agreement, dated August 31, 2000, between Century Aluminum Company and Southwire Company. 2.2* Asset Purchase Agreement, dated as of April 2, 2001, among Century Aluminum Company, Century Kentucky, Inc., NSA, Ltd. and Glencore AG. 3.1 Certificate of Designation of Registrant relating to the Convertible Preferred Stock, dated March 28, 2001. 4.1 Purchase Agreement, dated March 28, 2001, among Century Aluminum Company, Century Aluminum of West Virginia, Inc., Berkeley Aluminum, Inc., Century Kentucky, Inc. and Virgin Islands Alumina Corporation LLC and Credit Suisse First Boston Corporation and Fleet Securities, Inc., as Initial Purchasers. 4.2 Indenture, dated April 2, 2001, among Century, the Guarantors party thereto and Wilmington Trust Company, as trustee. 4.3 Registration Rights Agreement, dated April 2, 2001, among Century Aluminum Company, the Guarantors party thereto and Credit Suisse First Boston Corporation and Fleet Securities, Inc., as Initial Purchasers. 4.4 Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement, dated as of April 2, 2001, from NSA, Ltd. for the benefit of Wilmington Trust Company, as collateral agent. 4.5 Deed of Trust, Assignment of Leases and Rents, Security Agreement, Financing Statement and Fixture Filing, dated as of April 2, 2001, from Century Aluminum of West Virginia, Inc. for the benefit of Wilmington Trust Company, as collateral agent. 4.6 Pledge and Security Agreement, dated as of April 2, 2001, by Century Aluminum Company as Pledgor and the other Pledgors party thereto in favor of Wilmington Trust Company, as collateral agent. 4.7 Convertible Preferred Stock Purchase Agreement, dated as of April 2, 2001, between Century Aluminum Company and Glencore AG. 4.8 Form of Convertible Preferred Stock Certificate. 99.1 Press Release, dated April 2, 2001. - ---------------------------------
* Schedules and exhibits are omitted and will be furnished to the Securities and Exchange Commission upon request. -7- EX-2.1 2 y47973ex2-1.txt STOCK PURCHASE AGREEMENT 1 Exhibit 2.1 STOCK PURCHASE AGREEMENT between CENTURY ALUMINUM COMPANY and SOUTHWIRE COMPANY DATED: August 31, 2000 2 TABLE OF CONTENTS
PAGE # 1 DEFINITIONS; GENERAL PROVISIONS..............................................................................2 1.1 Definitions...........................................................................................2 1.2 Other Defined Terms..................................................................................17 1.3 General Provisions; Incorporation of Background......................................................18 2 PURCHASE AND SALE OF STOCK; CLOSING; PURCHASE PRICE ADJUSTMENTS.............................................19 2.1 Purchase and Sale of Stock; Payment of Purchase Price................................................19 2.2 Closing..............................................................................................20 2.3 Closing Deliveries...................................................................................20 2.4 Pre-Closing Adjustment of Purchase Price.............................................................22 2.5 Post-Closing Adjustment of Purchase Price............................................................23 2.6 Contingent Consideration.............................................................................26 2.7 Assumption of Debt...................................................................................27 2A.1 Partial Redemption of Shares.........................................................................27 3 REPRESENTATIONS AND WARRANTIES OF SOUTHWIRE.................................................................28 3.1 Organization and Good Standing.......................................................................28 3.2 Capitalization.......................................................................................28 3.3 Authority; No Conflict...............................................................................30 3.4 Books and Records....................................................................................32 3.5 Financial Statements.................................................................................33 3.6 No Undisclosed Liabilities...........................................................................33 3.7 Operating Plans; Capital Budgets; Projections........................................................34 3.8 Sales and Purchase Order Backlog.....................................................................35 3.9 Accounts Receivable..................................................................................35 3.10 Inventories..........................................................................................36 3.11 Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions....................36 3.12 Real Estate Matters..................................................................................40 3.13 Assets...............................................................................................41 3.14 The Business.........................................................................................45 3.15 Customers............................................................................................45 3.16 Product Warranties...................................................................................45 3.17 Tax Matters..........................................................................................45 3.18 Employee Benefits....................................................................................48 3.19 Compliance With Laws; Permits........................................................................49 3.20 Legal Actions; Orders; Workers' Compensation Claims..................................................50 3.21 Material Contracts...................................................................................51 3.22 Intellectual Property................................................................................54
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3.23 Insurance............................................................................................57 3.24 Environmental Matters................................................................................58 3.25 Employees............................................................................................61 3.26 Accounts, Lockboxes, Safe Deposit Boxes; Powers of Attorney..........................................62 3.27 Brokers or Finders...................................................................................63 3.28 Representations and Warranties.......................................................................63 3.29 Year 2000 Compliance.................................................................................63 3.30 No Material Adverse Change...........................................................................63 4 REPRESENTATIONS AND WARRANTIES OF PURCHASER.................................................................64 4.1 Organization and Good Standing.......................................................................64 4.2 Authority; No Conflict...............................................................................64 4.3 Certain Actions......................................................................................65 4.4 Brokers or Finders...................................................................................65 4.5 Undisclosed Principals or Agencies...................................................................65 4.6 Investment Representation............................................................................65 5 COVENANTS OF SOUTHWIRE......................................................................................66 5.1 Access...............................................................................................66 5.2 Notice of Developments...............................................................................67 5.3 Purchase of Uncollected Receivables..................................................................67 5.4 Financial Statements and Comfort Letter..............................................................67 5.5 Operation of the Business............................................................................68 5.6 Negative Covenants...................................................................................69 5.7 No Negotiation.......................................................................................70 5.8 Labor Matters........................................................................................70 5.9 Regulatory and Other Authorizations; Notices and Consents............................................70 5.10 Non-Solicitation.....................................................................................71 5.11 Unwanted Property....................................................................................72 5.12 Consent Order........................................................................................72 5.13 Supplementation and Correction of Information........................................................72 5.14 Transfer of Assets; Capital Expenditures.............................................................73 6 COVENANTS OF PURCHASER......................................................................................74 6.1 Regulatory and Other Authorizations; Notices and Consents............................................74 6.2 Labor Negotiations...................................................................................74 6.3 Certain Tax Matters..................................................................................75 6.4 Environmental Cooperation and Access.................................................................84 6.5 Non-Solicitation.....................................................................................85 6.6 Financing............................................................................................85 6.7 Post-Closing Actions.................................................................................85 6.8 Power Agreements.....................................................................................86 6.9 Notice of Developments...............................................................................86 6.10 Collection of Receivables............................................................................86 7 EMPLOYEE MATTERS............................................................................................86 7.1 Employees............................................................................................86
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7.2 Employee Benefit Plans...............................................................................88 7.3 Medical Coverage.....................................................................................88 8 CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE.....................................................89 8.1 Accuracy of Representations..........................................................................89 8.2 Seller's Performance.................................................................................89 8.3 Clear Title to Shares................................................................................90 8.4 Consents.............................................................................................90 8.5 Financing............................................................................................90 8.6 No Actions...........................................................................................90 8.7 Collective Bargaining Agreement; Labor Matters.......................................................91 8.8 No Material Adverse Change...........................................................................91 8.9 HSR Act..............................................................................................91 8.10 Survey...............................................................................................91 8.11 Easements............................................................................................92 8.12 Environmental Permits................................................................................92 8.13 Liens................................................................................................92 9 CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE........................................................92 9.1 Accuracy of Representations..........................................................................93 9.2 Purchaser's Performance..............................................................................93 9.3 Assumption of Power Contract.........................................................................93 9.4 No Actions...........................................................................................93 9.5 HSR Act..............................................................................................93 9.6 Labor................................................................................................94 9.7 Easements............................................................................................94 10 TERMINATION.................................................................................................94 10.1 Termination Events...................................................................................94 10.2 Effect of Termination................................................................................95 11 INDEMNIFICATION.............................................................................................95 11.1 Survival of Representations and Warranties; Claims...................................................95 11.2 Indemnification by Seller............................................................................96 11.3 Indemnification by Purchaser.........................................................................99 11.4 Allocation of Certain Losses........................................................................100 11.5 Certain Limitations.................................................................................101 11.6 Notification of Claims..............................................................................102 11.7 Indemnification Agreements..........................................................................103 11.8 Limitations.........................................................................................103 11.9 Exclusive Remedies; Materiality.....................................................................103 11.10 Satisfaction of Indemnification Obligations.........................................................104 11.11 Indemnity Support...................................................................................104 12 GENERAL PROVISIONS.........................................................................................108 12.1 Expenses............................................................................................108 12.2 Public Announcements................................................................................108
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12.3 Confidentiality.....................................................................................108 12.4 Notices.............................................................................................109 12.5 Governing Law; Jurisdiction; Service of Process.....................................................110 12.6 Further Assurances..................................................................................110 12.7 Waiver..............................................................................................110 12.8 Entire Agreement and Modification...................................................................111 12.9 Assignments, Successors, and No Third-Party Rights..................................................111 12.10 Severability........................................................................................111 12.11 Section Headings, Construction......................................................................112 12.12 Time of Essence.....................................................................................112 12.13 Counterparts........................................................................................112 12.14 Records Retention...................................................................................112
-iv- 6 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made this 31st day of August, 2000, by and between CENTURY ALUMINUM COMPANY, a Delaware corporation ("Purchaser"), and SOUTHWIRE COMPANY, a Delaware corporation ("Southwire" or "Seller"). BACKGROUND A. Metalsco Ltd. ("Metalsco"), a Georgia corporation, is a wholly-owned subsidiary of Southwire. B. Skyliner, Inc. ("Skyliner"), a Delaware corporation, is a wholly-owned subsidiary of Metalsco. C. NSA, Ltd. ("NSA") is a limited partnership, whose only partners are Metalsco and Skyliner. D. Through NSA, together with certain properties and assets owned by Southwire, Southwire conducts the Business (as defined herein). E. Purchaser desires to purchase, either directly or through an entity established for the purpose, from Seller, and Seller desires to sell to Purchaser, the Business, and to such purpose, Purchaser shall acquire from Seller on the Closing Date all of the then authorized, issued and outstanding capital stock of Metalsco (the "Shares") and certain properties and assets necessary for the operation of the Business, and Seller shall assign to Purchaser and Purchaser shall assume certain liabilities related to the operation of the Business, all as more fully described herein, upon the terms and subject to the conditions set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the premises and of the mutual covenants, agreements, representations, and warranties herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, each intending to be legally bound, agree as follows: 7 1. DEFINITIONS; GENERAL PROVISIONS 1.1 Definitions. For purposes of this Agreement and the Exhibits and Schedules attached hereto, the following terms shall have the meanings specified or referred to below, unless the context otherwise requires: "Action" means any claim, action, suit, audit, arbitration, inquiry, proceeding or investigation (whether civil, criminal, administrative, investigative or informal) by or before or otherwise involving any Governmental Body or arbitrator(s). "Additional Assets" means the assets identified on Schedule 1.1(a) attached hereto. "Adjusted Working Capital" means the excess of the current assets over the current liabilities (in each case as set forth on Schedule 1.1(b)) shown on any specified balance sheet of NSA prepared on a basis consistent with the preparation of the Reference Balance Sheet; provided, however, (a) current assets used in determining such Adjusted Working Capital shall not include (i) any amounts receivable by NSA from Seller or any of its Affiliates under intercompany accounts except for accounts receivable for aluminum delivered to Seller by NSA from the Plant that on the date of the balance sheet are within the payment terms provided for in the Aluminum Supply Agreement, (ii) insurance premiums with respect to policies identified on Schedule 3.23(a) for periods post-Closing, to the extent pre-paid as of the date of the balance sheet, (iii) any reserve for doubtful or uncollectible accounts receivable, (iv) unrealized gains on hedging transactions, or (v) any deferred Tax assets, and (b) current liabilities used in determining Adjusted Working Capital shall not include (i) any portion of the Assumed Indebtedness, (ii) any reserves or accruals for Environmental Matters, whether known or unknown, fixed or contingent, (iii) any accruals or reserves for deferred Taxes, (iv) any liability related to federal, state or local income taxes, (v) the Southwire Employment Liabilities, (vi) any reserves or accruals for contributions to the Southwire 401(k) Plan for any Employee with respect to the fiscal year ending December 31, 2000, or any portion thereof or any period prior thereto or for obligations payable to Hired Employees following the Closing, other than amounts accrued for management performance bonuses, salaried Christmas pay, holiday pay, vacation time and normal accrued wages for the year ending December 31, 2000 to the extent -2- 8 such bonuses and liabilities shall have accrued as of the Effective Time, or (vii) unrealized losses on hedging transactions. "Affiliate" has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Exchange Act. "Alcoa" means Alcoa, Inc. "Alumina Supply Agreement" means the Alumina Purchase Agreement, dated as of December 18, 1997, between Kaiser and Southwire, as amended by Amendment Number 1, dated October 26, 1999, pursuant to which Kaiser has agreed to provide to Southwire its requirements for alumina at the Plant. "Aluminum Fluoride Supply Agreement" means the purchase order agreement dated August 18, 1997 between Alcoa and NSA, pursuant to which Alcoa has agreed to supply aluminum fluoride to NSA. "Aluminum Supply Agreement" means the Aluminum Supply Agreement to be entered into between Purchaser and Southwire on and as of the Closing Date, in the form attached hereto as Exhibit A. "Assumed Indebtedness" means the obligations of NSA and Southwire with respect to the $7,815,000 Hancock County, Kentucky Solid Waste Disposal Facilities Revenue Bonds (NSA, Ltd. Project), Series 1998, to be assumed by Purchaser pursuant to Section 2.7. "Assumed Liabilities" means the liabilities of the Business identified on Schedule 1.1(c) attached hereto. "Business" means the business of converting alumina into primary aluminum at the Plant and the sale of such primary aluminum, as conducted by Southwire and its Affiliates. -3- 9 "Business Day" means any day that is not a Saturday, a Sunday or other day on which banks are authorized or required by Legal Requirement to be closed for business in the City of New York. "Closed Potliner Disposal Areas" means the areas previously used by Seller and its Affiliates for the disposal of spent potliners from the Plant, including, without limitation, the spent potliner disposal area, the south slurry pond and the east slurry disposal area identified on Schedule 1.1(d). "Closing" means the consummation of the Contemplated Transactions. "Closing Balance Sheet" means the balance sheet of NSA as of the Closing Date, to be prepared pursuant to Section 2.5(a). "Closing Date" means the date and time as of which the Closing actually takes place. "Code" means the Internal Revenue Code of 1986, as amended, or any successor law, and any regulations promulgated by the Internal Revenue Service pursuant to that code or any successor law. "Coke Supply Agreement" means the Calcined Petroleum Coke Supply Contract dated February 26, 1999, between Reynolds and NSA Incorporated pursuant to which Reynolds has agreed to provide to NSA Incorporated calcined petroleum coke. "Consent" means any approval, consent, ratification, waiver, or other authorization or release (including any Governmental Authorization). "Contemplated Transactions" means, collectively, all of the transactions contemplated by this Agreement and each of the Related Agreements. "Contract" means any agreement or contract (whether written or oral), including without limitation any insurance policy, that is legally binding. -4- 10 "Current Groundwater Recovery and Treatment System" has the meaning given to that term in the Environmental Access and Cooperation Agreement. "Electric Service Participation Agreement" means the Electric Service Participation Agreement to be entered into on or before the Closing Date by and between Southwire and Purchaser, in the form attached hereto as Exhibit B. "Employee Benefit Plan" means each pension, retirement, profit-sharing, deferred compensation, stock option, employee stock ownership, severance pay, vacation, bonus or other incentive plan, any other employee program, arrangement or agreement, whether arrived at through collective bargaining or otherwise, any medical, vision, dental or other health plan, any life insurance plan or fringe benefit plan that Southwire or any of its Affiliates has or had any obligation to contribute to or has maintained or sponsored for the benefit of any employees, retirees, dependents, spouses, directors, independent contractors or other beneficiaries of the Business. "Employees" means all employees of Southwire, Metalsco or NSA who are employed in the Business as of the Closing Date, including, without limitation, those on layoff, paid or unpaid leaves, but excluding the executive officers who are statutory employees of those entities and are listed on Schedule 1.1(e). "Encumbrance" means any mortgage, security interest, pledge, hypothecation, assignment, attachment, deposit arrangement, encumbrance, lien (statutory, judgment or otherwise), charge (whether fixed or floating), preference, priority, exception, reservation, restriction, covenant, right of way, easement, lease, agreement or other security agreement or preferential arrangement of any kind or nature whatsoever (including any similar such interest arising under the laws of any applicable domestic or foreign jurisdiction and including any conditional sale or other title retention agreement, any financing lease involving substantially the same economic effect as any of the foregoing and the filing of any financing statement under the UCC or comparable law of any domestic or foreign jurisdiction). -5- 11 "Environmental Access and Cooperation Agreement" shall mean the Environmental Access and Cooperation Agreement to be entered into on or before the Closing Date by and between Southwire and Purchaser, in the form attached hereto as Exhibit C. "Environmental Claim" means any Action based upon or arising out of an alleged violation of Environmental Law. "Environmental, Health and Safety Liabilities" means, collectively, any Liabilities arising from or under any Environmental Law or Occupational Safety and Health Law. "Environmental Law" means any Legal Requirement or Order relating to the regulation or protection of human health, safety or the environment or to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or wastes into the environment (including, without limitation, ambient air, soil, surface water, ground water, wetlands, land or subsurface strata), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, chemicals or industrial, toxic or Hazardous Material or wastes, but does not include any Legal Requirement or Order relating primarily to worker or workplace safety. "Environmental Matter" means any matter or circumstance related in any manner whatsoever to (i) the emission, discharge, disposal, release or threatened release of any Hazardous Material into the environment, or (ii) the treatment, storage or other handling of any Hazardous Material, or (iii) the placement of structures or materials into waters of the United States, or (iv) the presence of any Hazardous Material, including, but not limited to, polychlorinated biphenyls ("PCBs"), in any building, structure or workplace or on any real property, or (v) any actual or alleged breach of an Environmental Law. "Environmental Permit" means any Permit required to be granted to a Person in order for such Person to be in compliance with Environmental Law. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. -6- 12 "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Financial Statements" means, collectively, (i) the audited balance sheets as of, and related audited statements of income and cash flow for the fiscal years ended, December 31, 1997, December 31, 1998, and December 31, 1999, of NSA (including the Reference Balance Sheet), copies of which have been previously provided to Purchaser, (ii) the unaudited balance sheet as of, and related statements of income and cash flow for, the six-month period ended June 30, 2000, of NSA, copies of which have been previously provided to Purchaser, and (iii) the Closing Balance Sheet. "GAAP" means, at any particular time, generally accepted accounting principles as in effect in the United States at such time, consistently applied with prior periods and with past practices of the Business; provided, however, that, if it were permissible to use more than one principle at the relevant time in respect of a particular accounting matter, "GAAP" shall refer to the principle which was then employed by NSA. "Governmental Authorization" means any Consent, license or Permit issued, granted or given by or under the authority of any Governmental Body or pursuant to any Legal Requirement. "Governmental Body" means any federal, state, local, municipal, foreign or other governmental or quasi-governmental entity or authority of any nature, including without limitation any court or other tribunal. "GREC" means Green River Electric Corporation, the predecessor of Kenergy. "Hazardous Material" means (i) any petroleum or petroleum products, flammable explosives, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation and transformers or other equipment that contain dielectric fluid containing levels of PCBs, (ii) any chemicals or other materials or substances which are defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants" or words of similar import under any Environmental Law, -7- 13 and (iii) any other chemical or other material or substance, exposure to which is prohibited, limited or regulated by any Governmental Body under any Environmental Law. "Hired Employees" means the Hired Salaried Employees and the hourly Employees hired by Purchaser pursuant to the offers of employment made in accordance with Section 7.1(a). "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or any successor law, and regulations and rules promulgated pursuant to that act or any successor law. "Indebtedness Assumption Agreement" shall mean the assignment and assumption agreement to be entered into on and as of the Closing Date by and between Southwire and Purchaser or an Affiliate of Purchaser pursuant to Section 2.7 hereof. "Intellectual Property" means (i) 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, (ii) 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, (iii) national (including the 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, (iv) 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, (v) copyrightable works, copyrights (registered or otherwise) and registrations and applications for registration thereof, and all rights therein provided by multinational treaties or conventions, (vi) computer software, including, without limitation, source code, operating systems and -8- 14 specifications, data, data bases, files, displays, documentation and other materials related thereto, data and documentation, (vii) 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), (viii) technology (including know-how and show-how), manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, (ix) copies and tangible embodiments of all the foregoing, in whatever form or medium, (x) all rights to obtain and rights to apply for patents, and to register trademarks and copyrights, and (xi) 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 NSA in respect of the Business on the Closing Date and any prepaid deposits for any of the same. "Kaiser" means Kaiser Aluminum & Chemical Corporation. "Kenergy" means Kenergy, the successor to GREC. "Knowledge" or "Known" means those facts which are known, or would be known upon reasonable inquiry in the ordinary course of business, (i) with respect to Southwire, Metalsco, Skyliner, NSA or the Business, by any officer of Southwire or any employee designated as a "director" or "manager" of Southwire, Metalsco, Skyliner or NSA, and (ii) with respect to NSA or the Business, by the Plant Manager, any Manager, Controller or Reduction General Supervisor, or any other Person acting in a managerial capacity who reports directly to the Plant Manager, as identified on Schedule 1.1(f), or any of the following named individuals: Mr. Roy Long, Mr. John Stephens and Mr. Stanley Tate. With respect to any other Person, "Knowledge" or "Known" means those facts which are known, or would be known upon reasonable inquiry in the ordinary course of business, by such Person or any officer, manager or other Person acting in a supervisory capacity with respect to the relevant matter. With respect to -9- 15 Tax matters, "Knowledge" also shall mean those facts which are known, or would be known upon reasonable inquiry in the ordinary course of business, by employees or agents of the relevant Person responsible for Tax matters. "LEC" means LG&E Energy Corp. "LEM" means LG&E Energy Marketing Inc. "Leased Personal Property" means, collectively, all personal property described on Schedule 1.1(g) attached hereto with respect to which a Lease is in effect under which annual rental payments of Ten Thousand Dollars ($10,000) or more are made. "Leases" means, collectively, Seller's leasehold interests in Leased Personal Property used in the Business. "Legal Requirement" means any United States federal, state, local or foreign law, statute, ordinance, principle of common law, rule, regulation, code, order or other requirement of a Governmental Body. "Liabilities" means any and all debts, obligations and liabilities, whether accrued or fixed, absolute or contingent, matured or unmatured, known or unknown, or determined or determinable, including without limitation those arising under any Legal Requirement (including without limitation any Environmental, Health and Safety Liabilities), Action, Order, contract, agreement, arrangement, commitment or undertaking. "Licensed Intellectual Property" means all Intellectual Property licensed or sublicensed from a third party by Seller and used in the Business; provided, however, Licensed Intellectual Property shall not include any generally available non-customized software licensed by Southwire for use by Southwire and its subsidiaries (including but not limited to Microsoft Outlook, Excel and other similar operating systems). "Master Assignment Agreement" means the Master Assignment Agreement to be entered into on or before the Closing Date by and between Southwire and Purchaser, and consented to by Kenergy, in the form attached hereto as Exhibit D. -10- 16 "Material Adverse Effect" means an event, circumstance, development, change or occurrence (other than general economic conditions or conditions occurring or prevailing in the aluminum reduction industry generally) which, individually or together with any other event, circumstance, development, change or occurrence, has or reasonably could be expected to have a material and adverse impact on (i) the business, operations, properties, financial position or results of operation of the Business, taken as a whole, or (ii) the ability of Purchaser to operate or conduct the Business in the manner in which it is currently operated or conducted. "NLRA" shall mean the National Labor Relations Act, 29 U.S.C.Section 151 et seq. "NLRB" means the National Labor Relations Board. "NLRB Litigation" means the ongoing unfair labor practices litigation brought by the Union and the NLRB against Southwire before the NLRB and the related Section 10(j) proceedings under the NLRA, including any and all amendments (regardless of when made) to the ULP Complaint and charges, and any additional labor litigation that may arise at any time in connection with pre-Closing actions of Seller. "Natural Gas Supply Agreement" means the Gas Sales Contract, dated April 1, 1999 between Southwire/NSA and SIGCORP, as amended to date. "Natural Gas Transportation Agreement" means the Large Volume Natural Gas Service Agreement, dated December 20, 1990, between Southwire and Western Kentucky, as amended to date. "Occupational Safety and Health Law" means any Legal Requirement requiring or intended to promote safe and healthful working conditions, or otherwise existing for the purpose of reducing occupational safety and health hazards other than any Environmental Law. -11- 17 "Order" means any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Body. "Owned Intellectual Property" means all Intellectual Property in and to which Seller, Metalsco, Skyliner or NSA holds, or has a right to hold, right, title and interest and which is used in the Business, except for that Intellectual Property set forth in Item 1 of Schedule 3.13(d). "Partnership Agreement" means the Agreement of Limited Partnership of NSA II, Ltd., dated as of December 31, 1997, between Metalsco and Alumina, Inc. (the predecessor of Skyliner) pursuant to which Metalsco and Alumina, Inc., as partners, formed NSA (formerly known as NSA II, Ltd.). "Permit" means any federal, state, local, or foreign governmental approval, authorization, certificate, easement, filing, franchise, license, notice, permit, waiver, or right of any kind granted to any Person or to which any Person is a party or that is or may be binding upon or inure to the benefit of any Person or any of its properties or assets or its business. "Permitted Encumbrances" means, collectively, the Encumbrances set forth on Schedule 1.1(h) attached hereto together with such other minor imperfections in title as will not individually or in the aggregate materially and adversely affect the use, marketability or value of the property to which such imperfection in title relates. "Person" means any individual, corporation, general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity or Governmental Body, as well as any syndicate, group or the like that would be deemed to be a person under Section 13(d)(3) of the Exchange Act. "Pitch Supply Agreement" means the Sales Agreement dated October 1, 1997, between Reilly and NSA, Inc., pursuant to which Reilly has agreed to provide to NSA, Inc. its requirements for coal tar pitch. -12- 18 "Plant" means the aluminum smelter and ancillary facilities located in Hawesville, Kentucky. "Power Contract" means, collectively, the Agreement for Electric Service between Kenergy (formerly GREC) and Southwire, and Amendment No. 1 thereto, each dated July 15, 1998 and all agreements related to the provision of electrical power thereunder to the Plant entered into by or among the Power Suppliers and Southwire or its Affiliates. "Power Supply Agreements" shall mean, collectively, the (a) Master Assignment Agreement, (b) Electric Service Participation Agreement and (c) the Special Assignment Agreement. "Power Suppliers" shall mean, collectively, Kenergy (formerly GREC), LEC and LEM. "Property" means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible. "Purchaser" means Century or any Affiliate of Century established by Century for the purpose of acquiring the Business and to which Century shall assign its rights hereunder. "Purchaser's Accountants" means Deloitte & Touche, L.L.P., independent accountants of Purchaser. "Real Property" means, collectively, the real estate described on Schedule 1.1(i) attached hereto together with all rights, title and interests in and to all buildings and improvements erected thereon and all fixtures and appliances installed in, attached to, or situated in or upon, such real estate and any and all appurtenances relating to such real estate subject to the Permitted Encumbrances; provided, however, Real Property shall not include the Closed Potliner Disposal Areas. "Receivables" means any and all accounts receivable, notes and other amounts receivable arising from the conduct of the Business on or before the Closing Date, -13- 19 whether or not in the ordinary course, together with any unpaid financing charges accrued thereon. "Record of Decision" means the Final Record of Decision issued by the United States Environmental Protection Agency, dated July 2000, and any future modifications thereof, addressing the National Southwire Aluminum NPL Site, Hawesville, Hancock County, Kentucky. "Reference Balance Sheet" means the audited balance sheet of NSA as of December 31, 1999. "Regulations" means the Treasury Regulations (including Temporary Regulations) promulgated by the Department of Treasury with respect to the Code or other federal tax statutes. "Reilly" means Reilly Industries, Inc. "Related Agreements" means, collectively, the Indebtedness Assumption Agreement, the Aluminum Supply Agreement, the Environmental Access and Cooperation Agreement, the Power Supply Agreements, the Shared Services Agreement and other agreements that will provide for the joint use of utilities and other facilities, each of which is a "Related Agreement." "Release" means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, including, without limitation, the movement of Hazardous Materials through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata. "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 -14- 20 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. "Representative" means, with respect to a particular Person, any director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel, accountants and financial advisors. "Reynolds" means Reynolds Metal Company. "Seller's Accountants" means Ernst & Young LLP, independent accountants of Seller. "Shared Services Agreement" means the Shared Services Agreement to be entered into between Purchaser and Southwire on and as of the Closing Date, in the form attached hereto as Exhibit E. "Shares" has the meaning set forth in paragraph E of the Background hereof. "SIGCORP" means SIGCORP Energy Services, LLC. "Southwire Employment Liabilities" means the salaries and wages (including all withholdings required by federal, state or local law with respect thereto) and other amounts payable to Employees by Southwire as provided in Section 7.1(c). "Special Assignment Agreement" means the Special Assignment Agreement to be entered into on or before the Closing Date by and among Southwire, Purchaser and LEM, in the form attached hereto as Exhibit F, to assign to Purchaser the rights of Seller under (i) the Assurances Agreement between Seller and LEM, dated July 17, 1998, as amended to date and (ii) the Load Management Agreement between Seller and LEM dated July 15, 1998, as amended to date. "Strike" means the work stoppage initiated by the Union against Southwire on or about June 26, 1998. -15- 21 "Suppliers" means, collectively, Alcoa, Kaiser, Reilly, Reynolds, SIGCORP and Western Kentucky. "Supply Agreements" means, collectively, the Alumina Supply Agreement, Aluminum Fluoride Supply Agreement, Coke Supply Agreement, Natural Gas Supply Agreement, Natural Gas Transportation Agreement and Pitch Supply Agreement. "Tax" or "Taxes" means any fee, tax, levy, assessment, tariff or duty imposed, assessed or collected by or under the authority of any Governmental Body and all interest and penalties with respect thereto. "Tax Return" means any return, report, form or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection or payment of any Tax. "Threatened": an Action, dispute or other matter will be deemed to have been "Threatened" with respect to any Person if such Person has received any written demand or statement, or other written notice from any source, with respect to such Action, dispute or other matter. "Trustee" means The Bank of New York, in its capacity as trustee under the Trust Indenture, dated as of June 1, 1998, by and between Hancock County, Kentucky and the Trustee relating to the Assumed Indebtedness. "ULP Complaint" means the complaint alleging unfair labor practices filed by the Union and the NLRB against Southwire in the NLRB Litigation. "Union" means the United Steelworkers of America, and includes the International and Local chapter. "Unwanted Property" means all Property owned or held at any time on or prior to the Closing Date by, and any Liabilities of, Metalsco, Skyliner, NSA or any subsidiary of any of them or any predecessor of any of the foregoing, other than (i) the Assets, (ii) the -16- 22 Liabilities of the Business reflected in the Closing Balance Sheet, and (iii) the Assumed Liabilities and any other Liabilities of the Business expressly assumed hereunder. "WARN Act" means the Worker Adjustment and Retraining Notification Act, 29 U.S.C.Section 2101 et seq. "Western Kentucky" means Western Kentucky Gas Company. 1.2 Other Defined Terms. The following terms have the meanings defined for such terms in the Sections set forth below:
Term Section - ---- ------- Accounting Firm 6.3(a) Agreed Estimated Net Working Capital 2.4(a) Assets 3.13 Closing Payment 2.1(a) Companies 3.17 Company Affiliated Group 3.17 Contingent Consideration 2.6 Contingent Consideration Pay Period 2.6 Contingent Consideration Rate 2.6 Default Estimated Net Working Capital 2.4(a) ERISA Affiliate 3.18(b) Effective Time 7.1(c) Forte 2A.1 Hired Salaried Employees 7.1(b) Indemnified Party 11.5 Indemnifying Party 11.5 Indemnity Support 11.11 Indemnity Support Issuer 11.11 Independent Accounting Firm 2.5(b)(ii) Loss 11.2(a)
-17- 23
Term - ----- Section -------- Material Contracts 3.21 Maximum Amount 11.5(a) Metalsco Background Note 2A.1 NSA Background Pre-Closing Period 2A.1 Purchase Price 2.1(b) Purchaser Affiliated Group 6.3(d) Purchaser Indemnified Party 11.2 Purchaser's Defined Contribution Plan 7.2 Redeemed Shares 2A.1 Section 11.4 Loss 11.4 Seller Indemnified Party 11.3 Seller's Consolidated Net Worth 11.11(b) Seller's Estimated Net Working Capital 2.4(a) Settlement Quotation 2.6(a) Skyliner Background Southwire 401(k) Plan 7.2 Term 11.11(d)(i) Third Party Claims 11.5 Threshold Amount 11.5 Written Demand 6.3(b)
1.3 General Provisions; Incorporation of Background. (a) Unless expressly provided otherwise in this Agreement, or the Related Agreements, or unless the context requires otherwise: (i) all capitalized terms used in the Related Agreements that are defined in this Agreement shall have the respective meanings assigned to them herein; -18- 24 (ii) all accounting terms used in this Agreement and in the Related Agreements shall have the meanings given to them in accordance with GAAP; (iii) the singular shall include the plural, the plural shall include the singular, and the use of any gender shall include all genders; and all references to any particular party defined herein shall be deemed to refer to each and every Person defined herein as such party individually, and to all of them, collectively, jointly and severally, as though each were named wherever the applicable defined term is used; (iv) unless otherwise identified, all references to "Sections" shall be deemed to refer to the provisions of this Agreement; (v) unless otherwise explicitly stated, all references to time herein shall mean Eastern Standard Time or Eastern Daylight Time, as then in effect; and (vi) all references to sections, subsections, paragraphs or other provisions of any Legal Requirement shall be deemed to include successor, amended, renumbered or replacement provisions, if any, thereof. (b) The Background provisions set forth above are hereby incorporated by reference into this Agreement and made a part hereof as if set forth in their entirety in this Section 1.3(b). 2. PURCHASE AND SALE OF STOCK; CLOSING; PURCHASE PRICE ADJUSTMENTS 2.1 Purchase and Sale of Stock; Payment of Purchase Price. (a) On the terms and subject to the conditions set forth in this Agreement, at the Closing, upon payment of Four Hundred Sixty Million Dollars ($460,000,000), subject to the adjustments set forth in Section 2.4 (the "Closing Payment"), by the initiation of wire transfer of immediately available funds to an account specified in writing by Southwire, (i) Purchaser or an Affiliate of Purchaser designated by Purchaser will purchase and accept from Seller, and Seller will sell, transfer, convey and deliver to Purchaser or such Affiliate of Purchaser all of the Shares, (ii) Purchaser or an Affiliate of Purchaser designated by -19- 25 Purchaser, will purchase and accept from Seller, and Seller will sell, assign, transfer, convey and deliver to Purchaser or such Affiliate of Purchaser, all of the Additional Assets, and (iii) Seller shall transfer and assign to Purchaser or such Affiliate of Purchaser, and Purchaser or such Affiliate of Purchaser shall assume, the Assumed Liabilities and the Assumed Indebtedness. (b) The total purchase price (the "Purchase Price") for the acquisition of the Shares and the Additional Assets from Southwire shall be equal to the Closing Payment, plus or minus the amount of any adjustments pursuant to Section 2.5, plus the assumption of the Assumed Liabilities and the Assumed Indebtedness. At the Closing, Purchaser shall pay the Closing Payment. 2.2 Closing. The Closing will take place at the offices of Curtis, Mallet-Prevost, Colt & Mosle LLP in New York City at 10:00 A.M. on a date which is within five (5) Business Days of the date on which all of the conditions set forth in Sections 8 and 9 hereof are satisfied, provided that such date shall be (i) no earlier than October 15, 2000 and (ii) no later than the later of (x) ninety (90) days after the date hereof and (y) ten (10) Business Days following the date of receipt of final HSR Act approval in the event of any extensions required to comply with issues arising under the HSR Act, or at such other time and place as the parties may mutually agree. 2.3 Closing Deliveries. At the Closing: (a) Seller will deliver, or cause to be delivered, to Purchaser: (i) stock certificates evidencing the Shares duly endorsed in blank, or accompanied by stock powers duly executed in blank, in form satisfactory to the Purchaser and with all required stock transfer tax stamps affixed; (ii) a bill of sale, in form and substance reasonably satisfactory to Purchaser, of the transfer by Seller to NSA of the tangible personal property constituting the Additional Assets to be so transferred as provided in Section 5.14; (iii) a closing certificate executed by Southwire substantially in the form attached hereto as Exhibit G; -20- 26 (iv) each of the Related Agreements, duly executed by Southwire and each other party (other than Purchaser or Purchaser's Affiliates) thereto; (v) consents of (A) each Supplier, whose consent is required for the assignment to Purchaser or an Affiliate of Purchaser designated by Purchaser by Southwire or the Affiliate of Southwire which is a party to the relevant Supply Agreement of all of its rights and, effective from and after the Closing, its obligations under the Supply Agreement to which the Supplier is a party, and (B) the Trustee, to the assumption by Purchaser or an Affiliate of Purchaser of the obligations of [Southwire] under the Assumed Indebtedness; each such consent to be in form and substance satisfactory to Purchaser in its reasonable discretion; (vi) a receipt for the Closing Payment; (vii) the Indemnity Support; (viii) all other certificates, instruments and documents to be delivered by Southwire pursuant to this Agreement or any of the Related Agreements; (ix) all books and records of Metalsco, Skyliner and NSA, including without limitation all minute books, stock registers and corporate records of Metalsco and Skyliner and all minute books and partnership records of NSA; (x) a special warranty deed conveying to NSA the Real Property as contemplated by Section 5.14(a); (xi) certified copies of the instruments of transfer referred to in the last sentence of Section 2A.1; and (xii) an assignment agreement in form and substance reasonably satisfactory to Purchaser. (b) Purchaser will deliver, or cause to be delivered, to Southwire: -21- 27 (i) The Closing Payment payable in the manner described in Section 2.1; (ii) an assignment and assumption agreement in form and substance reasonably satisfactory to Seller; (iii) a certificate executed by Purchaser substantially in the form attached hereto as Exhibit H; (iv) each of the Related Agreements, duly executed by Purchaser; and (v) all other certificates, instruments and documents to be delivered by Purchaser to Seller pursuant to this Agreement or any of the Related Agreements, including without limitation all documents necessary for Purchaser's assumption of the Assumed Indebtedness. 2.4 Pre-Closing Adjustment of Purchase Price. (a) On or around the tenth Business Day preceding the Closing Date, Seller shall in good faith estimate the Adjusted Working Capital as of the last calendar day of the immediately preceding calendar month (the "Seller's Estimated Adjusted Working Capital") and deliver to Purchaser in accordance with Section 12.4 a notice specifying Seller's Estimated Adjusted Working Capital and the basis, in reasonable detail, for such calculation. Purchaser shall have seven (7) Business Days to review Seller's Estimated Adjusted Working Capital during which time Seller shall in good faith assist Purchaser in such review. After such seven Business Day review period shall have terminated, either (i) the parties shall have, acting in good faith, mutually agreed on an estimate of the Adjusted Working Capital as of the last calendar day of such immediately preceding month (the "Agreed Estimated Adjusted Working Capital") or (ii) Seller, on the one hand, and Purchaser, on the other hand, shall have, acting in good faith, each determined an estimate of the Adjusted Working Capital as of the last calendar day of such immediately preceding month (the determination closest to the amount of $38,000,000 being hereinafter referred to as the "Default Estimated Adjusted Working Capital"). -22- 28 (b) Following the determination of the Agreed Estimated Adjusted Working Capital or the Default Estimated Adjusted Working Capital, as the case may be, the Closing Payment shall be adjusted as follows: (i) in the event the Agreed Estimated Adjusted Working Capital or the Default Estimated Adjusted Working Capital, as the case may be, exceeds the amount of $33,500,000, then the Closing Payment shall be adjusted upward by an amount equal to such excess; and (ii) in the event that the Agreed Estimated Adjusted Working Capital or the Default Estimated Adjusted Working Capital, as the case may be, is less than the amount of $33,500,000, then the Closing Payment shall be adjusted downward by an amount equal to such shortfall. 2.5 Post-Closing Adjustment of Purchase Price. The Purchase Price shall be subject to further adjustment after the Closing as specified in this Section 2.5: (a) As promptly as practicable, but in any event within sixty (60) calendar days following the Closing Date, Purchaser shall deliver to Seller the Closing Balance Sheet, together with a certificate of Purchaser certifying that the Closing Balance Sheet was prepared in accordance with GAAP applied on a basis consistent with the preparation of the Reference Balance Sheet. (b) Subject to clause (ii) of this Section 2.5(b), the Closing Balance Sheet delivered by Purchaser to Seller shall be deemed to be and shall be final, binding and conclusive on the parties hereto. (i) Seller 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 Adjusted Working Capital but only on the basis that the amounts reflected on the Closing Balance Sheet were not prepared in accordance with the same GAAP applied on a basis consistent with the preparation of the Reference Balance Sheet; provided, however, that Seller shall have notified Purchaser in writing of each disputed item, specifying the amount thereof in dispute and setting forth, in reasonable detail, the -23- 29 basis for such dispute, within thirty (30) calendar days of Purchaser's delivery of the Closing Balance Sheet to Seller, and provided, further, if during the thirty (30) day period specified in the preceding proviso Seller shall request access to the work papers of Purchaser relating to the preparation of the Closing Balance Sheet, Purchaser shall provide such work papers to Seller within ten (10) days following Seller's request therefor, and in such event the running of the thirty (30) day period within which Seller may notify Purchaser in writing of items contained in the Closing Balance Sheet that Seller disputes shall be suspended from the date of Seller's request for access to Purchaser's work papers until the date on which all such requested work papers have been provided. In the event of such a dispute, Seller's Accountants and Purchaser's Accountants shall attempt to reconcile the differences, and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties hereto. If Seller's Accountants and Purchaser's Accountants are unable to reach a resolution with such effect within ten (10) calendar days after receipt by Purchaser of Seller's written notice of dispute, Seller's Accountants and Purchaser's Accountants shall submit the items remaining in dispute for resolution to a "Big Five" independent accounting firm other than Seller's Accountants or Purchaser's Accountants mutually acceptable to Purchaser and Seller (the "Independent Accounting Firm"), which shall, within thirty (30) calendar days after such submission, determine and report to Purchaser and Seller upon such remaining disputed items, and such report shall be final, binding and conclusive on Seller and Purchaser. The fees and disbursements of the Independent Accounting Firm shall be allocated between Seller and 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 disputed items so submitted. (ii) In acting under this Agreement, Purchaser's Accountants, Seller's Accountants and the Independent Accounting Firm shall be entitled to the privileges and immunities of arbitrators. -24- 30 (c) The Closing Balance Sheet shall be deemed final for the purposes of this Section 2.5 upon the earlier of (1) the failure of the Seller timely to notify Purchaser of a dispute, (2) the resolution of all disputes, pursuant to Section 2.5(b)(ii), by Purchaser's Accountants and Seller's Accountants, and (3) the resolution of all disputes, pursuant to Section 2.5(b)(ii), by the Independent Accounting Firm. Within three (3) 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 Agreed Estimated Adjusted Working Capital or the Default Estimated Adjusted Working Capital, as the case may be, exceeds the Adjusted Working Capital reflected on the final Closing Balance Sheet, then the Purchase Price shall be adjusted downward in an amount equal to the full amount by which such Agreed Estimated Adjusted Working Capital or Default Estimated Adjusted Working Capital, as the case may be, exceeds the Adjusted Working Capital shown on the final Closing Balance Sheet. Purchaser shall deliver written notice to Seller specifying the amount of such downward adjustment of the Purchase Price, and Seller shall, within three (3) Business Days of receipt of such notice, pay such amount to Purchaser in immediately available funds. (ii) In the event that the Adjusted Working Capital reflected on the final Closing Balance Sheet exceeds the Agreed Estimated Adjusted Working Capital or the Default Estimated Adjusted Working Capital, as the case may be, then the Purchase Price shall be adjusted upward in an amount equal to the full amount by which the Adjusted Working Capital shown on the final Closing Balance Sheet exceeds such Agreed Estimated Adjusted Working Capital or Default Estimated Adjusted Working Capital, as the case may be, and Purchaser shall, within three Business Days of such determination, pay the amount of such excess to Seller by wire transfer in immediately available funds. 2.6 Contingent Consideration. In addition to the consideration set forth in Sections 2.1 and 2.7 hereof, for the twelve-month period commencing on the day immediately following the Closing Date and running through the first anniversary of the Closing, and thereafter for each twelve-month period through the seventh anniversary of the Closing (each -25- 31 such twelve-month period, a "Contingent Consideration Pay Period"), Seller shall be entitled to receive from Purchaser, subject to the provisions of this Section 2.6, an additional cash payment calculated in accordance with the provisions of this Section 2.6 (the "Contingent Consideration"). (a) The Contingent Consideration for a particular Contingent Consideration Pay Period shall be calculated by multiplying the nominal annual production capacity, in metric tons, of the Plant, as specified below, by a rate to be determined based upon the average LME Aluminum High Grade Cash Settlement Quotation, per metric ton (the "Settlement Quotation"), as published in Platt's Metals Week for the applicable Contingent Consideration Pay Period (the "Contingent Consideration Rate"), as set forth below: (i) during the first and second Contingent Consideration Pay Periods, the Contingent Consideration Rate shall be determined in accordance with Part I of Schedule 2.6(a); and (ii) during the third through the seventh Contingent Consideration Pay Periods, the Contingent Consideration Rate shall be determined in accordance with the Part II of Schedule 2.6(a); provided, however, that the total amount of Contingent Consideration payable pursuant to this Section 2.6 shall not exceed Seven Million Dollars ($7,000,000) in the aggregate. In the event that Platt's Metals Week shall cease reporting the Settlement Quotation or shall no longer be in general use in the industry as a benchmark for the actual pricing of sales of aluminum, then Seller and Purchaser shall agree on a suitable substitute indicator for determining the market price of aluminum. For purposes of this Section 2.6, the nominal production capacity of the Plant shall be two hundred thirty-five thousand (235,000) metric tons per annum. (b) Purchaser shall pay or cause to be paid to Seller the Contingent Consideration due, if any, under this Section 2.6 within thirty (30) calendar days after the close of the Contingent Consideration Pay Period with respect to which such Contingent Consideration is due. Such payment shall be made in each case by bank draft, certified check or wire transfer. 26 32 2.7 Assumption of Debt. As further consideration for the sale and transfer of the Shares and Additional Assets being effected hereby, at Closing, Purchaser or an Affiliate of Purchaser designated by Purchaser shall assume the obligations of Seller or Seller's Affiliate with respect to the Assumed Indebtedness and the Assumed Liabilities. In connection with such assumption, Purchaser or an Affiliate of Purchaser designated by Purchaser and Seller or Seller's Affiliates, as applicable, shall enter into an assignment and assumption agreement, in form and substance acceptable to Purchaser and Seller, on and as of the Closing Date. 2A. TRANSACTIONS PRIOR TO CLOSING 2A.1 Partial Redemption of Shares. . Prior to the Closing, Southwire shall cause Metalsco to redeem one hundred twenty (120) shares, subject to adjustment, of the outstanding capital stock of Metalsco (the "Redeemed Shares"), such that after such redemption and on the Closing Date the issued and outstanding capital stock of Metalsco shall consist of eight hundred eighty (880) shares, subject to adjustment, all of which shall constitute the Shares for all purposes hereunder. In consideration for the redemption of the Redeemed Shares, Metalsco shall (a) surrender and return to Southwire that certain promissory note of Southwire issued and delivered in payment for certain assets of Metalsco heretofore purchased by Southwire (the "Note"), which Note shall be marked "Paid In Full and Satisfied," (b) transfer and assign to Southwire one thousand (1,000) shares of the capital stock of Forte Power Systems, Inc. ("Forte"), which shares constitute all of the issued and outstanding capital stock of that company, and (iii) transfer and assign to Southwire all Unwanted Property. Southwire shall tender certificates representing the Redeemed Shares to Metalsco for cancellation on the records of Metalsco against delivery of the Note marked "Paid in Full" and delivery by Metalsco of instruments of transfer for the shares of Forte and the Unwanted Property. 3. REPRESENTATIONS AND WARRANTIES OF SOUTHWIRE Seller hereby represents and warrants to Purchaser as follows: 3.1 Organization and Good Standing. Southwire is a corporation duly incorporated, entitled to conduct business and validly existing in good standing under the corporate laws of the State of Delaware. Metalsco is a corporation duly incorporated, entitled to conduct business and validly existing in good standing under the corporate laws of the State of -27- 33 Georgia. Skyliner is a corporation duly incorporated, entitled to conduct business and validly existing in good standing under the corporate laws of the State of Delaware. NSA is a limited partnership duly organized, entitled to conduct business and validly existing in good standing under the limited partnership laws of the State of Kentucky. Each of Seller, Metalsco and Skyliner has full corporate power and authority, and NSA has full partnership power and authority, to conduct its business as it is now being conducted and to own or use the property and assets that it owns or uses. Each of Metalsco, Skyliner and NSA is duly licensed or qualified to do business as a foreign corporation or foreign limited partnership, as appropriate, and in good standing under the laws of each state or other jurisdiction in which either the ownership or use of the properties or assets owned or used by it, or the nature of the activities conducted by it, requires such licensing or qualification, except to the extent that the failure to be so licensed or qualified would not (a) adversely affect the ability of Seller to carry out all of its obligations under this Agreement and the Related Agreements, or (b) have a Material Adverse Effect. 3.2 Capitalization. (a) As of the date hereof, the outstanding capital stock of Metalsco consists of one thousand (1,000) shares of common stock, no par value. All of such shares have been duly authorized, validly issued, are outstanding, are fully paid and nonassessable, and such shares were not issued in violation of any preemptive rights. Seller owns all of such shares free and clear of all liens or other restrictions or claims of any other Person. Other than such shares of common stock, there are no other shares of stock of Metalsco of any class which have been authorized or issued. As of the Closing Date, the Shares shall consist of eight hundred eighty (880) shares of common stock, no par value, after giving effect to the redemption described in Section 2A.1 and shall constitute all of the authorized, issued and outstanding shares of capital stock of Metalsco. (b) On and as of the Closing Date, the Shares shall be duly authorized, validly issued and outstanding, fully paid and nonassessable and shall not have been issued in violation of any preemptive rights. On and as of the Closing Date, Seller shall own all of the Shares free and clear of all liens or other restrictions or claims by any other Person and shall have good and marketable title to the Shares. Neither Seller nor Metalsco has and as of the -28- 34 Closing Date neither of them shall have any commitment or obligation to issue or sell any shares of the capital stock or any securities or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for, purchase or otherwise acquire from Seller or Metalsco (whether by preemptive right, right of first refusal or otherwise), any such shares of capital stock or securities of Metalsco, and no such securities or obligations are or shall be issued or outstanding. (c) The authorized capital stock of Skyliner consists of five hundred (500) shares of common stock, one dollar ($1.00) par value, of which two hundred (200) shares are issued and outstanding. All of such shares of capital stock of Skyliner are duly authorized, validly issued and outstanding, fully paid and nonassessable and were not issued in violation of any preemptive rights. Metalsco owns as of the date hereof, all of such shares of capital stock of Skyliner free and clear of all liens or other restrictions or claims by any other Person. None of Seller, Metalsco or Skyliner has and as of the Closing Date none of them shall have any commitment or obligation to issue or sell any shares of the capital stock or any securities or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for, purchase or otherwise acquire from Seller, Metalsco or Skyliner (whether by preemptive right, right of first refusal or otherwise), any such shares of capital stock or securities of Skyliner, and no such securities or obligations are or shall be issued or outstanding. (d) As of the date hereof and as of the Closing Date, the Partnership Agreement is and shall be in full force and effect, all of the partnership interests of NSA are and will be duly and validly held by Metalsco and Skyliner in accordance with the Partnership Agreement and each of Metalsco and Skyliner has and will have made in full all capital contributions required to be made by it in accordance with the Partnership Agreement. No other Person has or will have a right to any partnership interest in NSA and none of Seller, Metalsco, Skyliner or NSA has and as of the Closing Date shall have any commitment or obligation to sell or otherwise convey to any Person any partnership interests or rights to participate in the capital of NSA. -29- 35 (e) At the time of the Closing, Metalsco shall have no subsidiaries, direct or indirect, other than NSA and Skyliner and no Property other than the shares of capital stock of Skyliner and the general partnership interest in NSA. (f) Set forth on Schedule 3.2(f) is a complete list of all Persons which are or at any time were subsidiaries, whether direct or indirect, of Metalsco, Skyliner or NSA or in which any of such entities has held an ownership interest, including (i) the date and jurisdiction of incorporation or formation for each Person and the date and manner of disposition of the ownership interest in such other Person or other termination thereof and (ii) an accurate history summarizing the material corporate events for each such Person, including the businesses conducted and the Properties owned, leased or otherwise operated by such Person. 3.3 Authority; No Conflict. (a) Seller has the corporate power and authority to execute, deliver and perform its obligations under this Agreement and each of the Related Agreements to which it is a party and to consummate the Contemplated Transactions. The execution and delivery by Seller of this Agreement and each of the Related Agreements to which it is a party, the performance by Seller of its obligations hereunder and thereunder and the consummation by Seller of the Contemplated Transactions have been duly authorized by all corporate actions required of Seller, including without limitation approval by the Board of Directors of Seller. This Agreement has been duly executed and delivered by Seller and constitutes the legal, valid, and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other Legal Requirement affecting creditors' rights generally and by other equitable principles, including, without limitation, those limiting the availability of specific performance, injunctive relief and other equitable remedies. Upon the execution by Seller of each of the Related Agreements to which it is a party, such Related Agreement will be duly executed and delivered and (assuming, in the case of each Related Agreement to which Purchaser is a party, due authorization, execution and delivery by the other Persons party thereto) will constitute the legal, valid, and binding obligations of Seller, enforceable against Seller in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium -30- 36 or other Legal Requirement affecting creditors' rights generally and by other equitable principles, including, without limitation, those limiting the availability of specific performance, injunctive relief and other equitable remedies. (b) Except as set forth in Schedule 3.3(b) and other than filings with the Federal Trade Commission and the Department of Justice under the HSR Act, the execution and delivery by Seller of, and performance of its obligations under, this Agreement and each of the Related Agreements to which it is a party, and the consummation of any of the Contemplated Transactions, will not, directly or indirectly: (i) contravene, conflict with, or result in a violation of any provision of its certificate of incorporation or bylaws or other organizational documents, as the case may be, of Seller or any of its Affiliates; (ii) contravene, conflict with, or result in a violation of, or give any Governmental Body or other Person the right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under, any Order or to the Knowledge of Seller and its Affiliates any Legal Requirement to which it or any of its Affiliates is subject; (iii) contravene, conflict with, or result, in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate, restrain, amend or modify the terms of any material Governmental Authorization held by it, Metalsco, Skyliner or NSA or that otherwise affects the Business; (iv) contravene, conflict with, or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel or terminate any Material Contract (including, without limitation, any Lease) to which it, Metalsco, Skyliner or NSA is a party and which relates to the Business; or -31- 37 (v) result in the imposition or creation of any Encumbrance other than a Permitted Encumbrance upon or with respect to any of its property or assets or any of the property or assets of Metalsco, Skyliner or NSA. (c) Except as set forth in Schedule 3.3(c) and other than filings with the Federal Trade Commission and the Department of Justice under the HSR Act, neither Seller nor any of its Affiliates is, and neither Seller nor any of its Affiliates will be, required to give any notice to or obtain any Consent from any Person in connection with the Contemplated Transactions. 3.4 Books and Records. (a) True and accurate copies of the portions of the minute books of Seller for the preceding three (3) years that relate to the Business (other than matters that relate principally to the contemplated sale of the Business) have been delivered to Purchaser, and such portions accurately reflect in all material respects all actions taken by the shareholders, the Board of Directors and all committees of the Board of Directors of Seller with respect to the Business (other than matters that relate principally to the contemplated sale of the Business). (b) The minute books of Metalsco, Skyliner and NSA, true and accurate copies of which have been delivered to Purchaser, reflect in all material respects all actions taken by the shareholders or partners, as the case may be, the Boards of Directors and all committees of the Boards of Directors or other decision making body of each such entity. (c) The books of account and other financial records of NSA (i) reflect all items of income and expense and all assets and liabilities required to be reflected therein in accordance with GAAP, (ii) are in all material respects complete and correct, fully reflect the conduct and operation of the Business throughout the periods involved and do not contain or reflect any material inaccuracies or discrepancies and (iii) have been maintained in accordance with good business and accounting practices. (d) 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 -32- 38 other documents, records and files and all Owned Intellectual Property are and will be delivered to Purchaser or an Affiliate of Purchaser designated by Purchaser, on the Closing Date, in good order. 3.5 Financial Statements. (a) The Financial Statements (i) were prepared in accordance with the books of account and other financial records maintained with respect to the Business, and (ii) are complete in all material respects and fairly present the financial condition and the results of operations of the Business as at the respective dates of and for the periods referred to in such Financial Statements, all in accordance with GAAP except as set forth on Schedule 3.5. (b) The audited consolidated balance sheet of Southwire and its subsidiaries as of, and the related audited consolidated statements of income for the year ended December 31, 1999, true and accurate copies of which have been delivered by Seller to Purchaser, were prepared in accordance with GAAP and fairly present the financial condition and the results of operations of Southwire and its subsidiaries as at the date and for the period referred to in such financial statements. Since the date of such financial statements, there has been no event, circumstance, development, change or occurrence which, individually or together with any other event, circumstance, development, change or occurrence has or reasonably could be expected to have a material adverse impact on the business, operations, properties, financial position or results of operations of Southwire and its subsidiaries, taken as a whole. 3.6 No Undisclosed Liabilities. There are and as of the Closing Date there will be no Liabilities of Metalsco, Skyliner, NSA or the Business, other than Liabilities (i) reflected or reserved against on the Reference Balance Sheet, (ii) if not fully reflected or reserved against on such Reference Balance Sheet, disclosed on Schedule 3.6, (iii) incurred since the date of the Reference Balance Sheet in the ordinary course of business, consistent with the past practice of the Business, and (iv) obligations incurred in the ordinary course of business pursuant to Contracts disclosed in the schedules to this Section 3. The accruals that are reflected on the Reference Balance Sheet for Liabilities (excluding those referred to in the preceding sentence) have been established on a basis consistent with the past practices of the Business and in accordance with GAAP. Without limiting the foregoing, neither Metalsco, Skyliner nor NSA -33- 39 has nor shall have as of the Closing Date any Liabilities arising out of or relating to the Unwanted Property or otherwise arising out of or relating to the prior operations of the Seller or its Affiliates, including Metalsco, Skyliner or NSA, other than Liabilities arising out of or relating to the Business. None of the businesses conducted by Southwire and its Affiliates with or through the Unwanted Property was operated (a) on or from the Real Property, (b) by or utilizing any of the Employees, in their capacity as employees of NSA, Metalsco or Skyliner, or (c) utilizing any of the Assets. For all purposes under any and all applicable bankruptcy, insolvency, fraudulent conveyance and similar laws, on the date hereof and at the Closing and after giving effect to the actions contemplated by this Agreement and the Closing, Metalsco will be solvent, as such term is defined for purposes of such applicable laws. 3.7 Operating Plans; Capital Budgets; Projections. (a) Attached hereto as Part I of Schedule 3.7(a) are true and accurate lists of the operating and capital expenditures made with respect to the Business for each of the calendar years ending on December 31, 1997, 1998 and 1999 and a list of the capital improvements and non-capital maintenance projects expenditures and commitments made with respect to the Business for the period from January 1 to July 31, 2000. Also attached hereto as Part II of Schedule 3.7(a) are true and correct copies of the business plan and capital expenditure budget for the calendar year ending December 31, 2000. (b) Attached hereto as Schedule 3.7(b) is a list of capital projects and projected expenditures that Seller believes will be required to be made in connection with the Business during the calendar years 2000-2002. Such list and projections have been developed by Seller in good faith and based upon assumptions which are reasonable in light of all facts Known to Seller and NSA as of the date hereof and past practices of the Business and includes the capital expenditure budget delivered pursuant to Section 3.7(a) and any changes or additions thereto of which Seller and its Affiliates have Knowledge since the time such budget was adopted. -34- 40 3.8 Sales and Purchase Order Backlog. (a) As of July 31, 2000, the total contract value, assuming the metals prices as of July 31, 2000, of open sales orders accepted by the Business totaled approximately $165,000,000. Schedule 3.8(a) lists all sales orders exceeding $10,000 per order, which have been accepted by or on behalf of the Business and which were open either as of June 30, 2000 or as of such date not more than ten days prior to the date hereof, as indicated on such schedule. (b) As of July 31, 2000, open purchase orders issued by the Business totaled approximately $63,116,752. Schedule 3.8(b) lists all purchase orders exceeding $10,000 per order, which have been issued by or on behalf of the Business and which were open either as of June 30, 2000 or as of such date not more than ten days prior to the date hereof, as indicated on such schedule. 3.9 Accounts Receivable. Schedule 3.9 contains a list of all the Receivables as of June 30, 2000, showing separately those Receivables that as of such date had been outstanding (i) for less than the due date, (ii) from 1 to 30 days past due, (iii) from 31 to 60 days past due and (iv) over 60 days past due. All Receivables reflected on Schedule 3.9 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 Inventories or services to Persons in the ordinary course of business consistent with the past practice of the Business and to the Knowledge of Seller and NSA, constitute or will constitute, as the case may be, only valid, undisputed claims of NSA, not subject to any claims of set-off or other defenses or counterclaims. The reserves for doubtful accounts reflected on the unaudited balance sheet of NSA as of June 30, 2000 are in accordance with GAAP and are believed to be adequate as of the date thereof. None of the Receivables represents monies due for goods either sold on consignment or sold on approval or subject to any similar arrangement. 3.10 Inventories. (a) Subject to amounts reserved therefor on the unaudited balance sheet of NSA as of June 30, 2000, the values at which all Inventories are carried on the unaudited balance sheet of NSA as of June 30, 2000 are in accordance with GAAP and reflect the historical -35- 41 inventory valuation policy of the Business 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 on Schedule 3.10, NSA has good and marketable title to the Inventories free and clear of all Encumbrances, except for Permitted Encumbrances. Except as set forth on Schedule 3.10, the Inventories do not consist of any items held on consignment or subject to any similar arrangement. The Business is not under any obligation or liability with respect to accepting returns of items of Inventories or merchandise in 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 June 30, 2000. Except as set forth on Schedule 3.10, there has not been acquired or committed to acquire or manufactured for the Business Inventories for sale which are 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. Schedule 3.10 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. 3.11 Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. (a) Since the date of the Reference Balance Sheet, except as disclosed in Schedule 3.11(a), the Business has been conducted in the ordinary course and consistent with past practice. As amplification and not limitation of the foregoing, except as set forth on Schedule 3.11(a), since the date of the Reference Balance Sheet, none of Seller, Metalsco, Skyliner or NSA has: (i) 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; -36- 42 (ii) 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; (iii) written down or written up (or failed to write down or write up) the value of any Inventories or Receivables or revalued any assets or liabilities of the Business other than in the ordinary course of the Business consistent with past practice and in accordance with the same GAAP as applied in the preparation of the Financial Statements as of and for the year ended, December 31, 1999; (iv) made any change in any method of accounting or accounting practice or policy related to the Business, other than such changes required by GAAP and disclosed in writing to Purchaser; (v) amended, terminated, canceled or compromised any material claims of the Business or waived any other rights of substantial value to the Business; (vi) 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; (vii) made any commitment for any capital expenditure in respect of the Business that will not be fully expended as of the Closing Date in excess of $100,000 individually or $500,000 in the aggregate; (viii) made any changes in the customary methods of operations of the Business, including, without limitation, practices and policies relating to manufacturing, purchasing, marketing, selling and pricing, except for changes which are not material and are in the ordinary course of business; -37- 43 (ix) made any express or deemed election or settled or compromised any liability, with respect to Taxes of the Business or the Company Affiliated Group; (x) failed to pay any creditor any amount owed to such creditor when due, except for any amounts of not more than $10,000 individually or $25,000 in the aggregate; (xi) (A) established or increased or promised to increase the benefits under any Employee Benefit Plan (including, without limitation, the granting of stock options, stock appreciation rights, performance awards or other restricted stock awards), 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 for ordinary increases in wages or salaries and bonuses consistent with the past practice of the Business; (xii) entered into any employment or severance agreement with any of the employees or consultants of the Business; (xiii) terminated, discontinued, closed or disposed of any plant, facility or other 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; (xiv) to the Knowledge of Seller, Metalsco, Skyliner and NSA, 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; -38- 44 (xv) suffered any casualty loss or damage with respect to any of the assets of the Business which in the aggregate have a replacement cost of more than $100,000, whether or not such losses or damages shall have been covered by insurance; (xvi) amended or restated the certificate of incorporation, by-laws, certificate of limited partnership, partnership agreement or other organizational document of Metalsco, Skyliner or NSA; (xvii) suffered any Material Adverse Effect; (xviii) entered into any contract or agreement in respect of the Business between or among Seller or any Affiliate of Seller and any other Affiliate of Seller; (xix) (A) amended any policy of the Business relating to the payment of accounts payable or accounts receivable, (B) cancelled, or modified the terms and conditions of payment of, any amounts due to the Business in respect of Receivables, or (C) 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 (A) or (B), in the ordinary course of business consistent with past practice; or (xx) agreed, whether in writing or otherwise, to take any of the actions specified in this Section 3.11 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 3.11, except as expressly contemplated by this Agreement and the Related Agreements. (b) Except as set forth on Schedule 3.11(b), each of Metalsco and Skyliner (including every predecessor entity thereof) has acted since its formation solely as a holding company, and neither has acted in any other capacity, including, without limitation, as the operator of a business or the owner of any Properties. -39- 45 3.12 Real Estate Matters. (a) The Real Property constitutes all of the real property (other than the Closed Potliner Disposal Areas), including buildings, improvements and fixtures, owned or otherwise held by any of Seller, Metalsco, Skyliner or NSA and utilized in the conduct of the Business as conducted presently and as of December 31, 1999 and Metalsco, Skyliner and NSA neither lease nor own any other real property. (b) Except as set forth on Schedule 3.12(b), there is no material violation of any Legal Requirement (including, without limitation, any building, planning or zoning Legal Requirement) relating to any of the Real Property or the Closed Potliner Disposal Areas. Seller has made available to Purchaser true and correct copies of each deed for each parcel of Real Property and all the title insurance policies, if any, title reports, surveys, certificates of occupancy, environmental reports and audits, appraisals, Permits, other title documents and other documents in the possession of the Seller or its Affiliates relating to or otherwise affecting the Real Property. Each of Seller, Metalsco, Skyliner or NSA, as the case may be, is in peaceful and undisturbed possession of each of its parcels of Real Property and the Closed Potliner Disposal Areas and there are no contractual or legal restrictions that preclude or restrict 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 construction, 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. There are no material latent defects or material adverse physical conditions affecting any of the Real Property or any of the facilities, buildings, structures, erections, improvements, fixtures, fixed assets and personalty of a permanent nature annexed, affixed or attached to, located on or forming part of the Real Property. Except as set forth on Schedule 3.12(b), no portion of the Real Property has been leased or subleased to any other Person. (c) Except as set forth on Schedule 3.12(c), all the Real Property is occupied under a valid and current certificate of occupancy or similar permit (if one is required), the transactions contemplated by this Agreement will not require the issuance of any new or amended certificate of occupancy and, to the Knowledge of Seller, Metalsco, Skyliner and NSA -40- 46 after due inquiry, there are no facts that would prevent any of the Real Property from being occupied and used after the Closing in the same manner as immediately prior to the Closing. (d) All improvements on the Real Property were constructed in compliance with all applicable Legal Requirements (including, but not limited to, any building, planning or zoning Legal Requirements) affecting the Real Property and 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 Business. (e) Except as otherwise set forth on Schedule 3.12(e), there have been no improvements of a value in excess of $10,000 in the aggregate made to or construction on any Real Property within the applicable period for the filing of mechanics' liens. 3.13 Assets. (a) Except as set forth on Schedule 3.13, Seller or NSA, as the case may be, owns, leases or has the legal right to use all of the assets, properties, including real property and personal property, whether tangible or intangible, and rights which are used or intended for use in or in connection with the Business, including, without limitation, the Owned Intellectual Property, the Licensed Intellectual Property, the Real Property and any other tangible personal property, used or intended to be used in the conduct of the Business, and, with respect to contract rights, is a party to and enjoys the right to the benefits of all contracts, agreements and other arrangements used or intended to be used in or relating to the conduct of the Business, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other Legal Requirement affecting creditors' rights generally and by other equitable principles, including, without limitation, those limiting the availability of specific performance, injunctive relief and other equitable remedies. Other than the Additional Assets, which are owned or held by Seller as of the date hereof and will be transferred to Purchaser or an Affiliate or assignee of Purchaser designated by Purchaser on the Closing Date, all of the assets described -41- 47 in the immediately preceding sentence are owned or held by NSA as of the date hereof. All such assets, properties and rights used or intended for use in the Business, including without limitation the Additional Assets, are hereinafter referred to as the "Assets." Except as provided in Section 3.13(b), the Assets include, without limitation, the following: (i) the Plant, including the Real Property; (ii) all furniture, fixtures, equipment, machinery, spare parts, packaging materials, oil and other tangible personal property used or held for use by Seller, Metalsco, Skyliner or NSA at the Plant or any other location at or from which the Business is conducted or otherwise owned or held by Seller and its Affiliates for use in the Business; (iii) all vehicles and transportation equipment used or intended for use in the Business, all of which are identified on Schedule 3.13(a)(iii) attached hereto; (iv) all Inventories and Receivables of the Business; (v) the goodwill of Seller and its Affiliates relating to the Business; (vi) all of Seller's and its Affiliates' right, title and interest in, to and under the Owned Intellectual Property and the Licensed Intellectual Property used in, or relating to, the Business; (vii) all claims, causes of action, choses in action, rights of recovery and rights of set-off of any kind (including rights to insurance proceeds 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 Business and enuring to the benefit of the Seller or any of its Affiliates; (viii) all rights of the Seller and its Affiliates under all contracts, including without limitation Material Contracts, licenses, sublicenses, agreements, leases, -42- 48 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 Business; (ix) all municipal, state and federal Permits, franchises, licenses, agreements, waivers and authorizations held or used by Seller or any of its Affiliates in connection with, or required for, the Business, to the extent transferable; and (x) all of Seller's and its Affiliates right, title and interest in, to and under all other assets, rights and claims of every kind and nature used in the Business. Except as set forth on Schedule 3.13, Seller or NSA, as the case may be, has and NSA will have as of the Closing Date good and marketable title to, or, in the case of leased or subleased Assets, valid and subsisting leasehold interests in, all the Assets, free and clear of all Encumbrances, except for Permitted Encumbrances. (b) Notwithstanding anything to the contrary contained in this Agreement or any Exhibit hereto or any Schedule furnished hereunder, the Assets shall not include, and neither Purchaser nor any Affiliate of Purchaser shall acquire any interest in, any of the following assets of or related to the Business: (i) All claims, causes of action, choses in action, rights of recovery and rights of set-off of any kind (including rights to insurance proceeds and rights under and pursuant to all warranties, representations and guarantees) pertaining to or arising out of the Business, with respect to any event or occurrence prior to the Closing Date, that are listed on Schedule 3.13(b) (as of the date of this Agreement or supplementally prior to the Closing Date) which (x) have been asserted on or prior to the Closing Date by Seller or any of its Affiliates and (y) which seek to recover for the account or benefit of Seller or any of its Affiliates all or a portion of any loss, cost, damage, expense or liability actually suffered or incurred by, or any amounts actually paid in repair, remediation, reconstruction or settlement (in each case, including reasonable attorneys' and consultants' fees) by, Seller or any of its Affiliates and not reflected as an asset on the Closing Balance Sheet; -43- 49 (ii) all credits with respect to patronage capital owed to Seller or any of its Affiliates by Kenergy under the Power Contract for the time period up to and including the Closing Date; (iii) the Closed Potliner Disposal Areas; and (iv) the equipment comprising the Current Groundwater Recovery and Treatment System. (c) The Assets, including the Material Contracts (taken together with the Shared Services Agreement, the Environmental Access and Cooperation Agreement, the Aluminum Supply Agreement and the Power Supply Agreements) constitute all the properties, assets and rights as are necessary in and for the conduct of the Business as presently conducted. Except as set forth on Schedule 3.13(c), all of the Assets with a replacement value in excess of $5,000 and that (other than replacement parts or equipment) have been used in the Business during the last twelve (12) months are and will be as of the Closing Date in good repair and operating condition and suitable for the purposes for which they are used or intended without the necessity of any repairs, the costs of which are reasonably likely to exceed with respect to any such Asset individually $10,000 or with respect to all such Assets $25,000 in the aggregate, and, since the date of the Reference Balance Sheet, Seller has and will have as of the Closing Date caused the Assets to be maintained in accordance with NSA's normal maintenance standards consistent with past practice of the Business. (d) Except as set forth in Schedule 3.13(d), Seller has the right to sell, assign, transfer, convey and deliver the Additional Assets to Purchaser without penalty. Following the consummation of the transactions contemplated by this Agreement, Purchaser will own, with good, valid and marketable title, or lease, under valid and subsisting leases, or otherwise acquire the interests of Seller in the Assets, free and clear of any Encumbrances, other than Permitted Encumbrances, and without incurring any penalty, including, without limitation, any increase in rentals, royalties, or license or other fees imposed in respect of the Assets as a result of, or arising from, the consummation of the transactions contemplated by this Agreement, except for any applicable transfer, sales and use, recording, documentary, stamp or other similar -44- 50 taxes or fees related to or arising out of such assignment, transfer, conveyance or delivery of the Assets which will be paid as provided for in Section 6.3(h). 3.14 The Business. (a) As a result of this Agreement and the transactions provided for herein, Purchaser will acquire direct or indirect beneficial ownership of all of the Assets. (b) The Business will be operational on the Closing Date in substantially the same manner as conducted immediately prior to the date hereof. 3.15 Customers. Listed on Schedule 3.15(a) are the names and addresses of, and contact persons for, the ten (10) most significant customers, by revenue, of the Business (other than Southwire) for the calendar years 1997, 1998 and 1999, the aggregate amount for which each such customer was invoiced for each such year and the discounts provided, if any. 3.16 Product Warranties. Except as set forth in Schedule 3.16, no product manufactured or sold by the Business is subject to any express warranty or any other warranty other than any warranties that are implied by applicable Legal Requirements. 3.17 Tax Matters. Except as set forth in Schedule 3.17: (a) Metalsco, Skyliner, and NSA (the "Companies"), and each entity which has at any time been a member of an affiliated group within the meaning of Code Section 1504(a) which included within such group any of the Companies (such affiliated entities together with the Companies collectively as the "Company Affiliated Group") have timely filed each Tax Return that they were required to file. Each such Tax Return was correct and complete in all respects. All Taxes owed by any member of the Company Affiliated Group (whether or not shown on any Tax Return) have been paid in full for each taxable period during which any of the Companies was a member of the Company Affiliated Group. No member of the Company Affiliated Group is the beneficiary of any extension of time that is currently in effect within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where any member of the Company Affiliated Group does not file Tax Returns that any member of the Company Affiliated Group is or may be subject to Taxes by that jurisdiction. There are no -45- 51 liens on any of the assets of any of the Companies that arose in connection with any failure (or alleged failure) to pay any Tax. (b) There is no dispute or claim, pending or Threatened, concerning any Liability for Taxes of any member of the Company Affiliated Group for any taxable period during which any of the Companies was a member of the Company Affiliated Group either (1) claimed or raised by any authority in writing, or (2) as to which the Seller and any member of the Company Affiliated Group has Knowledge. Schedule 3.17 lists all federal, state, local, and foreign income Tax Returns filed with respect the members of the Company Affiliated Group for taxable periods for which the applicable statute of limitations has not expired, and indicates those Tax Returns that have been audited, and indicates those Tax Returns that currently are the subject of audit. The Seller has delivered to, or made available to, the Purchaser correct and complete copies of all federal, state and local income Tax Returns, examination reports, and statements of deficiencies assessed against or agreed to by the members of the Company Affiliated Group since January 1, 1993. Neither the Seller nor any director or officer (or employee or agent responsible for Tax matters) of any member of the Company Affiliated Group expects any authority to assess any additional Taxes against any member of the Company Affiliated Group for any taxable period during which any of the Companies was a member of the Company Affiliated Group. (c) No member of the Company Affiliated Group has waived any statute of limitations in respect of Taxes or agreed to any extension of time (where such waiver or extension is currently in effect) with respect to a Tax assessment or deficiency. (d) Neither the Seller nor any member of the Company Affiliated Group has Knowledge of any proposed or Threatened reassessments of any property owned by any member of the Company Affiliated Group or other proposals that could increase the amount of Tax to which any member of the Company Affiliated Group would be subject. (e) None of the Companies has made any payments, or is obligated to make any payments, or is a party to any agreement that under certain circumstances could obligate it to make any payments that will not be deductible under Code Section 280G. -46- 52 (f) None of the Companies has filed a consent under Code Section 341(f) concerning collapsible corporations. None of the Companies has been a United States real property holding corporation within the meaning of Code Section 897(c)(2) during the applicable period specified in Code Section 897(c)(1)(A)(ii). Each member of the Company Affiliated Group has disclosed on their federal income Tax Returns all positions taken therein that are reasonably likely to give rise to a substantial understatement of federal income Tax within the meaning of Code Section 6662. (g) The Seller will make available to the Purchaser prior to Closing the following information with respect to each Company as of the most recent practicable date (as well as on an estimated pro forma basis as of the Closing giving effect to the consummation of the transactions contemplated hereby): (1) the basis of each Company in its assets, and (2) the amount of each Company's net operating loss, net capital loss, unused investment or other credit, unused foreign Tax credit, or excess charitable contributions. (h) The unpaid Taxes of the Company Affiliated Group for which the Companies would have Liability for Taxes do not, as of the Closing Date, exceed the reserve for Tax Liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the Closing Balance Sheet. 3.18 Employee Benefits. (a) Schedule 3.18 lists every Employee Benefit Plan. A complete and accurate copy of each Employee Benefit Plan (or, if not written, a written summary of its material terms) and a complete and accurate copy of each material document prepared in connection with each such Plan, has been provided to or been made available to Purchaser prior to the Closing Date, 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 and (iv) the most recently prepared actuarial report and financial statement in connection with each such Plan, if applicable. Except as set forth on Schedule 3.18 there are no other Employee Benefit Plans, whether formal or informal and whether or not in writing -47- 53 (b) Except as set forth on Schedule 3.18, neither Seller nor any entity that together with Seller is considered a single employer within the meaning of Section 414 of the Code ("ERISA Affiliate"), sponsors, contributes to, or is obligated under Title I or IV of ERISA to contribute to a "defined benefit plan" (as defined in ERISA Section 3(35)). Neither Seller nor any ERISA Affiliate of NSA has had an "obligation to contribute" (as defined in ERISA Section 4212) to a "multiemployer plan" (as defined in ERISA Sections 4001(a)(3) and 3(37)(A)). (c) Except as set forth on Schedule 3.18, all the Employee Benefit Plans and the related trusts, to the extent applicable, have been administered in material compliance with (i) the provisions of such Employee Benefit Plans, (ii) the provisions of ERISA, (iii) provisions of the Code relating to qualification and tax exemption under Code Sections 401(a) and 501(a) or otherwise applicable to secure intended tax consequences, (iv) applicable state or federal securities laws, and (v) all other applicable Legal Requirements and collective bargaining agreements, and neither Seller nor any of its Affiliates has received any notice from any Governmental Body questioning or challenging such compliance. All available Governmental Authorizations for the Employee Benefit Plans have been obtained, including, but not limited to, timely determination letters on the qualification of any Employee Benefit Plan subject to Code Section 401(a) and tax exemption of related trusts, as applicable under the Code, and all such Governmental Authorizations continue in full force and effect. A copy of the most recent determination letter has been delivered to Purchaser, and nothing has occurred since the date of such letter which will or could give rise to disqualification of any such Employee Benefit Plan or loss of tax exemption or to any tax under Section 511 of the Code. (d) Except as set forth on Schedule 3.18, there are no unresolved claims or disputes under the terms of, or in connection with, the Employee Benefit Plans other than claims for benefits which are payable in the ordinary course and no litigation has been commenced with respect to any Employee Benefit Plan. (e) All contributions, premiums or payments required to be made with respect to any Employee Benefit Plan have been made on or before their due dates. All such -48- 54 contributions which have been deducted for income tax purposes have not been challenged or disallowed by any government entity. (f) Except as set forth on Schedule 3.18, the consummation of the transactions contemplated by this Agreement will not (i) entitle any current or former employee of Seller to severance pay, unemployment compensation or any payment contingent upon a change in control or ownership of Seller, or a sale of assets or (ii) accelerate the time of payment or vesting, or increase the amount, of any compensation due to any such employee or former employee. 3.19 Compliance With Laws; Permits. (a) Except as set forth on Schedule 3.19(a), and except for matters relating to compliance with Environmental Laws (the compliance with such Environmental Laws being solely the subject of Section 3.24 hereof) and matters relating to the Real Property and improvements thereon (the compliance with Legal Requirements relating to the Real Property and improvements thereon being solely the subject of Section 3.12 hereof): (i) Seller or NSA, as the case may be, has and at Closing NSA shall have in effect all Permits or licenses (other than such Permits or licenses the failure to have in effect could not give rise to Liabilities in excess of $25,000 in the aggregate) necessary to operate and carry on the Business as presently conducted and to own and operate the Assets and there are no defects in any of such Permits or licenses and as of the Closing Date none of such Permits or licenses shall have been allowed to lapse or terminate; (ii) the Business has been and continues to be conducted in accordance in all material respects with all Governmental Orders, and to the Knowledge of Seller, Metalsco, Skyliner and NSA, all Legal Requirements, applicable to the Business or the Assets; and (iii) neither Seller nor any of its Affiliates has received (A) written notification or communication from any Governmental Body (x) asserting that any or all of them are not in compliance with any Legal Requirement which such -49- 55 Governmental Body enforces or administers, (y) threatening to revoke any Permit necessary for the conduct and operation of the Business, or (z) requiring a Person to enter into or consent to the issuance of a cease and desist order, formal agreement, directive, commitment or memorandum of understanding with respect to the operation of the Business, or (B) to the Knowledge of Seller, Metalsco, Skyliner and NSA, any oral notification or communication that has overtly threatened any such assertion, revocation or requirement, other than such of the foregoing which has been resolved to the satisfaction of the applicable Governmental Body and which will require no further action on the part of Purchaser, Seller or any of their respective Affiliates. (b) Except as set forth on Schedule 3.19(b), all Permits held or used by Seller and its Affiliates in connection with, or required for, the Business, are either (i) held by NSA or Metalsco or (ii) transferable to the Purchaser, an Affiliate of the Purchaser, or NSA and on the Closing Date will be duly and validly transferred to the Purchaser, an Affiliate of the Purchaser, or NSA, as the case may be, and in full force and effect upon the Closing. 3.20 Legal Actions; Orders; Workers' Compensation Claims. (a) Except as set forth on Schedule 3.20 and except for Environmental Matters (Environmental Matters being solely the subject of Section 3.24): (i) there is no Action that has been commenced by or against Seller or any of its Affiliates and that is presently pending arising out of or relating to the Business or any of the Assets or any Unwanted Property; (ii) there is no Action that has been commenced by or against Seller or any of its Affiliates and that is presently pending or to the Knowledge of Seller that is threatened against Seller or any of its Affiliates that challenges, or that would have the effect of preventing or rendering illegal, any of the Contemplated Transactions; (iii) there is no Order to which Seller or any of its Affiliates is subject relating to or arising out of or in connection with the Business or the Unwanted Property or to which any of the Assets or the Unwanted Property is subject; and -50- 56 (iv) Seller and its Affiliates have complied in all material respects with all of the terms and requirements of each Order set forth on Schedule 3.20. (b) Schedule 3.20 contains a complete list and accurate summary, including current status, of all pending workers' compensation claims in excess of $5,000 individually and $25,000 in the aggregate asserted by any current or former employee of the Business. 3.21 Material Contracts. (a) Schedule 3.21(a) lists each of the following contracts and agreements (including, without limitation, oral contracts) of Seller or any of its Affiliates in respect of the Business and of Metalsco, Skyliner or NSA (such contracts and agreements, together with all contracts and agreements relating to Intellectual Property set forth on Schedule 3.22, being "Material Contracts"): (i) all financing agreements, settlement agreements and consent agreements pursuant to which Metalsco, Skyliner, NSA or the Business has been during the past three years, is or will be liable to make payment in an amount in excess of $100,000; (ii) each contract, agreement, invoice, purchase order, lease and other arrangement, for the purchase of Inventories, spare parts, supplies, other materials or personal property with any supplier or for the furnishing of services to the Business under the terms of which the Business: (A) is likely to pay or otherwise give consideration of more than $100,000 in the aggregate over the remaining term of such contract, or (B) cannot be canceled by the Business without penalty or further payment or upon less than 60 days' notice; (iii) each contract, agreement, invoice, sales order, lease 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 $100,000 in the aggregate over the remaining term of the contract and cannot be -51- 57 canceled by the Business without penalty or further payment or upon less than 60 days' notice; (iv) all contracts and agreements in respect of the Business with any Governmental Body; (v) all collective bargaining agreements or contracts with any labor union; (vi) all contracts and agreements that limit the right of the Business to compete in any material respect in any line of business or with any Person or in any geographic area or during any period of time; (vii) each contract and agreement in respect of the Business between or among Seller and any Affiliate of Seller which is likely to involve consideration in excess of $25,000 over the next twelve months; (viii) all contracts and agreements for the provision of utilities (including, without limitation, electricity, gas and conversion services) to the Business; (ix) all contracts and agreements for the purchase of property or equipment in an amount in excess of $100,000 pursuant to which Seller or any of its Affiliates has or may have any rights with respect to any warranty relating to such property or equipment; (x) any contract or agreement pursuant to which Seller or any of its Affiliates has been granted, assigned or otherwise received rights to any indemnification for any Liabilities of or with respect to the Business and to which Seller or any of its Affiliates continue to have rights to such indemnification as of the date of this Agreement; (xi) all other contracts and agreements, whether or not made in the ordinary course of business, which are material to the Business or the conduct of the Business, or the absence of which could, individually or in the aggregate, have a Material Adverse Effect; and -52- 58 (xii) each contract and agreement to which either of Metalsco or Skyliner is a party and not listed in (i) through (xi) above. For purposes of this Section 3.21, the term "lease" shall include any and all leases, subleases, sale/leaseback agreements or similar arrangements. (b) Except as set forth on Schedule 3.21(b), each Material Contract: (i) is valid and binding on such of Seller and its Affiliates as are parties thereto and, to the Knowledge of Seller, Metalsco, Skyliner and NSA, all other parties thereto, and is in full force and effect except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other Legal Requirement affecting creditors' rights generally and by other equitable principles, including, without limitation, those limiting the availability of specific performance, injunctive relief and other equitable remedies, (ii) in the case of any such Material Contract to which NSA is not a party, is freely and fully assignable to Purchaser or an Affiliate of Purchaser without penalty or other adverse consequences and (iii) upon consummation of the Contemplated Transactions shall continue in full force and effect without penalty or other adverse consequences. Neither Seller nor any of its Affiliates which is a party to any such Material Contract is in any respect in breach of, or default under, any Material Contract. (c) Except as set forth on Schedule 3.21(c), to the Knowledge of Seller and its Affiliates, no other party to any Material Contract is in any material respect in breach thereof or default thereunder. 3.22 Intellectual Property. (a) Schedule 3.22(a)(i) contains a true and complete list and a brief description of all Owned Intellectual Property, and Schedule 3.22(a)(ii) contains a true and complete list and a brief description of all Licensed Intellectual Property. Except as set forth on Schedule 3.22(a)(iii), neither Seller nor any of its Affiliates has received any claim or notice from any Person to the effect that the rights of Seller or any of its Affiliates in or to the Owned Intellectual Property or Licensed Intellectual Property conflict with or infringe on the rights of any other Person. -53- 59 (b) Except as set forth on Schedule 3.22(b): (i) all the Owned Intellectual Property is owned by Seller, free and clear of any Encumbrance except Permitted Encumbrances and (ii) no Actions have been made or asserted or are pending (nor, to the Knowledge of Seller, Metalsco, Skyliner and NSA, has any such Action been Threatened) against Seller or any of its Affiliates 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. To the Knowledge of Seller, Metalsco, Skyliner and NSA, no Person is using any patents, copyrights, trademarks, service marks, trade names, trade secrets or similar property that are confusingly similar to the Owned Intellectual Property or that infringe upon the Owned Intellectual Property or upon the rights of Seller therein. Except as set forth on Schedule 3.22(b), neither Seller nor any of its Affiliates has granted any license or other right to any other Person with respect to the Owned Intellectual Property. Except as set forth on Schedule 3.22(b), the consummation of the transactions contemplated by this Agreement and the Related Agreements will not result in the termination or impairment of any of the Owned Intellectual Property. (c) Seller has, or has caused to be, delivered to Purchaser correct and complete copies of all licenses and sublicenses for Licensed Intellectual Property set forth on Schedule 3.22(a)(ii) and any and all material ancillary documents pertaining thereto (including, but not limited to, all amendments, consents and evidence of commencement dates and expiration dates). With respect to each license and sublicense for Licensed Intellectual Property: (i) to the Knowledge of Seller, Metalsco, Skyliner and NSA, such license or sublicense, together with all material ancillary documents delivered pursuant to the first sentence of this Section 3.22(d), is legal, valid, binding, enforceable and in full force and effect, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other Legal Requirement affecting creditors' rights generally and by other equitable principles, including, without limitation, those limiting the availability of specific performance, injunctive relief and other equitable remedies, and represents the entire agreement between the respective licensor and licensee with respect to the subject matter of such license or sublicense; -54- 60 (ii) except as set forth on Schedule 3.22(a)(ii), (A) such license or sublicense is freely transferable to Purchaser and will not cease to be legal, valid, binding, enforceable and in full force and effect on terms identical to those currently in effect as a result of the consummation of the transactions contemplated by this Agreement and the Related Agreements, and (B) the consummation of the transactions contemplated by this Agreement or the Related Agreements will not constitute a breach or default under such license or sublicense or otherwise give the licensor or sublicensor a right to terminate such license or sublicense; (iii) except as set forth on Schedule 3.22(a)(ii), with respect to each such license or sublicense: (A) neither Seller nor any Affiliate of Seller has received any notice of cancellation or termination under such license or sublicense, (B) no licensor or sublicensor has any right of termination or cancellation under such license or sublicense except in connection with the default of Seller or any Affiliate of Seller party thereto thereunder, (C) neither Seller nor any Affiliate thereof that is a party to any such license or sublicense has received any notice of a breach or default under such license or sublicense, which breach or default has not been cured, and (D) neither Seller nor any Affiliate of Seller has granted to any other Person any rights, adverse or otherwise, under such license or sublicense; (iv) neither Seller or any of its Affiliates nor, to the Knowledge of Seller, Metalsco, Skyliner and NSA, any other party to such license or sublicense, is in breach or default, and, to the Knowledge of Seller, 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; (v) no Actions have been made or asserted or are pending (nor, to the Knowledge of Seller, Metalsco, Skyliner and NSA, has any such Action been threatened) against Seller or any Affiliate of Seller either (A) based upon or challenging or seeking to deny or restrict the use by the Business of any of the Licensed Intellectual Property or (B) alleging that any Licensed Intellectual Property is being licensed, -55- 61 sublicensed or used in violation of any patents or trademarks, or any other rights of any Person; and (vi) to the Knowledge of Seller, Metalsco, Skyliner and NSA, no Person is using any patents, copyrights, trademarks, service marks, trade names, trade secrets or similar property that are confusingly similar to the Licensed Intellectual Property or that infringe upon the Licensed Intellectual Property or upon the rights of Seller or any Affiliate of Seller therein. (d) Except as set forth on Schedule 3.22(d), all rights of Seller and its Affiliates in each item of Owned Intellectual Property or Licensed Intellectual Property owned by or licensed to Seller and its Affiliates are transferable to Purchaser as herein contemplated. As a result of the transactions contemplated hereby, upon the Closing, Purchaser shall own or possess, or own or possess adequate and enforceable licenses, sublicenses or other rights to use without payment of any fee other than fees listed on Schedule 3.22(d), all the Owned Intellectual Property or Licensed Intellectual Property. (e) The Owned Intellectual Property and the Licensed Intellectual Property constitutes all the Intellectual Property used or held or intended to be used in and necessary for the conduct of the Business. 3.23 Insurance. (a) Schedule 3.23(a) contains a list, and Seller has made available to Purchaser for its review true and complete copies, of: (i) all comprehensive general liability and other liability policies of insurance under which the Business, Seller or any of its Affiliates with respect to the Business or any of the Assets have been insured at any time within the seven (7) year period immediately preceding the date of this Agreement; (ii) all property and casualty policies of insurance under which the Business or Seller or any of its Affiliates with respect to the Business is presently insured; and -56- 62 (iii) all pending applications for policies of insurance of the Business or Seller or any of its Affiliates with respect to the Business. (b) The policies of insurance identified in clauses (i) and (ii) of Section 3.23(a) constitute all of the insurance policies under which the Business has been and is presently insured. (c) Schedule 3.23(c) contains a description of: (i) any Contract or arrangement, other than a policy of insurance, for the transfer or sharing of any risk by the Business or Seller or any of its Affiliates with respect to the Business; and (ii) all obligations of the Business or Seller or any of its Affiliates with respect to the Business to provide coverage to third parties pursuant to a Material Contract and identifies the policy under which such coverage is provided. (d) Schedule 3.23(d) contains details of the loss experience of the Business, and of Seller or any of its Affiliates with respect to the Business, with respect to the insurance and other coverage described in Sections 3.23(a) and (c) during the prior five years. 3.24 Environmental Matters. (a) Except as set forth on Schedule 3.24(a): (i) Seller and its Affiliates, including, without limitation, Metalsco, Skyliner and NSA, have been at all times during the last five (5) years and are in substantial compliance with all applicable Environmental Laws and all Environmental Permits related to the Business, the Real Property or the Unwanted Property. (ii) All noncompliance with Environmental Laws or Environmental Permits in respect of the Business or the Unwanted Property has been resolved without any material pending, ongoing or future obligation, cost or liability. -57- 63 (iii) There are no underground storage tanks in which Hazardous Materials are being or have been treated, stored or disposed on any of the Real Property. (iv) There are no aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which hazardous wastes as defined and regulated under the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq., as amended, are being or have been treated, stored or disposed on any of the Real Property. (v) Neither Seller nor any of its Affiliates has, and to the Knowledge of Seller, Metalsco, Skyliner and NSA, no other Person has, Released Hazardous Materials at, on or beneath any of the Real Property, the Closed Potliner Disposal Areas or any real property comprising part of the Unwanted Property and no Hazardous Materials are migrating to or from any of the Real Property, the Closed Potliner Disposal Areas or any real property comprising part of the Unwanted Property. (vi) None of Seller, Metalsco, Skyliner or NSA is conducting, and none of Seller, Metalsco, Skyliner or NSA has in the last five (5) years undertaken or completed, any Remedial Action relating to any Release or threatened Release at the Real Property, the Closed Potliner Disposal Areas or any real property comprising part of the Unwanted Property, or at any other off-site location in respect of the Business or the Unwanted Property, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law or Environmental Permit. (vii) There is no friable asbestos or asbestos-containing material on any of the Real Property. (viii) None of the Real Property, the Closed Potliner Disposal Areas or any real property comprising part of the Unwanted Property is listed or, to the Knowledge of Seller, Metalsco, Skyliner and NSA, has been proposed for listing on the National Priorities List under the federal Comprehensive Environmental Response, Compensation, and Liability Act or any analogous federal, state or local list. -58- 64 (ix) There are no Environmental Claims pending or, to the Knowledge of Seller, Metalsco, Skyliner and NSA, Threatened against (A) Seller or any of its Affiliates relating to the Business or the Unwanted Property, (B) the Business or (C) the Real Property, the Closed Potliner Disposal Areas or any real property comprising part of the Unwanted Property, and to the Knowledge of Seller, Metalsco, Skyliner and NSA, there are no circumstances that are reasonably expected to form the basis of any such Environmental Claims in respect of the Business or the Unwanted Property, including without limitation with respect to any off-site disposal location presently or formerly used by any of Seller or its Affiliates or any of their predecessors or with respect to any previously owned or operated facilities. (x) 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) Seller has provided Purchaser the opportunity to review copies of any non-privileged environmental assessment or audit reports or other material studies or analyses in its possession or control relating to the Business, the Unwanted Property, the Closed Potliner Disposal Areas or the Real Property (excluding routine in-house reporting, monitoring and correspondence) and no privileged environmental assessment or audit report or other material study or analysis relating to the Business, Unwanted Property, the Closed Potliner Disposal Areas or the Real Property, which Seller has not provided Purchaser the opportunity to review, relates to, identifies or otherwise discloses (i) any Environmental Matter which may be or become the subject of indemnification by Seller of Purchaser or any of its Affiliates pursuant to Section 11.2(a)(iii) or (viii) or (ii) any Liabilities not otherwise disclosed to Purchaser which may be incurred by Seller in connection with Environmental Matters in excess of those otherwise disclosed to Purchaser and which would be reasonably likely to impact Purchaser's assessment of Seller's indemnity and the Indemnity Support provided for herein. (c) Except for such notices, petitions and filings as may be required for the transfer of Environmental Permits to Purchaser or an Affiliate of Purchaser or, if such -59- 65 transfer is not permitted under applicable Law, for Purchaser or an Affiliate of Purchaser to obtain such Permits, neither the execution of this Agreement nor the consummation of the Contemplated Transactions 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: (i) Seller shall retain all Liabilities to the extent relating to or arising from the Unwanted Property, including without limitation Liabilities for Environmental Matters; (ii) Seller shall retain all Liabilities for Environmental Matters with respect to the Business conducted prior to the Closing Date; provided, however, (A) all Liabilities for Environmental Matters to the extent relating to or arising from any pre-Closing on-site disposal or Release of Hazardous Materials which is not Known as of the Closing Date shall be allocated between Seller and Purchaser in accordance with the provisions of Section 11.4; and (B) Seller shall have no Liability for any cleanup or remediation of or relating to any pre-Closing on-site disposal or Release of Hazardous Materials with respect to the Business to the extent such cleanup or remediation Liability arises as a result of (1) a change in any Environmental Law which takes effect after the Closing, (2) a change in the use of the Real Property or any portion thereof to anything other than industrial use, or (3) Purchaser's own activities such as excavation, construction, renovation or demolition in any area of the Real Property that is or has been capped (including capping by soil or existing structures) in connection with, or the use of which is restricted pursuant to, the Record of Decision or any other Environmental Matter with respect to the Real Property for which Seller is responsible under the terms of this Agreement. (e) Schedule 3.24(e) lists all Environmental Permits used or held in the conduct of the Business (other than such Environmental Permits the failure to have in effect would not reasonably be expected to give rise to Liabilities in excess of $25,000 in the -60- 66 aggregate), and none of Seller, Metalsco, Skyliner or NSA has allowed any Environmental Permit listed on Schedule 3.24(e) to lapse or terminate. (f) None of the off-site disposals of Hazardous Materials by Seller's Copper Division are related to or arise out of the Business, or any activities of Metalsco, Skyliner, NSA or any subsidiary thereof or any of the Unwanted Property. (g) There are no Known locations of pre-Closing off-site disposals of Hazardous Materials by Gaston Copper Recycling Corporation that are subject to a binding and enforceable indemnification agreement by AT&T Nassau Metals, Inc. in favor of Seller with respect to which AT&T Nassau Metals, Inc. has declined indemnification. 3.25 Employees. (a) Schedule 3.25(a) contains a true and complete list of the names of each Employee, together with such Employee's position or function, hire date, the rate of hourly, monthly or annual compensation (as the case may be) paid or to be paid to such Employee in 2000, any accrued sick leave or vacation and any incentive or bonus arrangement with respect to any such Employees. (b) Neither Southwire nor any of its Affiliates is a party to any Contract or other agreement with any labor union related to the Business. Except for proposals related to shift schedules and related matters, Southwire has not, since October 26, 1999, made any changes to its bargaining proposals to the Union. Other than the Strike, Southwire is not experiencing or the subject of or, to the Knowledge of Southwire, Metalsco, Skyliner and NSA, threatened by, any strike, slowdown, picketing, work stoppage, or other labor disturbance by any labor union or group of Employees. Schedule 3.25(b) contains a list of all Contracts (excluding Employee Benefit Plans and unwritten at-will employment arrangements) to which Southwire or any of its Affiliates is a party providing for a commitment of employment or consulting services or otherwise relating to employment, or the termination of employment or consultation services for a specified term in excess of six months or providing for payment of more than $50,000 in salary or severance in any one year to or by, any Employee, the name, position and rate of -61- 67 compensation of each Employee party to such a Contract and the expiration date of each such Contract. (c) Neither Southwire nor any of its Affiliates has any severance agreements (excluding Employee Benefit Plans) with any Employee other than as set forth on Schedule 3.25(c) attached hereto, and Purchaser shall not be responsible for any liability for severance payments to Employees of Southwire or any of its Affiliates who voluntarily incur a separation from service prior to the Closing Date. 3.26 Accounts, Lockboxes, Safe Deposit Boxes; Powers of Attorney. Except as set forth on Schedule 3.26(a), there are no bank accounts, lockboxes or safe deposit boxes maintained by Seller or any of its Affiliates in the name of Metalsco, Skyliner or NSA or otherwise with respect to the Business. As of the Closing Date, all customers of the Business and all other account parties from whom payments will be or become due to Metalsco, Skyliner or NSA or otherwise with respect to the Business shall be instructed not to make payment to Seller or any of its Affiliates or any account over which Seller or any of its Affiliates shall have control as of the Closing Date. Schedule 3.26(b) lists all Persons who have powers of attorney with respect to Metalsco, Skyliner, NSA or the Business and all such powers of attorney shall be terminated and shall be null and void as of the Closing Date. 3.27 Brokers or Finders. Neither Seller nor any of its Affiliates has incurred any obligation or Liability, contingent or otherwise, for brokerage or finders' fees or agents' commissions or other similar payments in connection with this Agreement or the Contemplated Transactions for which Purchaser will directly or indirectly have any Liability. 3.28 Representations and Warranties. No representation or warranty by Seller in this Section 3, including the schedules relating thereto, either (a) contains any untrue statement of a material fact or (b) omits to state a fact necessary to make such representation or warranty (giving full effect to any dollar, time or other limitation specified in, and only with respect to the subject matter contained in, such representation or warranty) not materially misleading; it being understood that this representation and warranty in this Section 3.28 is not intended to qualify any of the statements made in any of the other representations and warranties in this Section 3. The foregoing does not impose any obligation to disclose the implications of disclosed facts. -62- 68 3.29 Year 2000 Compliance. Seller conducted and completed in a timely manner a review and testing of all computer systems and software utilized in the conduct of the Business to ensure that all such systems and software, including the systems and software utilized by third parties with whom Seller or any of its Affiliates maintains system interfaces or otherwise has significant business relationships in the conduct of the Business, were capable of correctly processing, providing and reviewing data beyond the commencement of calendar year 2000 ("Year 2000 Compliant"). Except as listed on Schedule 3.29, all such systems and software were Year 2000 Compliant and as of the date hereof Seller has experienced no problems relating to Year 2000 compliance and affecting the Business and Seller has no reason to believe that any such problems shall occur in the future. 3.30 No Material Adverse Change. Except as set forth on Schedule 3.30, since the date of the Reference Balance Sheet, there has not occurred any event, circumstance or condition, other than (a) such events, circumstances or conditions which affect the aluminum industry generally and are generally known to the aluminum industry or (b) acts or omissions of Purchaser or its Affiliates, including relating to changes of NSA's ownership and/or management, which has had or could reasonably be expected to have a Material Adverse Effect. 4. REPRESENTATIONS AND WARRANTIES OF PURCHASER Purchaser represents and warrants to Southwire as follows: 4.1 Organization and Good Standing. Purchaser is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. 4.2 Authority; No Conflict. (a) This Agreement constitutes the legal, valid, and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other Legal Requirement affecting creditors' rights generally and by other equitable principles, including, without limitation, those limiting the availability of specific performance, injunctive relief and other equitable remedies. Upon the execution and delivery by Purchaser of the Related Agreements, such Related Agreements will constitute the legal, valid, and binding obligations of -63- 69 Purchaser, enforceable against Purchaser in accordance with their respective terms except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other Legal Requirement affecting creditors' rights generally and by other equitable principles, including, without limitation, those limiting the availability of specific performance, injunctive relief and other equitable remedies. Purchaser has full corporate power and authority to execute and deliver this Agreement and such Related Agreements and to perform its obligations under this Agreement and such Related Agreements. (b) Neither Purchaser's execution and delivery of this Agreement or the Related Agreements to which it is a party nor the consummation or performance by Purchaser of any of the Contemplated Transactions will give any Person the right, or ability, to prevent, delay or otherwise interfere with any of the Contemplated Transactions pursuant to: (i) any provision of the certificate of incorporation, bylaws or other organizational documents of Purchaser; (ii) any Legal Requirement or Order to which Purchaser may be subject; or (iii) any Contract to which Purchaser is a party or by which Purchaser may be bound. 4.3 Certain Actions. There is no pending Action that has been commenced against Purchaser that challenges, or may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the Contemplated Transactions. To the Knowledge of Purchaser, no such Action has been Threatened. 4.4 Brokers or Finders. Purchaser and its Representatives have incurred no obligation or Liability, contingent or otherwise, for brokerage or finders' fees or agents' commissions or other similar payments in connection with this Agreement or any of the Contemplated Transactions for which Southwire will directly or indirectly have any Liability. 4.5 Undisclosed Principals or Agencies. Purchaser intends to, and will, consummate the Contemplated Transactions for its own account, and Purchaser is not acting as -64- 70 an agent, broker, "straw-man" or other intermediary or Representative for any undisclosed Person. 4.6 Investment Representation. Purchaser is acquiring the shares as an investment and not with a view to, or for, sale or transfer in connection with any distribution thereof or for any sale or transfer thereof. 5. COVENANTS OF SOUTHWIRE 5.1 Access. (a) During the period commencing on the date of this Agreement and continuing through the Closing Date, Seller will (i) afford to Purchaser and its Representatives full and complete access to personnel, properties, contracts, books and records, and other documents and data, of Seller with respect to Metalsco, Skyliner, NSA and the Business and of Metalsco, Skyliner, NSA and the Business, which shall be done only during normal business hours of the Business, with reasonable prior notice to Seller and under the supervision of representatives of Seller (ii) furnish Purchaser and its Representatives with copies of all such contracts, books and records, and other similar documents and data as Purchaser may reasonably request, and (iii) furnish Purchaser and its Representatives with or permit Purchaser or its Representatives to obtain such additional financial, operating and other data and information with respect to the Business and the Unwanted Property as Purchaser may reasonably request. (b) Immediately prior to the Closing, Seller will perform a physical inspection, and shall invite Purchaser to be present and to verify such physical inspection, of all Inventories, and shall provide the results thereof to Purchaser for use in the preparation of the Closing Balance Sheet. (c) Purchaser acknowledges that the covenants of Seller set forth in this Section 5.1 are solely for the purposes of allowing Purchaser and its Representatives to (i) continue to familiarize itself with the Business and the Assets used in or in connection with the Business and the operation thereof and (ii) determine the accuracy of the representations and warranties of Seller set forth herein and in the Related Agreements; it being understood that the continuing examination provided for in this Section 5.1 shall not in any manner affect Seller's -65- 71 obligations hereunder with respect to the representations and warranties of Seller set forth in Section 3 and the covenants of Seller or the rights of Purchaser upon a breach thereof by Seller. (d) During any examination by Purchaser pursuant to the provisions of this Section 5.1, Purchaser shall not disrupt or adversely affect any aspect of the operations of the Business. Any and all rights of Purchaser pursuant to Section 5.1 shall be conditioned and contingent upon Purchaser's full and complete compliance with the confidentiality restrictions referred to in Section 12.3. 5.2 Notice of Developments. Prior to the Closing, the Seller 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 breach of a representation or warranty or covenant of the Seller in this Agreement or which have the effect of making any representation or warranty of the Seller in this Agreement, including the schedules thereto, untrue or incorrect, and (ii) all other developments materially affecting Metalsco, Skyliner, NSA, the Business, the Assets or the Unwanted Property. 5.3 Purchase of Uncollected Receivables. Seller shall purchase from Purchaser, Metalsco or NSA, and Purchaser, Metalsco or NSA, as the case may be, shall sell and assign, without recourse, to Seller all Receivables that are included as assets on the Closing Balance Sheet and that remain unpaid ninety (90) days following the Closing Date, and Seller shall pay Purchaser, Metalsco or NSA, as the case may be, as consideration for such unpaid Receivables the aggregate amount thereof outstanding and unpaid on such ninetieth (90th) day following the Closing Date plus interest thereon to the extent payable by the account debtor. 5.4 Financial Statements and Comfort Letter. Seller shall deliver to Purchaser (i) audited balance sheets of NSA as of December 31, 1998 and 1999, (ii) audited statements of income and cash flows of NSA for the years ended December 31, 1997, 1998 and 1999, and (iii) unaudited balance sheets and statements of income and cash flows of NSA as of and for the six months ended June 30, 1999 and 2000 (or, if required, nine months ended September 30, 1999 and 2000), as required to be included in the Offering Memorandum to be prepared by Century for the bond financing to be effected in connection with the Contemplated Transactions, no later than five (5) days after the date hereof (or, in the case of the unaudited financial statements as of -66- 72 and for the nine months ended September 30, 1999 and 2000, if required, as soon as reasonably practicable). All such financial statements shall be prepared in accordance with the financial disclosure requirements contained in the rules and regulations of the Securities and Exchange Commission. Seller shall use its best efforts to cause Seller's Accountants to (i) deliver, as soon as reasonably practicable and at Purchaser's expense, a comfort letter relating to the aforementioned financial statements and such other financial information derived therefrom included in the Offering Memorandum as is customary, and (ii) consent to being named as experts with respect to such audited financial statements. 5.5 Operation of the Business. Between the date of this Agreement and the Closing Date, unless otherwise agreed in writing by Purchaser, Seller will and will cause its Affiliates to: (a) except as otherwise allowed or required pursuant to the terms of this Agreement, conduct the Business in the ordinary course in a manner consistent with past practice, including without limitation continue their promotional activities and pricing and purchasing policies, not shorten or lengthen the customary payment cycles or otherwise change the material terms for any accounts payable or accounts receivable, continue to acquire, produce and maintain Inventory (including the mix thereof) and maintain in accordance with NSA's normal maintenance standards consistent with the past practices of the Business all equipment and machinery of whatsoever kind comprising a part of the Assets, which have (other than replacement parts or equipment) been used in the Business during the last twelve (12) months; (b) use commercially reasonable efforts to preserve intact its current business organization, keep available the services of the current officers, employees and agents of the Business, and maintain the relations and goodwill with all material suppliers, customers, trade creditors, employees, agents and others having a material business relationship with the Business; (c) exercise (but only after notice to and receipt of written approval from Purchaser) any rights of renewal pursuant to the terms of any of the leases or subleases set forth on Schedule 3.21(a) which by their terms would otherwise expire; (d) renew or apply for renewal of all material licenses and all Environmental Permits;(e) maintain in full force and effect the insurance described in Section 3.24(a) or insurance providing comparable coverage and all insurance currently maintained with respect to the Unwanted Property; (f) continue capital projects and make capital expenditures in connection with the Business, including without limitation those described on Schedule 3.7(b) and Schedule -67- 73 3.13(c); and (g) confer with Purchaser concerning any and all operational matters of a material nature relating to or otherwise affecting the Business. 5.6 Negative Covenants. (a) Except as otherwise expressly permitted by this Agreement, between the date of this Agreement and the Closing Date, Seller will not and will cause its Affiliates not to, without the prior written consent of Purchaser, (i) amend, modify or consent to the termination of any Material Contract or any rights of the Business thereunder; (ii) 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 Seller in this Agreement to be untrue or result in a breach of any covenant made by Seller in this Agreement; (iii) do any of the things enumerated in the second sentence of Section 3.11(a) hereof or (iv) take any affirmative action, or fail to take any commercially reasonable action within its control, the result of which could have a Material Adverse Effect. Between the date of this Agreement and the Closing Date,(x) neither Metalsco nor Skyliner shall engage in any activity other than, in the case of Metalsco, the holding of stock of Skyliner and partnership interests in NSA and, in the case of Skyliner, holding a limited partnership interest in NSA, (y) NSA shall not engage in any activities other than the Business, and (z) Metalsco shall not engage in or permit any activities relating to or involving the Unwanted Property except to distribute such Unwanted Property to Seller in accordance with Section 5.11. (b) Seller shall not, at any time following the Closing, undertake, directly or indirectly, any challenges to or seek any modifications of the environmental, zoning or other Permits pertaining to the operation of the Business in substantially the same manner as it is operated as of the Closing Date. Nothing herein shall preclude Seller from seeking environmental Permits pursuant to the Environmental Access and Cooperation Agreement or, subject to Section 6.4 hereof, undertaking any challenge to or seeking any modification of the Record of Decision or any consent decree or Order issued with respect thereto or with respect to other Environmental Matters relating to the Real Property for which Seller is responsible under the terms of this Agreement. At any time following the date hereof, neither Seller nor any of its Affiliates shall conduct any activities or dispose of or store any materials on, in or under the -68- 74 Closed Potliner Disposal Areas, except as may be required to comply with applicable Environmental Law. 5.7 No Negotiation. Until such time, if any, as this Agreement is terminated pursuant to Section 10, Seller will not, directly or indirectly, solicit, initiate, or encourage any inquiries or proposals from, discuss or negotiate with, or provide any nonpublic information to, any Person (other than Purchaser) relating to any transaction involving the sale of the Business or all, or substantially all or any material part of the property or assets of the Business, or any merger, consolidation, business combination, or similar transaction involving Seller or any portion of the Business. 5.8 Labor Matters. (a) Seller shall assist Purchaser in its efforts to retain the services of key Employees who shall be identified by Purchaser, subject in the case of Employees not employed exclusively in the Business to Seller's reasonable approval. (b) Seller has made no representations nor will it make any representations to any of the Employees concerning whether or not they will be employed by Purchaser, or whether seniority or years of service as employees of Seller or any of its Affiliates or any other factor will be a consideration with respect to Purchaser's hiring decision. (c) Seller shall retain any and all liabilities under the WARN Act relating to its sale of the Business and termination of Employees prior to the Closing and shall fulfill all obligations in accordance with such act, including without limitation providing written or other notices to affected Employees as required by the WARN Act and any other similar applicable state or federal Legal Requirement. Purchaser shall fulfill any applicable obligations under the WARN Act with respect to events which occur after the Closing. 5.9 Regulatory and Other Authorizations; Notices and Consents. (a) Seller will use its commercially reasonable efforts to obtain all authorizations, consents, orders, Environmental Permits and approvals of all Governmental Authorities and officials that may be or become necessary for its execution and delivery of, and -69- 75 the performance of its obligations pursuant to, this Agreement and the Related Agreements and will cooperate fully with Purchaser in promptly seeking to obtain all such authorizations, consents, orders and approvals. Seller shall make an appropriate filing, if necessary, pursuant to the HSR Act with respect to the transactions contemplated by this Agreement within ten (10) Business Days of the date hereof and 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. Seller shall promptly notify Purchaser 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 Purchaser to review in advance any proposed communication by such party to any Governmental Authority. (b) Seller shall give promptly such notices to third parties and use its commercially reasonable efforts to obtain such third party consents and estoppel certificates as 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 in connection with the transfer of the Material Contracts. (c) Seller agrees that, in the event any consent, approval or authorization necessary to preserve for the Business or Purchaser any right or benefit under any lease, license, contract, commitment or other agreement or arrangement to which the Seller or any of its Affiliates is a party is not obtained prior to the Closing, Seller will cooperate with Purchaser in attempting to obtain such consent, approval or authorization as promptly thereafter as practicable. If such consent, approval or authorization cannot be obtained, Seller will use its commercially reasonable efforts to provide 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 Seller provides such rights and benefits, Purchaser shall assume the obligations and burdens thereunder. 5.10 Non-Solicitation. From the date hereof until the Closing Date, Seller shall not solicit or make any offer of employment or otherwise offer any incentive to leave the employ of the Business to any Employee listed on Schedule 3.25(a) and, from and after the Closing Date -70- 76 for a period of two years, Seller shall not solicit or make any offer of employment or otherwise offer any incentive to leave the employ of Purchaser to any employee of Purchaser. 5.11 Unwanted Property. All of the Unwanted Property shall be duly and validly transferred by Metalsco or Skyliner, as the case may be, to Seller as provided in Section 2A.1 prior to the Closing without any Liability (including without limitation for any Taxes) to, or the need for further action by, Metalsco, Skyliner or NSA. 5.12 Consent Order. . Seller acknowledges responsibility for performing, at its sole expense, all remediation activities identified in the Record of Decision and any modifications thereof required by any Order issued with respect thereto, including, without limitation, any required rerouting of utilities or access ways to the Plant. Seller further acknowledges that it should be the sole party named on any such Order, and Seller shall use its commercially reasonable best efforts to ensure that neither Purchaser nor any Affiliate of Purchaser, including without limitation Metalsco, Skyliner or NSA, is included as a party and that NSA is not named as a division of Southwire on any such Order. In the event that, despite the commercially reasonable best efforts of Southwire, Purchaser or any Affiliate of Purchaser, including without limitation Metalsco, Skyliner or NSA, is included as a party on any such Order, Seller shall nonetheless continue to be responsible for all such remediation activities, and shall indemnify Purchaser and its Affiliates from and against any Loss actually suffered by Purchaser or its Affiliates in performing any requirement of such Order. 5.13 Supplementation and Correction of Information. Between the date of this Agreement and the Closing Date, Seller will use its best efforts to correct and supplement promptly the information set forth on the Schedules delivered by Seller pursuant to this Agreement in order to cause such Schedules to remain correct and complete in all material respects; provided, that Purchaser shall be entitled to a claim for indemnification pursuant to Section 11.2 with, respect to any breach of a representation or warranty reflected by any such connection or supplementation, and provided further that nothing in this Section 5.13 shall permit Seller to include in such corrections or supplements any references to facts, events or circumstances which, taken as a whole, individually or in the aggregate (x) reflect Liabilities of the Business in excess of One Million Dollars ($1,000,000), (y) result in, or may be reasonably -71- 77 likely to result in, Losses to the Business in excess of One Million Dollars ($1,000,000) or (z) may be reasonably likely to materially and adversely affect the ability of Purchaser or its Affiliates to conduct the Business, as presently conducted, on or after the Closing Date. 5.14 Transfer of Assets; Capital Expenditures. (a) Prior to the Closing Date, Seller shall duly and validly transfer to NSA title and all rights pertaining to the Additional Assets listed as items 1, 4, 5 and 6 on Schedule 1.1(a) hereto, and such Additional Assets shall constitute Assets for all purposes hereof as of the Closing Date. (b) Prior to the Closing Date, Seller shall use reasonable commercial efforts to complete (i) all of the following items listed on the NSA 2000 Capital Spending budget appearing as the last page of Attachment 8 to Schedule 3.7(a): Capital Requests Nos. 130 (Potline Five), 150 (Fume Control Equipment on Bake Furnace), 169 (Lithium Removal from Cruce Metal), 224 (Air Control Inlet Dampers), 238 (Replace Process Water Well # 2), and nos. 23 (Power Factor Correction for January 1, 2001 Contract Change) and 44 (Rebuild Number 1 Furnace in Casthouse, and (ii) the repair identified as item 3 (Pig caster) on Schedule 3.13(c). In the event that any such capital expenditure project or repair is not completed as of the Closing Date, then an accrual for any capital expenditure remaining to be made with respect thereto shall be reflected as a liability on the Closing Balance Sheet and taken into account in making the adjustment provided for in Section 2.5. (c) Notwithstanding anything to the contrary set forth in this Agreement, Seller shall be responsible for and shall pay when and as the same shall become due and payable (i) the up-front fee identified in paragraph 3) of the letter, dated July 26, 2000 from Big Rivers Electric Corporation to Mr. Tim Martin, National-Southwire Aluminum, attached hereto as Attachment 1 to Schedule 3.7(b), and (ii) any penalties or fines which may be payable in connection with Notices of Violation issued by the Environmental Protection Agency of the State of Kentucky with respect to the Business conducted prior to the Closing Date. -72- 78 6. COVENANTS OF PURCHASER 6.1 Regulatory and Other Authorizations; Notices and Consents. (a) Purchaser shall make an appropriate filing, if necessary, pursuant to the HSR Act with respect to the transactions contemplated by this Agreement within ten (10) Business Days of the date hereof and 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. Purchaser shall promptly notify Seller 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 Seller to review in advance any proposed communication by such party to any Governmental Authority. (b) Purchaser shall cooperate and use reasonable best efforts to assist the Seller in giving the notices and obtaining the consents and estoppel certificates referred to in Section 5.9(b); provided, however, that Purchaser shall have no obligation to give any guarantee or other consideration of any nature in connection with any such notice, consent or estoppel certificate or to consent to any change in the terms of any Material Contract which Purchaser may reasonably deem adverse to the interests of Purchaser or the Business. (c) Purchaser shall use its best efforts to negotiate the assumption by Purchaser of the Power Contract with the existing power supplier of the Plant by means of the execution and delivery of the Power Supply Agreements. 6.2 Labor Negotiations. From and after the date hereof, Purchaser shall, acting in good faith, use reasonable commercial efforts to reach agreement with the Union on the terms of a collective bargaining agreement (which agreement shall be satisfactory to Purchaser in its sole discretion) which shall be entered into by Purchaser with the Union as representative of the workers employed by Purchaser at the Plant, the effectiveness of which shall be a condition to the obligations of Purchaser hereunder, as set forth in Section 8.7, and to the obligations of Seller hereunder, as set forth in Section 9.6, and shall be contingent upon the Closing. Purchaser will keep Seller advised of its negotiations with the Union. -73- 79 6.3 Certain Tax Matters. The following provisions shall govern the allocation of responsibility as between Purchaser and the Seller for certain Tax matters following the Closing Date: (a) Returns and Payments. Purchaser shall prepare and file or otherwise furnish in proper form to the appropriate Governmental Body (or cause to be prepared and filed or so furnished) in a timely manner all Tax Returns of the Companies after the Closing Date that are due on or before (including extensions thereof) or relate to any taxable period ending on or before the Closing Date, and which have not been filed on or before the Closing Date. The Purchaser shall do the same for the Tax Returns of the Companies after the Closing Date with respect to any taxable period beginning before the Closing Date and ending after the Closing Date. With respect to any Tax Return required to be filed by the Purchaser with respect to the Companies, the Purchaser shall provide the Seller and its Representatives with a copy of such completed Tax Return and a statement certifying the amount of Tax shown on such Tax Return that is allocable to Seller pursuant to Section 6.3(b), together with appropriate supporting information and schedules at least fifty (50) days prior to the due date (including extensions) for the filing of such Tax Return, and the Seller shall pay to the Purchaser the amount of Tax shown on such Tax Return that is allocable to the Seller pursuant to Section 6.3(b) in immediately available funds in order that the Tax shown on such Tax Return will be timely paid. The Seller and its Representatives shall have the right to review and comment on such Tax Return and statement prior the filing of such Tax Return. The Seller 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 twenty (20) 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 (the "Accounting Firm") which is not the past or then current principal auditor of the Purchaser or the Seller to resolve any issue at least five (5) days before the due date of such Tax Return, in order that such Tax Return may be timely filed and the Tax shown on such Tax Return to be timely paid. The scope of the Accounting Firm's review shall be limited to the disputed items. The fees and disbursements of the Independent Accounting Firm shall be allocated between Seller and 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 -74- 80 determined by the Independent Accounting Firm) bears to the total amount of such disputed items so submitted. With respect to any Tax Return required to be filed by the Purchaser with respect to the Companies, the Purchaser shall provide the Seller and its Representatives with a statement certifying the amount of tax preparation fees paid by the Purchaser that is allocable to the Seller pursuant to Section 6.3(b), and the Seller shall pay to the Purchaser the amount of such tax preparation fees that is allocable to the Seller pursuant to Section 6.3(b) in immediately available funds within five (5) days of the receipt of such statement. (b) Tax Indemnity. Provided that the Purchaser or a member of the Purchaser Affiliated Group makes a written demand for indemnification against the Seller setting forth in reasonable detail the amount and the basis for such amount ("Written Demand"), Seller shall indemnify and hold the Purchaser harmless from and against all Taxes (including reasonable attorneys' and accountants' fees and other reasonable out-of-pocket expenses incurred in connection therewith) of the members of the Company Affiliated Group with respect to all Pre-Closing Periods (as defined below), to the extent such Taxes are not reflected in the reserve for Liability for Taxes (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) shown on the face of the Closing Balance Sheet, or to the extent the Seller has not paid to the Purchaser the amount of such Taxes pursuant to Section 6.3(a). Notwithstanding the foregoing sentence, if there is a good faith dispute arising out of the Written Demand, the Seller and the Purchaser agree to consult and resolve in good faith any dispute arising out of any such Written Demand. In the event the parties are unable to resolve any such dispute within twenty (20) days following the delivery of such Written Demand by the Purchaser to the Seller, the parties shall resolve their dispute by jointly requesting the Accounting Firm to resolve any issue. The scope of the Accounting Firm's review shall be limited to the disputed items. The parties agree to be bound by the determination of the Accounting Firm. The Accounting Firm shall make any such determination within twenty-five (25) days after submission of the dispute. The fees and disbursements of the Independent Accounting Firm shall be allocated between Seller and 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 disputed items so submitted. For purposes of this section, "Pre-Closing Period" shall mean all periods ending on or before the -75- 81 Closing Date, and with respect to periods beginning before the Closing Date and ending after the Closing Date, shall mean the portion of such period allocable to the Seller. For purposes of this Section, in the case of any Taxes that are imposed on a periodic basis and are payable for a taxable period that includes (but does not end on) the Closing Date, the portion of such Tax which relates to the portion of such taxable period ending on the Closing Date shall (x) in the case of any Taxes other than Taxes based upon or related to income or receipts, be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction the numerator of which is the number of calendar days in the taxable period ending on the Closing Date and the denominator of which is the number of calendar days in the entire taxable period, and (y) in the case of any Tax based upon or related to income or receipts be deemed equal to the amount which would be payable if the relevant taxable period ended on the Closing Date. Any credits relating to a taxable period that begins before and ends after the Closing Date shall be taken into account in accordance with Section 6.3(d) below. For purposes of this Section, with respect to any Tax Return that is due on or before (including extensions thereof) or relate to any taxable period ending on or before the Closing Date, all tax preparation fees (including reasonable attorneys' and accountants' fees and other reasonable out-of-pocket expenses incurred in connection therewith) paid by the Purchaser with respect to such Tax Return shall be allocable to the Seller. For purposes of this Section, with respect to any Tax Return that relates to any taxable period beginning before the Closing Date and ending after the Closing Date, the tax preparation fees (including reasonable attorneys' and accountants' fees and other reasonable out-of-pocket expenses incurred in connection therewith) allocable to the Seller shall be deemed to be the amount of such tax preparation fees (including reasonable attorneys' and accountants' fees and other reasonable out-of-pocket expenses incurred in connection therewith) multiplied by a fraction the numerator of which is the number of calendar days in the taxable period ending on the Closing Date and the denominator of which is the number of calendar days in the entire taxable period. (c) Time of Payment. The Seller shall make the indemnification payment for any amounts for which Purchaser makes a Written Demand pursuant to Section 6.2(b) within fifteen (15) days of the receipt of the Written Demand, provided, however, that if the Seller disputes any aspect of the Written Demand and such dispute is submitted to the Accounting Firm as provided in Section 6.2(b), then the Seller shall make the indemnification -76- 82 payment within five (5) days of receipt of the final determination by the Accounting Firm with respect to any disputes. (d) Tax Refunds and Credits. The Purchaser or any entity which has at any time been a member of an affiliated group within the meaning of Code Section 1504(a) which included within such group the Purchaser (such affiliated entities together with the Purchaser, collectively a "Purchaser Affiliated Group") 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 any member of the Purchaser Affiliated Group shall be required to pay with respect thereto, received or used, in the case of a credit or offset, by the Purchaser or any member of the Purchaser Affiliated Group 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 6.3 except to the extent such Tax refund, credit or offset is based on a net operating loss carryback within the meaning of Code Section 172), or (ii) attributable to any amount paid by the Sellers under Section 6.3. The amount of any refunds or credits or offsets (including any interest paid or credited with respect thereto) received by the Purchaser or any member of the Purchaser Affiliated Group shall be for the account of the Purchaser if (i) 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 6.3) or (ii) the refund, credit or offset is of Taxes relating to taxable periods or portions thereof ending on or before the Closing Date (including any Taxes allocated to such period under Section 6.3) to the extent such Tax refund, credit or offset is based on a net operating loss carryback within the meaning of Code Section 172. 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 Seller must consent to any such refund claim, which consent may not be unreasonably withheld. For purposes of the foregoing, withholding of consent shall be reasonable if such refund claim could reasonably be expected to have a material tax cost or otherwise result in a Material Adverse Effect on the Seller, provided however, that such refund claim will not reasonably be expected to have a material tax cost or other Material Adverse Effect on the Seller to the extent such refund claim is based on a net operating loss carryback within the meaning of Code Section 172. The -77- 83 Purchaser shall, if the Seller so requests and at the Seller's 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 Seller is entitled under Section 6.3; provided, however, that the Purchaser must consent to any such refund claim, which consent may not be unreasonably withheld. For purposes of the foregoing, withholding of consent shall be reasonable if such refund claim could reasonably be expected to have a material tax cost or otherwise result in a Material Adverse Effect to the Purchaser or a member of the Purchaser Affiliated Group, provided however, that such refund claim will not reasonably be expected to have a material tax cost or other Material Adverse Effect on the Seller to the extent such refund claim is based on a net operating loss carryback within the meaning of Code Section 172. (e) Allocation of Purchase Price to Shares and Additional Assets. Within sixty (60) days following the Closing Date, Purchaser shall deliver to Seller a proposed allocation of the purchase price (together with the Assumed Indebtedness and other capitalizable costs) to the Shares and the Additional Assets. If the Seller in good faith disagrees with the proposed allocation, the Seller and Purchaser will attempt in good faith to promptly agree on allocations. If the parties cannot resolve any such dispute within thirty (30) Business Days of the delivery of such allocations, the items remaining in dispute shall be submitted to the Accounting Firm. The Seller and Purchaser shall be bound by the allocation of such items as determined by the Accounting Firm. The Accounting Firm shall make any such determination within thirty (30) Business Days after submission of the remaining disputed items. (1) Purchaser and Seller agree to file all Tax Returns consistent with the allocations described in Section 6.3(e) and not to take any position inconsistent therewith for any Tax purpose. (2) The fees and disbursements of the Independent Accounting Firm shall be allocated between Seller and 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 disputed items so submitted. -78- 84 (3) If any of the allocations described in Section 6.3(e) are disputed by any Tax authority, the party receiving notice of such dispute shall promptly notify the other party of such dispute, and the Purchaser and Seller shall cooperate in good faith in responding to such challenge in order to preserve the effectiveness of such allocation. (f) Contests. After the Closing Date, the Seller 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 Seller, the Purchaser or any member of the Purchaser Affiliated Group which, if determined adversely to the taxpayer or after the lapse of time, would be grounds for indemnification by the other party under Section 6.3. Such notice shall contain factual information (to the extent known to the notifying party) describing the asserted Liability for Taxes in reasonable detail and shall include copies of any notice or other document received from any Tax authority in respect of any such asserted Liability for Taxes. If the indemnitee under Section 6.3 fails to give the indemnitor under Section 6.3 prompt notice of an asserted Liability for Taxes as required by this Section 6.3(f), then the indemnitor shall not have any obligation to indemnify for any loss arising out of such asserted Liability for Taxes but only to the extent that failure to give such notice results in a detriment to the indemnitor. (1) In the case of an audit or administrative or judicial proceeding that relates to periods ending on or before the Closing Date, the Seller shall have the sole right, at its 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 Seller has a potential indemnification obligation under Section 6.3; provided, however, that if the results of such contest could reasonably be expected to have a material Tax cost to the Purchaser or any member of the Purchaser Affiliated Group for any taxable period including or ending after the Closing Date, then the Seller and the Purchaser shall, each at its own expense, 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 -79- 85 party, which consent shall not be unreasonably withheld and, if the Seller does 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 Seller, which consent shall not be unreasonably withheld. If the Seller chooses to control the contest, the Purchaser shall promptly empower and shall cause the members of the Purchaser Affiliated Group or other party promptly to empower (by power of attorney and such other documentation as may be appropriate) such Representatives of the Seller as they may designate to represent the Purchaser or the members of the Purchaser Affiliated Group or other party or its successor in the contest insofar as the contest involves an asserted Liability for Taxes for which the Seller would be liable under Section 6.3. 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 6.3(f)(2) hereof, any Taxes allocated to such period under Section 6.3 or relating to taxable periods or portions thereof ending on or before the Closing Date provided the Taxes to which such contest relates are Taxes for which Seller is not liable under Section 6.3 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 result in a Material Adverse Effect to the Seller, then the Seller 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. (2) 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 -80- 86 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 Seller. (3) The Purchaser and the Seller agree to cooperate, and the Purchaser agrees to cause the members of the Purchaser Affiliated Group to cooperate, in the defense against or compromise of any claim in any audit or proceeding. (4) The Seller shall promptly notify the Purchaser of the commencement of any claim, audit, examination or other written change or adjustment received by the Seller, in each case relating to the members of the Company Affiliated Group, by any Tax authority which could reasonably be expected to affect the Liability of the Purchaser or the members of the Purchaser Affiliated Group for a material amount of Taxes, and the Seller shall keep the Purchaser informed of the progress thereof. The failure to provide such notice shall not affect the indemnification obligations under this Section 6.3 unless the indemnified party is materially prejudiced as a result of such failure. (g) Tax Sharing Agreements. All Tax sharing agreements or similar agreements with respect to or involving the Companies shall be terminated by Companies as of the Closing Date and, after the Closing Date, the Companies shall not be bound thereby or have any Liability thereunder and Seller should indemnify the Purchaser and the Purchaser Affiliated Group for any such Liability. (h) Certain Taxes. All transfer, documentary, sales, use, stamp, registration and other such similar taxes and fees (including any penalties and interest) incurred in connection with this Agreement, shall be paid and shared equally by the Seller and the Purchaser when due, and the Seller will, at its own expense, file all necessary Tax Returns and other documentation with respect to all such transfer, documentary, sales, use, stamp, registration -81- 87 and other such similar taxes and fees, and, if required by applicable law, Purchaser will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other documentation. (i) Cooperation and Exchange of Information. The Seller 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 shares and the Additional Assets, preparing and filing any Tax Return, amended Tax 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 Companies from the Purchaser. Such cooperation and information shall include providing copies of retained and relevant Tax Returns or portions thereof, together with accompanying schedules, related work papers and documents relating to rulings or other determinations by Tax authorities. The Seller shall make its employees available on a basis mutually convenient to both parties to provide explanations of any documents or information provided hereunder. Neither the Seller nor the Purchaser shall destroy, or cause the members of the Company Affiliated Group to destroy, any Tax Returns, schedules and work papers, records and other documents in its possession relating to Tax matters of the members of the Company Affiliated Group for each taxable period first ending after the Closing Date and for all prior taxable periods until the later of (i) six months after the expiration of the statute of limitations of the taxable periods to which such Tax Returns and other documents relate, including extensions, or (ii) six years following the due date (including extensions) for such Tax Returns. Any information obtained under this Section 6.3(i) shall be kept confidential except as may be otherwise necessary in connection with the filing of Tax Returns or claims for refund or in conducting an audit or other proceeding. (j) Adjustment to Purchase Price. The Seller and the Purchaser agree to treat all payments made under this Section 6.3 as adjustments to the purchase price for Tax purposes and that such treatment shall govern for purposes hereof. (k) Survival. The covenants and obligations of parties under this Section 6.3, and the representations and warranties of the Seller in Section 3.17, shall survive the Closing and shall remain in full force and effect until the expiration of all statutes of limitations -82- 88 on assessment or collection of Tax plus sixty (60) days with respect to any Taxes that would be indemnifiable by the Seller under this Agreement. (l) Tax Elections. From and after the date of this Agreement, the Seller shall not without prior written consent of the Purchaser (which consent may not be unreasonably withheld) make, 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. 6.4 Environmental Cooperation and Access. From and after the Closing Date, Purchaser will cooperate with Seller with respect to Seller's obligations with respect to Environmental Matters related to the Real Property or the Closed Potliner Disposal Areas, including but not limited to the Record of Decision and any consent decree or Order issued with respect thereto; provided that each of Seller and Purchaser shall use reasonable commercial efforts to ensure that (i) the performance by Seller of its obligations with respect to Environmental Matters related to the Real Property or the Closed Potliner Disposal Areas, including but not limited to the Record of Decision and any consent decree or Order issued with respect thereto and Purchaser's cooperation therewith shall not unduly interfere with the operation of the Plant and the conduct of the Business; and (ii) the operation of the Plant and the conduct of the Business shall not unduly interfere with the performance by Seller of its obligations with respect to Environmental Matters related to the Real Property or the Closed Potliner Disposal Areas, including but not limited to the Record of Decision and any consent decree or Order issued with respect thereto. To effect the foregoing, Purchaser and Seller shall enter into the Environmental Access and Cooperation Agreement pursuant to which Purchaser shall agree to provide Seller and its authorized agents access to, and certain rights with respect to, portions of the Real Property as may be reasonably necessary to enable Seller to carry out its obligations with respect to Environmental Matters related to the Real Property or the Closed Potliner Disposal Areas, including but not limited to the Record of Decision and any consent decree or Order issued pursuant to the Record of Decision. -83- 89 6.5 Non-Solicitation. From and after the Closing Date, Purchaser shall not solicit or make any offer of employment or otherwise offer any incentive to leave the employ of Seller to any employee of Seller. 6.6 Financing. Purchaser covenants and agrees to use good faith efforts to obtain financing sufficient in amount, when taken together with capital funds otherwise available to Purchaser, to enable Purchaser to consummate the Contemplated Transactions on the terms provided for herein. 6.7 Post-Closing Actions. (a) Purchaser agrees that, following the Closing Date, it shall not solicit or importune, and will not cause or permit any Affiliate of Purchaser to solicit or importune, any Governmental Body to require or perform any investigation, Remedial Action, correction of noncompliance or other action relating to any Environmental Matter relating to the Real Property unless required by any Environmental Law, Governmental Body, Order or third party settlement agreement. (b) Purchaser agrees to cooperate with Seller post-Closing to provide reasonable access to Employees to the extent reasonably required by Seller in connection with its efforts to recover on or resolve any claims by or against Seller or any of its Affiliates in any litigation or administrative or regulatory proceedings which arose out of or related to the Business prior to Closing. 6.8 Power Agreements. Purchaser shall use good faith efforts to satisfy any conditions required by any Power Suppliers to be satisfied by Purchaser or any Affiliate of Purchaser in order to permit the condition to Seller's obligations set forth in Section 9.3 to be fully satisfied. 6.9 Notice of Developments. In the event that any event, circumstance, fact or occurrence shall become Known to Purchaser prior to the Closing, which event, circumstance fact or occurrence results in a breach of a representation or warranty of Seller in this Agreement in any material respect or which has the effect of making any representation or warranty of the Seller in this Agreement, including the Schedules thereto, untrue or incorrect in any material -84- 90 respect, Purchaser shall use reasonable commercial efforts to notify Seller thereof prior to Closing. 6.10 Collection of Receivables. Purchaser shall use its commercially reasonable efforts to collect all Receivables included as assets on the Closing Balance Sheet. Following the Closing, payments received from account debtors with respect to Receivables shall first be applied to specific invoices when the account debtor provides invoice advice. When the account debtor provides no such advice, payments shall be applied to the oldest outstanding invoices to such account debtor that have not previously been paid and are not then in dispute. 7. EMPLOYEE MATTERS 7.1 Employees. (a) Hourly Employees. Effective upon Closing, Purchaser will offer employment to all hourly Employees other than those hourly Employees who have informed NSA or Seller that they will not return to NSA upon the expiration of any applicable leave. Such employment will be on terms and conditions acceptable to Purchaser and agreed to with the Union. (b) Salaried Employees. Effective upon Closing, Purchaser shall offer or cause to be offered employment as of the Closing Date to salaried Employees on substantially the same terms, in the aggregate, as such Employees were employed by NSA or any NSA Affiliate on the date of Closing. All salaried Employees accepting Purchaser's offer of employment are referred to herein as "Hired Salaried Employees." Purchaser shall recognize or cause to be recognized a Hired Salaried Employee's length of service with NSA or an NSA Affiliate for eligibility and vesting, but not benefit calculation, purposes under Purchaser's or its Affiliate's employee benefit programs and for purposes of entitlement to receive vacation days, sick days and holiday pay to the extent accrued and reflected on the Closing Balance Sheet, in accordance with the policies of Purchaser. Purchaser shall allow all Hired Salaried Employees to take any accrued but unused vacation days and sick days under policies of NSA or an NSA Affiliate for the calendar year in which the Closing Date occurs. For purposes of deductible limits and out-of-pocket annual maximums under their welfare plans in the year in which the -85- 91 Closing occurs, Purchaser or its Affiliate shall credit each Hired Salaried Employee with any actual applicable deductibles satisfied and amounts paid toward out-of-pocket annual maximums under the same type of benefit plan in which such Hired Salaried Employee was participating on the date of this Agreement. (c) Salaries and Wages; Other Liabilities. Southwire shall be responsible for paying all salaries and wages for all Employees for the time period ending at 7:00 p.m. CST on the Closing Date (the "Effective Time") and all bonuses and benefits payable to any Employees on or prior to the Effective Time, together with all withholdings required by federal, state or local law with respect to such salaries, wages and benefits. Southwire shall be responsible for paying all post-retirement benefits of retired Employees who have retired or who retire prior to or on the Closing Date. Seller shall retain all liabilities relating to the agreements identified on Schedules 3.25(b) and (c). In addition, it is the intent of the parties that all Hired Employees who retire at any time after the Closing Date shall receive all benefits to which they may be entitled as of the Closing Date under any pre-existing annuity contract, and that such annuity contracts shall not be the responsibility of Purchaser. Purchaser shall be responsible for paying (i) all bonuses of all Hired Employees for the period from January 1, 2000 until the Effective Time that become payable after the Effective Time but only to the extent the same are accrued and reflected on the Closing Balance Sheet, (ii) all bonuses but not contributions to 401(k) Plans for periods prior to the Effective Time of all Hired Employees accruing from and after the Effective Time for the year ending December 31, 2000 whether or not accrued or reflected on the Closing Balance Sheet, (iii) all costs and liabilities for holiday pay and vacation time for the Hired Employees for service during periods after the Effective Time, and (iv) holiday pay and vacation time for Hired Employees for periods occurring prior to the Effective Time that become payable after the Effective Time but only to the extent accrued or reflected in the Closing Balance Sheet. 7.2 Employee Benefit Plans. Effective as of the Closing Date, Hired Employees shall cease to be eligible to actively participate in the Southwire Company Profit Sharing and Retirement Plan and Trust (the "Southwire 401(k) Plan"). Effective as of the Closing Date, Purchaser shall establish or make available a defined contribution plan for Hired Employees ("Purchaser's Defined Contribution Plan"). Purchaser shall credit Hired Employees -86- 92 for their period of service with NSA or NSA Affiliate for purposes of eligibility and vesting under the Purchaser's Defined Contribution Plan. If the consummation of the transactions contemplated by this Agreement does not constitute a distribution event under the Southwire 401(k) Plan for a Hired Employee, then, within a reasonable period of time after the Closing Date, Southwire shall cause and Purchaser shall agree to accept a transfer from the Southwire 401(k) Plan to Purchaser's Defined Contribution Plan of an amount equal to the aggregate account balances held under the Southwire 401(k) Plan for Hired Employees. Such transfer of assets shall comply with the applicable requirements of the Code and ERISA. In addition, as part of such transfer, Purchaser's Defined Contribution Plan shall accept any promissory notes that are outstanding as of the Closing Date with respect to any Hired Employee who has taken a participant loan from the Southwire 401(k) Plan. 7.3 Medical Coverage. No Hired Employee (or eligible dependent thereof) who is eligible and who elects to be covered under any medical or disability insurance plan of Purchaser or its Affiliate shall be excluded from coverage under such plan on the basis of a pre-existing condition that was not also excluded under the applicable Southwire or NSA medical or disability insurance plan. To the extent that a Hired Employee has satisfied in whole or in part any annual deductible or paid any out-of-pocket or co-payment expenses under a medical insurance plan of Southwire or NSA for a plan year, such individual shall be credited therefor under the corresponding provisions of the corresponding plan of Purchaser or its Affiliate in which such individual participates after the Closing Date. 8. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE The obligation of Purchaser to pay the Purchase Price and to take the other actions required to be taken by Purchaser at the Closing to consummate the Contemplated Transactions is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Purchaser, in whole or in part): 8.1 Accuracy of Representations. All of the representations and warranties of Southwire set forth in this Agreement shall have been accurate in all respects as of the date of this Agreement, and shall be accurate in all material respects as of the Closing Date as if made on the Closing Date; provided that for purposes of this Section 8.1, if any such representation -87- 93 and warranty of Seller includes within its terms a materiality qualifier such qualifier shall be disregarded solely for purposes of determining compliance with this condition as of the Closing Date, and provided further that a material breach of an immaterial representation of Seller shall not be deemed to give rise to a failure of the condition set forth in this Section 8.1 (but shall not limit Seller's indemnification obligations under Section 11.2 below). 8.2 Seller's Performance. (a) All of the covenants and obligations that Southwire is required to perform or to comply with pursuant to this Agreement at or prior to the Closing shall have been duly performed and complied with in all material respects. (b) Southwire shall have delivered, or caused the delivery of, each of the documents required to be delivered by Southwire pursuant to Section 2.3(a). (c) Southwire shall have executed and delivered each of the Related Agreements pursuant to Section 2.3(a). (d) Purchaser shall have received the resignations, effective as of the Closing, of all directors and officers of Metalsco, Skyliner and NSA. (e) Purchaser shall have received the minute books and stock register of Metalsco, certified by the Secretary or Assistant Secretary of Metalsco, as of the Closing, the minute books and stock register of Skyliner, certified by the Secretary or Assistant Secretary of Skyliner, as of the Closing, and the partnership records of NSA, certified by a duly authorized representative of NSA, as of the Closing. (f) Purchaser shall have received good standing certificates for Metalsco, Skyliner and NSA 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 properties owned or leased by Metalsco, Skyliner or NSA, respectively, or the operation of its business in such jurisdiction, requires it to qualify to do business as a foreign corporation, except those states where the failure to be so licensed or qualified would not have a Material Adverse -88- 94 Effect, in each case dated as of a date not earlier than ten (10) Business Days prior to the Closing Date . (g) Purchaser shall have received a true and complete copy, certified by the Secretary or an Assistant Secretary of Seller of the resolutions duly and validly adopted by the Board of Directors of Seller evidencing its authorization of the execution and delivery of this Agreement and the Related Agreements and the consummation of the Contemplated Transactions. 8.3 Clear Title to Shares. Seller shall be the sole and exclusive owner of, and have good and valid title to the Shares, free and clear of all Encumbrances, charges or defects of title of any nature whatsoever. 8.4 Consents. Each of the Consents identified in Schedule 3.3(c) shall have been obtained and be in full force and effect. 8.5 Financing. Purchaser shall have obtained financing for the Contemplated Transactions on terms and conditions satisfactory to Purchaser in its sole discretion. 8.6 No Actions. Since the date of this Agreement, there shall not have been commenced or Threatened any Action (a) involving any challenge to, or seeking damages or other relief in connection with, any of the Contemplated Transactions, or (b) that would have the effect of preventing, materially delaying, making illegal, or otherwise materially interfering with any of the Contemplated Transactions. 8.7 Collective Bargaining Agreement; Labor Matters. (a) Purchaser shall have entered into a collective bargaining agreement with the Union, approved by the Union's International officers, setting forth the terms and conditions of the employment by Purchaser of hourly employees at the Plant from and after the Closing Date and a release of Seller from all liability, which agreement shall be satisfactory to Purchaser in its sole discretion and the effectiveness of which shall be contingent upon the occurrence of the Closing, and such agreement shall have been ratified by the local chapter of the Union. -89- 95 (b) On the Closing Date, there shall be no labor union strikes or significant labor disputes in progress or threatened with respect to the Plant or the Business, and no request for, lawsuit seeking or Order granting, relief under Section 10(j) of the NLRA shall be pending before the NLRB or any court. Purchaser shall have no liability for any claims, including back pay, with respect to the Union or its represented Employees arising out of events occurring prior to the Closing including without limitation any Liabilities arising out of the NLRB Litigation. 8.8 No Material Adverse Change. During the period from the date hereof through the Closing Date, there shall not have occurred any event or circumstance that has resulted or is likely to result in a Material Adverse Effect. 8.9 HSR Act. All necessary waiting periods (and any extensions thereof) under the HSR Act applicable to the Contemplated Transactions shall have expired or been earlier terminated. 8.10 Survey. Purchaser shall have received, at least ten (10) days prior to the Closing, at Seller's sole cost and expense, an "as-built" survey or surveys of the Real Property reasonably satisfactory to Purchaser, certified to Purchaser and the Chicago Title Insurance Company by a licensed surveyor approved by Purchaser, dated or updated not earlier than sixty (60) days prior to the Closing, complying with the 1997 edition of the ALTA and ASCM Minimum Standard Detail Requirements for Land Title Surveys, including Table A items set forth on Schedule 8.10 and showing those easements contemplated in Section 8.11. 8.11 Easements. Seller, at its sole cost and expense, shall have executed, acknowledged and recorded each of the easements, in a form approved by Purchaser, as shall be necessary for Purchaser to operate the Business (including but not limited to those easements described on Schedule 8.11). 8.12 Environmental Permits. All Environmental Permits required for Purchaser, as the new owner of the Shares and the assets, to conduct the Business as of the Closing Date shall be in full force and effect except (i) as would not be reasonably likely to have, -90- 96 individually or in the aggregate, a Material Adverse Effect, and (ii) as would not materially and adversely affect Purchaser's ability to operate the Business. 8.13 Liens. Seller and its Affiliates shall have satisfied in full and caused the release of all mechanics' liens on any of the Real Property or other Assets, to the fullest extent required by law, and there shall be no exceptions to ownership of any of the Assets existing on and as of the Closing Date, including those listed on Schedule 3.13 which have not been removed, satisfied or bonded over to Purchaser or an Affiliate of Purchaser to the reasonable satisfaction of Purchaser. 9. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE The obligation of Seller to take the actions required to be taken by Seller at the Closing to consummate the Contemplated Transactions is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Seller, in whole or in part): 9.1 Accuracy of Representations. All of the representations and warranties of Purchaser in this Agreement shall have been accurate in all material respects as of the date of this Agreement and shall be accurate in all material respects as of the Closing Date as if made on the Closing Date. 9.2 Purchaser's Performance. (a) All of the covenants and obligations that Purchaser is required to perform or to comply with pursuant to this Agreement at or prior to the Closing, shall have been performed and complied with in all material respects. (b) Purchaser shall have delivered, or caused the delivery of, each of the documents or other items required to be delivered by Purchaser pursuant to Section 2.5(b) including, without limitation, the delivery of the payment required to be made by Purchaser to Southwire pursuant to Section 2.5(c)(i). (c) Purchaser shall have executed and delivered each of the Related Agreements. -91- 97 9.3 Assumption of Power Contract. The Power Supply Agreements shall have been executed and shall be in full force and effect and Purchaser shall have used its commercially reasonable best efforts to have Seller released from its obligations relating to periods after the Closing Date under the Power Contract. 9.4 No Actions. Since the date of this Agreement, there shall not have been commenced or Threatened any Action (a) involving any challenge to, or seeking damages or other relief in connection with, any of the Contemplated Transactions, or (b) that would have the effect of preventing, materially delaying, making illegal, or otherwise materially interfering with any of the Contemplated Transactions. 9.5 HSR Act. All necessary waiting periods (and any extensions thereof) under the HSR Act applicable to the Contemplated Transactions shall have expired or been earlier terminated. 9.6 Labor. Purchaser shall (a) have reached agreement with the Union releasing Seller from all Liability for back pay with respect to the Union or its represented employees of the Business relating to or arising out of events occurring prior to the Closing, including without limitation any Liabilities arising out of the NLRB Litigation, and (b) have obtained from the Union a voluntary dismissal, with prejudice, of all unfair labor practice matters pending as of the Closing Date. 9.7 Easements. Purchaser, at Purchaser's sole cost and expense, shall have executed, acknowledged and recorded such easements, in a form approved by Seller, as shall be necessary for Seller to operate Seller's wire and cable mill adjacent to the Plant (including but not limited to those easements described on Schedule 9.7), and Purchaser shall have granted Seller such rights to portions of the Real Property as set forth in the Environmental Access and Cooperation Agreement to perform the remedial activities contemplated by the Record of Decision or as may otherwise by required by any Governmental Body with respect thereto. 10. TERMINATION 10.1 Termination Events. This Agreement may, by written notice given prior to or at the Closing, be terminated: -92- 98 (a) by Purchaser, if a material breach of any of the representations, warranties or covenants of Seller set forth in this Agreement has been committed by Seller and such breach has not been waived by Purchaser or cured by Seller within ten (10) days after its receipt of written notice thereof from Purchaser; (b) by Seller, if a material breach of any of the representations, warranties, or covenants of Purchaser set forth in this Agreement has been committed by Purchaser and such breach has not been waived by Seller or cured by Purchaser within ten (10) days after its receipt of written notice thereof from Seller; (c) by Purchaser, if, in Purchaser's sole discretion, any of the conditions in Section 8 has not been satisfied as of the Closing Date or if satisfaction of such a condition is or becomes impractical (other than through the failure of Purchaser or Purchaser's Affiliates to comply with their obligations under this Agreement) and Purchaser has not waived such condition on or before the Closing Date; (d) by Seller, if, in Seller's sole discretion, any of the conditions in Section 9 has not been satisfied as of the Closing Date or if satisfaction of such a condition is or becomes impractical (other than through the failure of Seller or Seller's Affiliates to comply with their obligations under this Agreement) and Seller has not waived such condition on or before the Closing Date; (e) by mutual consent of Purchaser and Seller; or (f) by either Purchaser or Seller, if the Closing has not occurred (other than through the failure of any party seeking to terminate this Agreement to comply fully with its obligations under this Agreement) on or before the date which is ninety (90) calendar days from the date hereof; provided that such date shall be extended until the date which is ten (10) Business Days following the date of receipt of final HSR Act approval in the event of any extensions required to comply with issues arising under the HSR Act, if later. 10.2 Effect of Termination. If this Agreement is terminated pursuant to Sections 10.1(a), (b), (c), (d) or (f) such termination shall not affect any rights or remedies of the parties, respectively, arising out of such termination or the facts or circumstances giving rise -93- 99 thereto. If this Agreement is terminated pursuant to Section 10.1(e) all parties shall be released, effective upon such termination, from all obligations hereunder, and neither party shall have any remedy against the other arising out of such termination. The obligation of a party to treat as confidential any information of or relating to another party hereto shall survive any termination of this Agreement and shall not be extinguished thereby. 11. INDEMNIFICATION 11.1 Survival of Representations and Warranties; Claims. The representations and warranties of Purchaser and Seller contained in this Agreement shall survive the Closing until the third anniversary thereof; provided, however, that (a) the representations and warranties of Seller dealing with Tax matters shall survive as provided in Section 6.3, (b) the representations and warranties of Seller contained herein relating to Environmental Matters shall survive the Closing indefinitely, except that to the extent such representations and warranties relate to on-site conditions not Known to Seller at Closing, then as to such on-site conditions not Known to Seller at Closing such representations and warranties shall survive the Closing until the sixth anniversary thereof and the Liabilities relating to or arising out of such on-site conditions not Known to Seller at Closing shall be allocated between Seller and Purchaser in accordance with the provisions of Section 11.4, and (c) the representations and warranties of Seller contained herein relating to Unwanted Property shall survive the Closing indefinitely. Neither the period of survival nor the liability of Seller with respect to Seller's representations and warranties shall be reduced by any investigation, whether pursuant to Section 5.1 or otherwise, made at any time by or on behalf of Purchaser. If written notice of a claim for indemnification hereunder has been given in good faith by a party prior to the expiration of the applicable period of survival of the representations and warranties on which such claim is based, then the relevant representations and warranties shall survive as to such claim until the claim has been finally resolved. 11.2 Indemnification by Seller. (a) Subject to Sections 11.1, 11.5 and 11.8, Seller shall indemnify, defend and hold harmless Purchaser and its Affiliates (including, following the Closing Date, Metalsco, Skyliner and NSA) and its and their 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 -94- 100 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") arising out of or resulting from: (i) the breach of any representation or warranty made by Seller contained in this Agreement (other than in respect of (x) Section 3.17 and certain amounts indemnified against under Section 6.3, it being understood that the rights and obligations of the parties with respect to indemnification for any and all Tax matters (including the breach of any representation or warranty contained in Section 3.17) shall be governed by Section 6.3; (y) Section 3.24, it being understood that the rights of the Purchaser Indemnified Parties with respect to indemnification for Environmental Matters (including the breach of any representations or warranties contained in Section 3.24) shall be governed by Section 11.2(a)(iii) and Section 11.4; and (z) Sections 3.8 and 3.9, it being the intention of the parties following the adjustment of the Purchase Price contemplated by Section 2.5 that no further claims shall be made with respect to the breach of any representation or warranty contained in such sections); or (ii) the breach of any covenant or agreement by Seller contained in this Agreement (other than Section 6.3, it being understood that the rights and obligations of the parties with respect to indemnification for any and all Tax matters (including the breach of any covenant or agreement of Seller relating to Taxes set forth herein) shall be governed by Section 6.3); or (iii) Environmental Matters to the extent relating to: (A) the Unwanted Property and all other businesses or Properties engaged in or operated by Seller or any of its Affiliates other than the Business and the Real Property, or (B) the Business conducted prior to the Closing Date, provided, however, (1) Seller shall only be required to indemnify any Purchaser Indemnified Party for Liabilities for Environmental Matters relating to or arising from any pre-Closing on-site disposal or Release of Hazardous Materials which is not Known to Seller as of the Closing Date to the extent provided for in Section -95- 101 11.4, and (2) Seller shall not be required to indemnify any Purchaser Indemnified Party for any Liability for any cleanup or remediation of or relating to any pre-Closing on-site disposal or Release of Hazardous Materials with respect to the Business to the extent such cleanup or remediation Liability arises as a result of (x) a change in any Environmental Law which takes effect after the Closing, (y) a change in the use of the Real Property or any portion thereof to anything other than industrial use or (z) Purchaser's own activities such as excavation, construction, renovation or demolition in any area of the Real Property that is or has been capped (including capping by soil or existing structures) in connection with, or the use of which is restricted pursuant to, the Record of Decision or any other Environmental Matter with respect to the Real Property for which Seller is responsible under the terms of this Agreement; or (iv) Liabilities relating to or arising from employee claims as of the Closing Date, including without limitation those described in items 3 through 9 on Schedule 3.20; provided, however, Seller shall not be required to indemnify any Purchaser Indemnified Party with respect to bonuses, costs and liabilities to be paid by Purchaser as provided in Section 7.1(c); or (v) Liabilities relating to the Employee Benefit Plans maintained prior to the Closing Date by Seller; 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) 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 Business on or prior to the Closing Date; or -96- 102 (viii) Liabilities of Seller and its Affiliates, including Metalsco, Skyliner and NSA, related to the Unwanted Property; or (ix) Liabilities arising from or related to indemnification obligations of Seller and its Affiliates as contained in Leases as referred to in instruments recorded in Deed Book 107, pages 473 and 479, of said records (including the Lease recorded in Deed Book 73, page 307). provided, however, in no event shall "Loss" include lost profits or other incidental or consequential damages unless recovered by a third party from the Person seeking indemnification hereunder. (b) To the extent that Seller's undertakings set forth in this Section 11.2 may be unenforceable under applicable law, Seller shall contribute the maximum amount that it is permitted to contribute under applicable Legal Requirement to the payment and satisfaction of all Losses incurred by a Purchaser Indemnified Party. 11.3 Indemnification by Purchaser. (a) Subject to Section 11.1, Purchaser shall indemnify, defend and hold harmless Seller and its Affiliates, 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 Purchaser contained in this Agreement; or (ii) the breach of any covenant or agreement by Purchaser contained in this Agreement; or (iii) Liabilities resulting in Section 11.4 Losses (as hereinafter defined), to the extent such Section 11.4 Losses are allocated to Purchaser in accordance with Section 11.4; or -97- 103 (iv) any liabilities or obligations resulting from or arising out of the conduct of the Business after the Closing Date, except for any liabilities or obligations with respect to which Seller is obligated to indemnify a Purchaser Indemnified Party; or (v) the Assumed Indebtedness and the Assumed Liabilities. (b) To the extent that Purchaser's undertakings set forth in this Section 11.3 may be unenforceable, Purchaser shall contribute the maximum amount that it is permitted to contribute under applicable Legal Requirement to the payment and satisfaction of all Losses incurred by a Seller Indemnified Party. 11.4 Allocation of Certain Losses. To the extent that Liabilities under Environmental Laws relate to or arise from any on-site disposal or Release of Hazardous Materials which occurred prior to the Closing and which is not Known to Seller as of the Closing Date, indemnification for Losses arising out of or resulting from such Liabilities (each a "Section 11.4 Loss") shall be allocated between Seller and Purchaser as set forth in the following paragraph; it being agreed by Seller and Purchaser that, in the case of a dispute with respect to any Liabilities under Environmental Laws that relate to or arise from any on-site disposal or Release of Hazardous Materials, as to whether the on-site disposal or Release occurred (a) prior to the Closing or (b) post-Closing, it shall be a presumption in such dispute, rebuttable by Seller, that any such disposal or Release occurred prior to the Closing, if such disposal or Release becomes Known during the period from the Closing Date through the day prior to the third anniversary of the Closing Date, and it shall be a presumption in such dispute, rebuttable by Purchaser, that any such disposal or Release occurred post-Closing, if such disposal or Release becomes Known at any time on or after the third anniversary of the Closing Date. Seller shall be responsible for 55% and Purchaser shall be responsible for 45% of all Section 11.4 Losses which relate to or arise from on-site disposals or Releases of Hazardous Materials which occurred prior to the Closing Date but were not Known to Seller as of the Closing Date and which become Known during the period from the Closing Date through the day prior to the fourth anniversary of the Closing Date. Seller shall be responsible for 45% and -98- 104 Purchaser shall be responsible for 55% of Section 11.4 Losses which relate to or arise from on-site disposals or Releases of Hazardous Materials which occurred prior to the Closing Date but were not Known to Seller as of the Closing Date and which become Known during the period from the fourth anniversary of the Closing Date through the day prior to the sixth anniversary of the Closing Date. From and after the sixth anniversary of the Closing Date, Seller shall have no responsibility for Section 11.4 Losses (whether based on breach of representation and warranty or otherwise), and Purchaser shall be solely responsible for, and shall indemnify Seller against all Section 11.4 Losses, which relate to or arise from on-site disposals or Releases of Hazardous Materials which occurred prior to the Closing Date but were not Known to Seller as of the Closing Date and which become Known on or after the sixth anniversary date of the Closing Date. 11.5 Certain Limitations. (a) Except as set forth in the last sentence of this Section 11.5, the Seller shall be obligated to indemnify a Purchaser Indemnified Party only when the aggregate of all Losses suffered or incurred by all Purchaser Indemnified Parties as to which a right of indemnification is provided under this Article 11 exceeds Three Hundred Seventy Five Thousand Dollars ($375,000) (the "Threshold Amount"). After the aggregate of all such Losses exceeds the Threshold Amount, the Seller shall be obligated to indemnify all Purchaser Indemnified Parties for all Losses in excess of the Threshold Amount suffered or incurred by a Purchaser Indemnified Party as to which a right of indemnification is provided hereunder. Except as set forth in the next succeeding sentence, the aggregate liability of Seller under this Article 11 shall not exceed Twenty-Five Million Dollars ($25,000,000) (the "Maximum Amount"). Notwithstanding the above, the Threshold Amount and Maximum Amount limitations shall not apply to the indemnification obligations of the Seller pursuant to Sections 6.3, 11.2(a)(iii) and 11.2(a)(viii), and the payment of amounts by the Seller pursuant to such Sections shall not count toward the calculation of the Threshold Amount or Maximum Amount. (b) In the event that any Purchaser Indemnified Party shall receive any payment from any other Person under any insurance policy, indemnification agreement, warranty or other similar right in satisfaction of or recovery for any claim relating to a Loss with respect to -99- 105 which such Purchaser Indemnified Party was indemnified by and received payment thereon from Seller, then such Purchaser Indemnified Party shall pay over to Seller, after deducting all costs and expenses incurred by such Purchaser Indemnified Party in recouping such payment, the amount of such payment to the extent it represents a double recovery with respect to such Loss. Notwithstanding the above, no Purchaser Indemnified Party shall be under any obligation to assert or pursue any such claim relating to any Loss. 11.6 Notification of Claims. (a) A party that may be entitled to be indemnified pursuant to Section 11.2 or 11.3 (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, 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 Section 11 except to the extent the Indemnifying Party is prejudiced by such failure. Subject to the Indemnifying Party's right to defend in good faith claims as hereinafter provided, the Indemnifying Party shall satisfy or contest its obligations under this Section 11 within 30 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 claim or demand, then the Indemnifying Party shall be entitled to assume and control the defense of such claim or demand at its expense and through counsel and consultants of its choice if it gives notice of its intention to do so to the Indemnified Party within thirty (30) 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 and consultants 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 claim or demand 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 claim or demand, the Indemnifying Party shall cooperate with the Indemnified Party in such defense and make available to the Indemnified Party, at the -100- 106 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 claim or demand may be settled by the Indemnifying Party without the written consent of the Indemnified Party (which consent shall not be unreasonably withheld). 11.7 Indemnification Agreements. The parties hereto agree that to the extent Purchaser or any other Purchaser Indemnified Party may be entitled to indemnification pursuant to the Acquisition Agreement, on the one hand, or this Agreement, on the other hand, 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, Purchaser or any other Purchaser Indemnified Party may in its sole discretion elect under which agreement or agreements Seller 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 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. 11.8 Limitations. Notwithstanding anything to the contrary expressed or implied herein, no claim may be asserted by any Seller Indemnified Party or Purchaser Indemnified Party based upon the breach of any representation or warranty contained herein after the last day of the period set forth in Section 11.1 above for which the representation or warranty that is the subject of such claim survives. -101- 107 11.9 Exclusive Remedies; Materiality. If the Closing occurs, the remedies provided in this Article 11 constitute the sole and exclusive remedies for recoveries against another party for breaches of the representations and warranties in Sections 3 and 4 and for the matters specifically listed in Sections 11.2 and 11.3 as being indemnified against (whether any claim based on the facts and circumstances giving rise to such right of indemnification could also be made in contract, breach of warranty, tort or otherwise). Purchaser's or Seller's rights to claim indemnification pursuant to Section 11.2 or 11.3 for a fact or event described in either such Section shall not be affected (except as specifically described therein and in Section 11.4 with respect to certain Environmental Matters) by Purchaser's or Seller's Knowledge of such fact or event on or before the Closing Date. Notwithstanding anything to the contrary expressed or implied herein, following the adjustment to the Purchase Price contained in Section 2.5(b)(ii), Purchaser shall have no right to such indemnification under this Article 11 for breaches of representations or warranties contained in Sections 3.9 and 3.10 hereof. 11.10 Satisfaction of Indemnification Obligations. Subject to the limitations and procedures set forth above, claims for indemnified Losses shall be satisfied as follows: (i) By Southwire. Southwire shall satisfy its liability for indemnification Losses by paying the amount of such liability to Purchaser as Purchaser directs. (ii) By Purchaser. Purchaser shall satisfy its liability for indemnification Losses by paying the amount of such liability to Southwire as Southwire directs. 11.11 Indemnity Support. (a) At the Closing, Seller shall deliver to Purchaser an irrevocable letter of credit (the "Indemnity Support") in the form attached hereto as Exhibit I, payable in the amount of Fifteen Million Dollars ($15,000,000) issued in favor of Purchaser, such amount only to be reduced in accordance with Section 11.11(d) below. Such Indemnity Support shall be issued by a U.S. chartered bank with equity capital of at least $1,000,000,000 and with a long-term deposit rating of A- or better from Standard & Poor's Ratings Service (S&P) (or its -102- 108 equivalent from Moody's Investors Service, Inc. ("Moody's)) (such bank, the "Indemnity Support Issuer"). If the Indemnity Support Issuer's long-term deposit rating falls below BBB+ from S&P (or its equivalent from Moody's) after issuance of the Indemnity Support and the Indemnity Support is not replaced by Seller, not later than 30 days following receipt by Seller of written notice of such reduced rating, with a letter of credit in the form of Exhibit I issued by a bank with a rating which meets the requirements of the immediately preceding sentence, then Purchaser shall have the right to draw on the Indemnity Support in full. The Indemnity Support may be drawn upon by Purchaser in its discretion in the event of any Losses which may be subject to the indemnification provisions of Section 11.2(a)(iii) or Section 11.2(a)(viii). The Indemnity Support shall provide that it may be drawn upon by the Purchaser upon delivery to the Indemnity Support Issuer of a certificate in the form attached as Annex B to the Indemnity Support. The Indemnity Support shall provide that the amount of such support may be reduced upon delivery to the Indemnity Support Issuer of a certificate from Seller in the form attached as Annex D to the Indemnity Support. The Indemnity Support shall further provide that the Purchaser shall be entitled to draw the full amount of the Indemnity Support if within thirty (30) days prior to the expiration date of the then current Indemnity Support, such Indemnity Support has not been renewed or replaced by support meeting the requirements hereof in an amount equal to the then current amount thereof (or a reduced amount in accordance with Section 11.11(d)). (b) Subject to the provisions of Section 11.11(c), Seller covenants and agrees to deliver within 15 days after the end of the relevant fiscal quarter to Purchaser additional Indemnity Support, in the form of Exhibit I and issued by an Indemnity Support Issuer meeting the requirements set forth in Section 11.11(a), payable in the amount of Fifteen Million Dollars ($15,000,000), which shall be in addition to the Indemnity Support provided pursuant to Section 11.11(a), if, at the end of any fiscal quarter of Seller, the net worth of Seller and its Subsidiaries on a consolidated basis ("Seller's Consolidated Net Worth") shall be equal to or less than Two Hundred Fifty Million Dollars ($250,000,000), as shown on Seller's consolidated balance sheet as of the end of such quarter prepared in accordance with GAAP consistently applied. This additional Indemnity Support may subsequently be terminated (subject to reinstatement if the condition in the first sentence of this paragraph (b) should again apply) if, following the quarterly period at the end of which Seller's Consolidated Net Worth was less than $250,000,000, the Seller's Consolidated Net Worth was greater than $250,000,000 as of the end of any two (2) -103- 109 consecutive quarterly periods. For the Term (as hereinafter defined), within thirty (30) days after the end of each of the first three fiscal quarters of each fiscal year of Seller, Seller shall provide to Purchaser a certificate, signed by Seller's Chief Financial Officer or Chief Executive Officer, certifying that Seller's Consolidated Net Worth as of the end of such fiscal quarter either exceeds $250,000,000 or is equal to or less than that amount, as shown on Seller's consolidated balance sheet as of the end of such quarter prepared in accordance with GAAP consistently applied. Within sixty (60) days after the end of each fiscal year of Seller, Seller shall provide to Purchaser a certificate, signed by Seller's Independent Accountant, certifying that Seller's Consolidated Net Worth as of the end of such fiscal year either exceeds $250,000,000 or is equal to or less than that amount, as shown on Seller's consolidated balance sheet as of the end of such fiscal year prepared in accordance with GAAP consistently applied. (c) Seller may in its sole discretion substitute a portion of the Indemnity Support required hereunder for coverage of Environmental Matters by obtaining and maintaining an insurance policy covering any and all Environmental Matters which may be the subject of indemnification pursuant to Section 11.2(a)(iii) or Section 11.2(a)(viii). Any such insurance policy shall be provided by an insurance carrier having a rating of A or better from A.M. Best, and such policy shall name Purchaser as an insured party. The amount, scope and terms of any such insurance policy shall be satisfactory to Purchaser in its reasonable discretion. (d) The Indemnity Support delivered to Purchaser at the Closing and any additional Indemnity Support delivered to Purchaser pursuant to Section 11.11 (b), shall have a duration of seven (7) years from the Closing Date (the "Term"), either by its terms or by providing for automatic renewal, and shall be irrevocable. The amount of the Indemnity Support shall not be reduced, except as provided in Section 11.11(b) and except in accordance with this Section 11.11(d). (i) The amount of the Indemnity Support may be reduced, in the amounts specified in each of clauses (A) and (B) below, at any time, so long as (x) Seller's Consolidated Net Worth, as certified by Seller's Chief Financial Officer or Chief Executive Officer, is in excess of Two Hundred Fifty Million Dollars ($250,000,000), (y) -104- 110 Seller shall have complied with all of its obligations for indemnification under this Section 11, and (z) any of the following events shall have occurred: (A) the amount of the Indemnity Support then outstanding may be reduced by the amount of Five Million Dollars ($5,000,000), in the event that Seller obtains a policy of insurance from an insurance provider having a rating of A or better from A.M. Best, naming Purchaser as an additional insured thereunder (without obligation for the payment of any premium) and providing for the payment of all costs which may be incurred in connection with (1) the remediation activities required under the Record of Decision, or (2) the remediation activities required with respect to the plant site of the Gaston Copper Recycling Corporation in South Carolina (or Ten Million Dollars ($10,000,000) in the aggregate in the case of both (1) and (2)), and shall have provided to Purchaser reasonably satisfactory evidence thereof; and (B) the amount of the Indemnity Support then outstanding may be reduced by the corresponding amount indicated on Schedule 11.11(d), in each instance (the amount of such reductions not to exceed Two Million Dollars ($2,000,000) in the aggregate), in the event that Seller shall have obtained a final judgment or settlement, and shall have satisfied in full its obligations, if any, with respect thereto, in each of the Environmental Matters listed on Schedule 11.11(d), and shall have provided to Purchaser reasonably satisfactory evidence thereof; The reductions in the Indemnity Support permitted by clauses (A) and (B) above may be cumulative; provided, however, that at no time prior to the end of the Term shall the amount of the Indemnity Support be reduced to less than Three Million Dollars ($3,000,000) (or Eighteen Million Dollars ($18,000,000) so long as the additional Indemnity Support has been issued and not subsequently reduced as provided in Section 11.11(b) above). The amount of the Indemnity Support shall be increased from its then current level by the amount of Five Hundred Thousand Dollars ($500,000) (but not to exceed the applicable maximum Indemnity Support amount of Fifteen Million Dollars ($15,000,000) pursuant to Section 11.11(a) or Thirty Million Dollars ($30,000,000) pursuant to Section 11.11(b), as the case may be) in the event that Seller or any of -105- 111 its Affiliates, or Purchaser or any of its Affiliates, shall become subject to any Liability for Environmental Matters which was not known or had not been asserted as of the Closing Date and which may be or becomes the subject of a claim for indemnification pursuant to Section 11.2(a)(iii) or (viii). Upon the occurrence of any such event, Seller shall promptly notify Purchaser thereof in writing. (e) The rights of Purchaser with respect to the Indemnity Support provided for in this Section 11.11 shall be without prejudice to any other rights that Purchaser may have under this Agreement or otherwise, and Purchaser's election not to draw on the Indemnity Support in any instance shall not be deemed to be a waiver of any of such other rights of Purchaser or any further rights Purchaser may have with respect to the Indemnity Support. 12. GENERAL PROVISIONS 12.1 Expenses. Except as otherwise expressly provided in this Agreement, each party to this Agreement will bear its respective expenses incurred in connection with the preparation, negotiation, execution, and performance of this Agreement and the Contemplated Transactions, including all fees and expenses of agents, Representatives, counsel, and accountants. Notwithstanding the foregoing: (a) Seller shall pay the costs of obtaining a title commitment on the Real Property; and (b) Purchaser shall pay the applicable premiums for the issuance of any title insurance. 12.2 Public Announcements. Any public announcement or similar publicity with respect to this Agreement or the Contemplated Transactions will be issued, if at all, at such time and in such manner as Purchaser and Southwire shall mutually determine except as required by law. Purchaser will, and Southwire will cause NSA to, consult with each other concerning the means by which NSA's customers and suppliers and others having dealings with NSA will be informed of the Contemplated Transactions. 12.3 Confidentiality. Between the date of this Agreement and the Closing Date, Seller and Purchaser maintain in confidence, and will cause their respective Related Persons and Representatives to maintain in confidence any confidential or proprietary written, oral, or other information obtained from the other party or such parties' Related Persons or Representatives in connection with this Agreement or the Contemplated Transactions, unless (a) -106- 112 such information is already known to such party or to others not bound by a duty of confidentiality or such information becomes publicly available through no fault of such party, (b) the use of such information is necessary or appropriate in making any filing or obtaining any Consent or approval required for the consummation of the Contemplated Transactions, or (c) the furnishing or use of such information is required by or necessary or appropriate in connection with a Legal Requirement or Action. If the Contemplated Transactions are not consummated, each party will return or destroy as much of such written information as the other party may reasonably request. The provisions of this Section 12.3 are intended to be complementary and supplemental to, and are not intended to supplant or supersede, any of the terms, provisions or restrictions set forth in the Confidentiality Agreement executed on April 28, 1998 between Purchaser and Southwire. To the extent that any of the terms or provisions of this Section 12.3 are inconsistent with the terms or provisions of such Confidentiality Agreement, the terms and provisions of the Confidentiality Agreement shall govern and control. 12.4 Notices. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) when deposited in the mail, if sent via certified mail, with return receipt requested, or (c) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses set forth below (or to such other addresses as a party may designate by notice to the other parties): If to Southwire: Southwire Company One Southwire Drive Carrollton, Georgia 30119 Attention: William Hearnburg with a copy to: Alston & Bird LLP One Atlantic Center 1201 West Peachtree Street Atlanta, Georgia 30309 Attention: Sidney J. Nurkin If to Purchaser: Century Aluminum Company 2511 Garden Road Building A, Suite 200 Monterey, California 93940 -107- 113 Attention: Gerald J. Kitchen with a copy to: Curtis, Mallet-Prevost, Colt & Mosle LLP 101 Park Avenue, 35th Floor New York, New York 10178 Attention: Roman A. Bninski Matias A. Vega 12.5 Governing Law; Jurisdiction; Service of Process. This Agreement will be governed by and construed under the laws of the State of Delaware without regard to its principles pertaining to conflict of laws. Any suit or other Action seeking to enforce any provision of, or based upon any right arising out of, in connection with, or in any way relating to, this Agreement shall be brought only in the State or Federal courts sitting in the State of Delaware, unless such court shall not have jurisdiction over the parties or the claims asserted in such Action. Each party hereby irrevocably consents and submits to the jurisdiction and venue of such court and irrevocably waives any objection which it may now or hereafter have to the laying of the venue of any suit or Action brought in such courts and any claim that such suit or Action brought in such courts has been brought in an inconvenient forum. 12.6 Further Assurances. The parties agree (a) to furnish upon request to each other such further information, (b) to execute and deliver to each other such other documents, and (c) to do such other acts and things (including, without limitation, Purchaser executing and recording such easements, deed restrictions, use restrictions, access agreements or other documents, in form approved by Seller, as shall be necessary for Seller to perform the remedial activities contemplated by the Record of Decision or as may otherwise be required by any Order or Governmental Body with respect to Environmental Matters relating to the Real Property for which Seller is responsible under this Agreement), all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the Related Agreements and the documents referred to in this Agreement and the Related Agreements. 12.7 Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by any party in exercising any right, power, or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any -108- 114 such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. 12.8 Entire Agreement and Modification. This Agreement supersedes all prior agreements between the parties with respect to its subject matter and constitutes (along with the Related Agreements) a complete and exclusive statement of the terms of the agreement, including representations and warranties of Seller as to the condition of the Assets or the Business, between the parties with respect to its and their subject matter. This Agreement may not be amended except by a written agreement executed by the party to be charged with the amendment. 12.9 Assignments, Successors, and No Third-Party Rights. Except for (i) assignments by Purchaser to any of its Affiliates, (ii) assignments of rights to indemnification for Environmental Liabilities to any subsequent purchaser of the Plant, the Real Property, and (iii) assignments of rights hereunder by Purchaser in connection with any security to be provided by Purchaser for any financing which Purchaser may obtain from time to time, each of which assignments is hereby expressly permitted, neither of the parties may assign any of its respective rights under this Agreement without the prior consent of the other party. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors, permitted assigns, heirs, executors, and personal representatives of the parties. Nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their successors, assigns, heirs, executors, and personal representatives. 12.10 Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. -109- 115 12.11 Section Headings, Construction. The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. Unless otherwise expressly provided, the word "including" does not limit the preceding words or terms. 12.12 Time of Essence. With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence. 12.13 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. 12.14 Records Retention. . For a period of seven (7) years after the Closing Date, Purchaser shall afford to Seller access to, and Purchaser shall retain and shall not destroy, all of the books, records, Governmental Authorizations, Tax Returns, reports, data, materials and documents which relate to the Business as operated prior to the Closing Date. -110- 116 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. CENTURY ALUMINUM COMPANY Attest By: By: --------------------------------- ----------------------------------- Gerald A. Meyers President SOUTHWIRE COMPANY Attest By: By: --------------------------------- ----------------------------------- Roy Richards, Jr. Chief Executive Officer and Chairman of the Board -111- 117 SUPPLEMENTAL SCHEDULES TO THE STOCK PURCHASE AGREEMENT BETWEEN CENTURY ALUMINUM COMPANY AND SOUTHWIRE COMPANY Dated as of April 2 , 2001 Supplemental Schedule 1.1(a) - Additional Assets Supplemental Schedule 1.1(b) - Adjusted Working Capital Supplemental Schedule 1.1(c) - Assumed Liabilities Supplemental Schedule 1.1(d) - Closed Potliner Disposal Areas Supplemental Schedule 1.1(e) - Excluded Employees Supplemental Schedule 1.1(f) - Managers Supplemental Schedule 1.1(g) - Leased Personal Property Supplemental Schedule 1.1(h) - Permitted Encumbrances Supplemental Schedule 1.1(i) - Real Property Supplemental Schedule 2.6(a) - Contingent Consideration Supplemental Schedule 3.2(f) - Subsidiaries Supplemental Schedule 3.3(b) - Conflicts and Authorizations Supplemental Schedule 3.3(c) - Required Consents Supplemental Schedule 3.5 - Exceptions to GAAP Supplemental Schedule 3.6 - Disclosed Liabilities Supplemental Schedule 3.7(a) - Operating and Capital Expenditures; Operating Plan and Capital Budgets Supplemental Schedule 3.7(b) - Capital Projects and Projected Expenditures Supplemental Schedule 3.8(a) - Sales Orders Supplemental Schedule 3.8(b) - Purchase Orders Supplemental Schedule 3.9 - Accounts Receivable Supplemental Schedule 3.10 - Inventories Supplemental Schedule 3.11(a) - Exceptions to Conduct in the Ordinary Course Supplemental Schedule 3.11(b) - Non-holding Company Activity Supplemental Schedule 3.12(b) - Violations Relating to Real Property; Leases Supplemental Schedule 3.12(c) - Occupancy Certificates Supplemental Schedule 3.12(e) - Real Property Improvements Supplemental Schedule 3.13 - Exceptions to Ownership of Assets Supplemental Schedule 3.13(a)(iii) - Vehicles Supplemental Schedule 3.13(b) - Southwire Claims Supplemental Schedule 3.13(c) - Non-Depreciated Assets Requiring Repairs Supplemental Schedule 3.13(d) - Asset Transfer Restrictions Supplemental Schedule 3.15(a) - Customers Supplemental Schedule 3.16 - Product Warranties Supplemental Schedule 3.17 - Tax Matters Supplemental Schedule 3.18 - Employee Benefit Matters 118 Supplemental Schedule 3.19(a) - Non-Compliance With Laws; Permits Supplemental Schedule 3.19(b) - Non-transferable Permits Supplemental Schedule 3.20 - Litigation; Orders; Workers' Compensation Supplemental Schedule 3.21(a) - Material Contracts Supplemental Schedule 3.21(b) - Exceptions to Validity of Material Contracts Supplemental Schedule 3.21(c) - Parties In Breach of Material Contracts Supplemental Schedule 3.22(a)(i) - Owned Intellectual Property Supplemental Schedule 3.22(a)(ii) - Licensed Intellectual Property Supplemental Schedule 3.22(a)(iii) - Conflicts or Infringements Supplemental Schedule 3.22(b) - Exceptions to Ownership of Owned Intellectual Property Supplemental Schedule 3.22(d) - Transfer Restrictions on Intellectual Property Supplemental Schedule 3.23(a) - Insurance Policies Supplemental Schedule 3.23(c) - Risk Sharing Contracts Supplemental Schedule 3.23(d) - Insurance Loss Experience Supplemental Schedule 3.24(a) - Environmental Matters Supplemental Schedule 3.24(e) - Environmental Permits Supplemental Schedule 3.25(a) - Employees Supplemental Schedule 3.25(b) - Employment/Consulting Contracts Supplemental Schedule 3.25(c) - Employee Severance Agreements Supplemental Schedule 3.26(a) - Accounts Supplemental Schedule 3.26(b) - Power of Attorney Supplemental Schedule 3.29 - Exceptions to Year 2000 Compliance Supplemental Schedule 3.30 - Material Adverse Changes Supplemental Schedule 8.10 - Requirements for Land Title Surveys Supplemental Schedule 8.11 - Easements Granted in Favor of Purchaser Supplemental Schedule 9.7 - Easements Granted in Favor of Seller Supplemental Schedule 11.11(d) - Environmental Matters Permitting Indemnification Support Reduction References to the "Agreement" in these supplemental schedules are references to the Stock Purchase Agreement described at the top of the prior page, references to "Southwire", "Metalsco", "Skyliner" and "NSA" are references to such entities as defined in such Stock Purchase Agreement, and other capitalized terms in these schedules shall have the same meaning as in the Agreement unless the context clearly indicates to the contrary. The headings in these supplemental schedules are merely for reference purposes only, and the heading shall not restrict or otherwise affect the adequacy of the disclosure or expand the representations or warranties in the Agreement. Disclosure under one heading of a supplemental schedule is deemed disclosure for all purposes of such supplemental schedule. 119 All original attachments and the attachments to these supplemental schedules are hereby incorporated into and made a part of them by reference unless expressly provided otherwise. All supplemental schedules have been marked to show changes from the original schedules. Disclosure in these supplemental schedules of a matter that is not required to be disclosed does not require disclosure of any similar matters not required to be disclosed. These Supplemental Schedules are delivered by Seller pursuant to ss.5.13 of the Agreement on this 2nd day of April , 2001 and to the extent that they differ from the original schedules delivered by Seller on August 31, 2000 these schedules are intended to supplement, modify and amend the original schedules. IN WITNESS WHEREOF, the parties have executed these supplemental disclosure schedules this 2nd day of April, 2001. Century Aluminum Company Southwire Company By: By: --------------------------------- --------------------------- Gerald J. Kitchen William V. Hearnburg Executive Vice President Executive Vice President EX-2.2 3 y47973ex2-2.txt ASSET PURCHASE AGREEMENT 1 Exhibit 2.2 ASSET PURCHASE AGREEMENT BETWEEN CENTURY ALUMINUM COMPANY, CENTURY KENTUCKY, INC. NSA, LTD. AND GLENCORE AG DATED AS OF APRIL 2, 2001 2 TABLE OF CONTENTS PAGE # ARTICLE I DEFINITIONS.....................................................2 2.1 Transfer of Assets...............................................3 2.2 Purchased Assets.................................................3 2.3 Excluded Assets..................................................4 2.4 Liabilities......................................................4 ARTICLE III PURCHASE PRICE AND ADJUSTMENT.................................4 3.1 Purchase Price...................................................4 3.2 Payment of Purchase Price........................................5 3.3 Net Working Capital Adjustment...................................5 3.4 Additional Consideration.........................................5 3.5 Allocation of Purchase Price.....................................6 3.6 Effectiveness....................................................6 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER.......................6 4.1 Organization and Good Standing; Governing Documents..............6 4.2 Authority; Enforceability........................................6 4.3 No Conflict or Breach............................................7 4.4 Governmental Consents and Approvals..............................7 4.5 Litigation.......................................................7 4.6 Brokers..........................................................7 4.7 Disclosure.......................................................7 ARTICLE V REPRESENTATIONS AND WARRANTIES OF GLENCORE......................8 5.1 Organization and Good Standing...................................8 5.2 Authority; Enforceability........................................8 5.3 No Conflict or Breach............................................8 5.4 Governmental Consents and Approvals..............................8 5.5 Litigation.......................................................9 5.6 Brokers..........................................................9 5.7 Disclosure.......................................................9 ARTICLE VI INDIVIDUAL COVENANTS...........................................9 6.1 Covenants of Seller..............................................9 6.2 Covenants of Glencore............................................9 ARTICLE VII MUTUAL COVENANTS..............................................9 7.1 Notification....................................................10 7.2 Best Efforts....................................................10 7.3 Guarantees......................................................10 7.4 Intentionally Omitted...........................................10 7.5 Contract Splitting..............................................10 ARTICLE VIII CONDITIONS PRECEDENT TO GLENCORE'S OBLIGATIONS..............10 3 8.1 Representations and Warranties..................................10 8.2 Compliance with Covenants.......................................11 8.3 Absence of Litigation...........................................11 8.4 Intentionally Omitted...........................................11 8.5 Conditions to Obligations of Century and Closing under Stock Purchase Agreement. ................................11 8.6 Operating Agreements............................................11 8.7 Mortgage........................................................11 8.8 Assignment Agreement............................................11 ARTICLE IX CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS..................11 9.1 Representations and Warranties..................................12 9.2 Compliance with Covenants.......................................12 9.3 Absence of Litigation...........................................12 9.4 Intentionally Omitted...........................................12 9.5 Closing under Stock Purchase Agreement..........................12 9.6 Operating Agreements............................................12 ARTICLE X CLOSING........................................................12 10.1 Closing......................................................12 10.2 Deliveries by Seller.........................................12 10.3 Deliveries by Glencore.......................................13 10.4 Transfer Costs...............................................14 10.5 Further Assurances...........................................14 ARTICLE XI INDEMNIFICATION...............................................14 11.1 Southwire Indemnity..........................................14 11.2 Indemnification by Seller....................................15 11.3 Indemnification by Glencore..................................15 11.4 Indemnification Threshold....................................16 11.5 Time Limits on Indemnification...............................16 11.6 Notice of Third Party Claim..................................16 11.7 Claims between Buyer and Seller..............................17 11.8 Dollar Limit on Indemnification by Seller and Glencore.......17 11.9 Exclusive Remedies...........................................17 ARTICLE XII TERMINATION..................................................17 12.1 Termination..................................................17 12.2 Effect on Obligations........................................18 ARTICLE XIII MISCELLANEOUS...............................................18 13.1 Bulk Sales...................................................18 13.2 Intentionally Omitted........................................18 13.3 Expenses.....................................................18 13.4 Publicity....................................................18 13.5 Best Efforts.................................................19 13.6 Notices......................................................19 13.7 Governing Law................................................19 4 13.8 Dispute Resolution...........................................19 13.9 Counterparts.................................................20 13.10 Assignment...................................................20 13.11 Third Party Beneficiaries....................................20 13.12 Headings.....................................................20 13.13 Amendments...................................................20 13.14 Specific Performance.........................................20 13.15 Access to Records............................................20 13.16 Severability.................................................20 13.17 Entire Agreement.............................................20 5 ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (together with the Schedules and Exhibits hereto, the "Agreement") dated as of April 2, 2001 is entered into by and between CENTURY ALUMINUM COMPANY, a Delaware corporation ("Century"), Century Kentucky, Inc., a Delaware corporation ("CKI"), NSA, Ltd., a Kentucky limited partnership ("NSA" and together with Century and CKI, collectively, "Seller"), and GLENCORE AG, a Swiss corporation ("Glencore"). RECITALS: 1. Century has agreed, pursuant to a Stock Purchase Agreement dated August 31, 2000 (the "Stock Purchase Agreement"), with Southwire Company, a Delaware corporation ("Southwire"), a copy of which is attached hereto as Exhibit A, to purchase from Southwire all of the capital stock of Metalsco Ltd., a Georgia corporation ("Metalsco"), and certain additional properties and assets (the "Additional Assets") owned by Southwire and used in the conduct of the Business (as defined herein), on the terms and subject to the conditions set forth in the Stock Purchase Agreement. 2. Metalsco owns directly and indirectly all of the partnership interests in NSA, which owns and operates the NSA aluminum reduction facility located at Hawesville, Hancock County, Kentucky (the "Plant"). 3. At the closing of the purchase and sale under the Stock Purchase Agreement (the "Southwire Closing"), (a) CKI will take title to the shares of capital stock of Metalsco, and (b) Century Aluminum of Kentucky LLC ("CAK"), a Delaware limited liability company of which CKI is the sole member, will take assignment from Southwire of the Additional Assets listed on Exhibit B hereto ("CAK Assets"). 4. Century and Glencore desire to own the Plant and operate the aluminum reduction business conducted at the Plant (the "Business") jointly (directly or indirectly) and, to such purpose, Glencore desires to purchase, either directly or through a wholly-owned entity established therefor (collectively the "Buyer"), from Century, CKI and NSA, and Century, CKI and NSA desire to sell, to Buyer, immediately following the occurrence of the Southwire Closing, (i) pot line five (5) at the Plant, (ii) a twenty percent (20%) undivided interest in and to certain assets and properties comprising a part of the Plant or otherwise used in the conduct of the Business, as more fully described in Section 2.2 hereof (the assets described in clauses (i) and (ii) being the "Purchased Assets"), and (iii) a membership interest equal to twenty percent (20%) of the total membership interests in CAK (the "Membership Interest"), upon the terms and subject to the conditions set forth herein. 5. In connection with the ownership of the Plant and operation of the Business, NSA, CAK and Buyer intend, on and as of the Closing Date, to enter into an Owners Agreement in substantially the form of Exhibit C attached hereto (the "Owners Agreement"). 6 NOW, THEREFORE, in consideration of premises and the respective covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS The definitions of the following terms are set forth in the Sections specified below and will apply throughout this Agreement: DEFINITION SECTION Affiliate Section 11.1. Additional Assets Recital 1. Aluminum Supply Agreement Section 7.5 Business Recital 4. Buyer Recital 4. CAK Recital 3. CAK Assets Recital 3. CKI Recital 3. Claims Section 4.5. Closing Section 10.1. Closing Date Section 10.1. Environmental Access and Cooperation Section 8.6 Agreement Fifth Pot Line Section 2.2(a). Glencore First Paragraph. Groundwater Treatment Building Lease Section 8.6 Agreement HSR Act Section 4.4. Indemnified Party Section 11.5. Indemnifying Party Section 11.5. 2 7 Kaiser Section 7.5. Membership Interest Recital 4. Metalsco Recital 1. NSA Recital 2. Operator Section 8.6. Owners Agreement Recital 5. pro rata share Section 3.3. Purchased Assets Recital 4. Purchase Price Section 3.1. Representatives Section 7.2. Seller First Paragraph. Shared Services Agreement Section 8.6 Southwire Recital 1. Southwire Closing Recital 3. Southwire Purchase Price Section 3.3(a). Stock Purchase Agreement Recital 1. Third Party Claim Section 11.5. Threshold Section 11.3. ARTICLE II SALE AND PURCHASE OF ASSETS 2.1 Transfer of Assets. On the terms and subject to the conditions of this Agreement, Seller agrees to sell, convey, assign, transfer and deliver, to Buyer, and Glencore agrees to cause Buyer to purchase and accept from Seller, at the Closing, all of Seller's right, title and interest in and to (a) the Purchased Assets, and (b) the Membership Interest. 2.2 Purchased Assets. The Purchased Assets specifically include the following: 3 8 (a) The fixed and movable assets comprising pot line five (5) at the Plant, together with the real property thereunder, all as more fully described in Exhibit D hereto (the "Fifth Pot Line"). (b) An undivided twenty percent (20%) interest as tenant in common in all fixed and movable assets comprising the Plant or otherwise used in the conduct of the Business, except the Excluded Assets. (c) An undivided twenty percent (20%) interest in all of the rights of Seller under the Stock Purchase Agreement, including without limitation with respect to the representations and warranties of Southwire to the extent that they relate to the Purchased Assets, the CAK Assets or the Business, and in Seller's rights to indemnification arising thereunder. (d) Twenty percent (20%) of the working capital of NSA at the time of the Southwire Closing. 2.3 Excluded Assets. The Excluded Assets are the fixed and movable assets comprising pot lines one (1) through four (4) at the Plant, together with the real property thereunder, all as more fully described on Exhibit E hereto. 2.4 Liabilities. (a) Assumed Liabilities. On the terms and subject to the conditions of this Agreement, Buyer at Closing will assume and agree to pay, perform and discharge when due Buyer's pro rata share of (i) all liabilities of the Business, including any liabilities for matters as to which no indemnification or a partial indemnification payment is received from Southwire, and (ii) the obligations assumed by Seller under the Stock Purchase Agreement, in each case not otherwise excluded hereunder or accounted for in working capital adjustments (collectively, the "Assumed Liabilities"). (b) Excluded Liabilities. The Purchased Assets and the Membership Interest shall be sold and conveyed to Buyer free and clear of, and Seller will retain sole responsibility for Seller's pro rata share of (i) all liabilities of the Business, including any liabilities for matters as to which no indemnification or a partial indemnification payment is received from Southwire, and (ii) the obligations assumed by Seller under the Stock Purchase Agreement. ARTICLE III PURCHASE PRICE AND ADJUSTMENT 3.1 Purchase Price. Subject to the adjustment provided for in Section 3.3, the aggregate purchase price (the "Purchase Price") for the Purchased Assets and the Membership Interest will be Ninety-Nine Million US Dollars (US$99,000,000.00), subject to pro rata adjustment to reflect the price adjustments pursuant to Section 2.4.7 of the Stock Purchase Agreement. 4 9 3.2 Payment of Purchase Price. At the Closing, the Purchase Price adjusted pursuant to Section 2.4.7 of the Stock Purchase Agreement will be paid by Glencore or Buyer to Century by wire transfer of immediately available funds to the account theretofore designated by Seller in a written notice to Glencore. 3.3 Net Working Capital Adjustment. (a) The Purchase Price shall be subject to adjustment after the Closing as specified in this Section 3.3: (i) In the event that Seller shall be obligated to make any payment to Southwire as an adjustment, as provided for in Section 2.5(c)(ii) of the Stock Purchase Agreement, to the purchase price for the purchase of the capital stock of Metalsco and the Additional Assets (the "Southwire Purchase Price"), Seller shall, no later than ten (10) Business Days prior to the date of making the payment thereof, provide to Buyer written notice of (A) the amount of such adjustment to be paid, (B) Buyer's pro rata share thereof, and (C) the date on which Seller intends to make payment thereof to Southwire. No later than 9:00 a.m. Pacific time on the date on which Seller intends to make payment of such adjustment, Buyer shall pay to Seller by wire transfer of immediately available funds to such account as Seller shall notify Buyer in writing Buyer's pro rata share thereof. (ii) In the event that Southwire shall be obligated to make any payment to Seller as an adjustment to the Southwire Purchase Price, as provided for in Section 2.5(c)(i) of the Stock Purchase Agreement, Seller shall promptly deliver to Buyer a copy of any notice delivered by Southwire to Seller in respect thereto and, upon receipt of any payment in respect of such adjustment, shall promptly deliver to Buyer by wire transfer of immediately available funds to such account as Buyer shall notify Seller in writing Buyer's pro rata share thereof. As used in this Agreement, "pro rata share" when used in relation to Buyer shall mean a twenty percent (20%) share thereof, and when used in relation to Seller shall mean an eighty percent (80%) share thereof. (b) Seller will consult with Buyer during the course of the working capital adjustment process provided for in the Stock Purchase Agreement and will permit Buyer to participate in any meetings and discussions relating thereto at Buyer's request. Seller and Buyer agree to cooperate in any determination with respect thereto and agree that each of Seller and Buyer will bear its pro rata share of any costs incurred in connection therewith. 3.4 Additional Consideration. Pursuant to the Stock Purchase Agreement, Seller is obligated (i) to pay to Southwire certain contingent consideration, as provided for in Section 2.6 of the Stock Purchase Agreement, and (ii) to assume certain indebtedness and liabilities of Southwire and NSA, as the case may be, as provided for in Section 2.7 of the Stock Purchase Agreement. Glencore hereby agrees that it shall contribute or cause to be contributed its pro rata share of any payments required to be made by Seller with respect to such contingent 5 10 consideration and such assumed indebtedness and liabilities, in the manner contemplated by the Owners Agreement. 3.5 Allocation of Purchase Price. The Purchase Price shall be allocated in accordance with Exhibit F attached hereto. 3.6 Effectiveness. In the event that the Closing shall occur, Seller and Glencore agree that Buyer's pro rata share of the results of operations of the Business acquired by Buyer hereunder from 12:02 am on April 1, 2001 shall be for the account of Buyer, provided that such results of operations would have been for its account had the Closing occurred as of such time. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER Seller represents and warrants to Glencore as follows: 4.1 Organization and Good Standing; Governing Documents. Century is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Century has all requisite power and authority to own its properties and to conduct its business as presently conducted. CKI is a corporation duly organized and validly existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority to own sits properties, including the shares of capital stock of Metalsco, and to conduct its business as presently conducted. NSA is a limited partnership duly organized and validly existing and in good standing under the laws of the State of Kentucky, and has all requisite power and authority to own its properties and to conduct its business as presently conducted. As of the Closing Date, CAK will be a limited liability company duly organized and validly existing and in good standing under the laws of the State of Delaware, will have all requisite power and authority to own its properties, including the CAK Assets, to conduct its business as then conducted, and will be qualified to do business in Kentucky. 4.2 Authority; Enforceability. Century has all requisite power and authority to execute and deliver this Agreement and its Parent Guarantee (as such term is defined in the Owners Agreement) and to perform the transactions contemplated hereby and thereby, CKI has all requisite power and authority to execute and deliver this Agreement and to perform the transactions contemplated hereby, NSA has all requisite power and authority to execute and deliver this Agreement and the Owners Agreement and to perform the transactions contemplated hereby and thereby and, as of the Closing Date, CAK will have all requisite power and authority to execute and deliver the Owners Agreement and to perform the transactions contemplated thereby and by this Agreement. The execution, delivery and performance of this Agreement, the Owners Agreement and Century's Parent Guarantee and the consummation of the transactions contemplated hereby and thereby have been, or will be on or prior to the Closing Date, duly and validly authorized by all necessary action on the part of Century, CKI, NSA and CAK, as the case may be. This Agreement has been duly executed and delivered by Century, CKI and NSA and constitutes a valid and binding obligation of Century, CKI and NSA, enforceable against Century, CKI and NSA in accordance with its terms and when executed and delivered by NSA, CAK and Century, as the case may be, on and as of the Closing Date, the Owners Agreement and Century's Parent Guarantee will have been duly executed and delivered by NSA, CAK and 6 11 Century, as the case may be, and will constitute valid and binding obligations of NSA, CAK and Century, as the case may be, enforceable against NSA, CAK and Century in accordance with their terms. 4.3 No Conflict or Breach. The execution, delivery and performance of this Agreement, the Owners Agreement and Seller's Parent Guarantee will not: (a) conflict with or constitute a violation of the Articles of Incorporation or By-Laws or other constitutive documents of Century, CKI, NSA or CAK; (b) conflict with or constitute a violation of any law, statute, judgment, order, decree or regulation of any legislative body, court, administrative agency, governmental authority or arbitrator applicable to or relating to Century, CKI, NSA, CAK or the Purchased Assets or the Membership Interest; (c) conflict with, constitute a default under, result in a breach or acceleration of or, except as set forth on Schedule 4.3, require notice to or the consent of any third party under any contract, agreement, commitment, mortgage, note, license or other instrument or obligation to which Century, CKI, NSA or CAK is party or by which it is bound or by which the Purchased Assets or the Membership Interest are affected; or (d) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever on any of the Purchased Assets, the Membership Interest or CAK. 4.4 Governmental Consents and Approvals. The execution, delivery and performance of this Agreement and its Parent Guarantee by Seller and of the Owners Agreement by NSA and CAK 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 as described in Schedule 4.4 attached hereto. 4.5 Litigation. There are no pending or, to the knowledge of Century, CKI or NSA, threatened claims, actions, suits, arbitration proceedings, inquiries, hearings, injunctions or investigations ("Claims") against Century, CKI, NSA or CAK relating to or arising out of, or that may affect, the Stock Purchase Agreement, this Agreement, the Owners Agreement or Seller's Parent Guarantee or the transactions contemplated hereby or thereby. 4.6 Brokers. No finder, broker, agent or other intermediary has acted for or on behalf of Seller in connection with the negotiation or consummation of this Agreement, and there are no claims for any brokerage commission, finder's fee or similar payment due from Seller. 4.7 Disclosure. No representation, warranty or statement made by Seller in this Agreement, or in any document furnished or to be furnished to Glencore or Buyer by or on behalf of Seller pursuant to this Agreement, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary to make the statements contained herein or therein not misleading. 7 12 ARTICLE V REPRESENTATIONS AND WARRANTIES OF GLENCORE Glencore represents and warrants to Seller as follows: 5.1 Organization and Good Standing. Glencore is a corporation duly organized, validly existing and in good standing under the laws of Switzerland. Glencore has all requisite power and authority to own its properties and to conduct its business as presently conducted. As of the Closing Date, Buyer will be a limited liability company duly formed and validly existing and in good standing under the laws of the State of Delaware and will have all requisite power and authority to own its properties, including the Purchased Assets and the Membership Interest, and to conduct its business as then conducted. 5.2 Authority; Enforceability. Glencore has all requisite power and authority to execute, deliver and perform this Agreement and its Parent Guarantee and the transactions contemplated hereby and thereby and as of the Closing Date Buyer will have all requisite power and authority to execute and deliver the Owners Agreement and to perform the transactions contemplated thereby and by this Agreement. The execution, delivery and performance of this Agreement, the Owners Agreement and Glencore's Parent Guarantee, and the consummation of the transactions contemplated hereby and thereby, have been, or will be on or prior to the Closing Date, duly and validly authorized by all necessary action on the part of Glencore and Buyer, as the case may be. This Agreement has been duly executed and delivered by Glencore and constitutes a valid and binding obligation of Glencore, enforceable against Glencore in accordance with its terms and when executed and delivered by Glencore or Buyer, as the case may be, on and as of the Closing Date, the Owners Agreement and Glencore's Parent Guarantee will have been duly executed and delivered by Glencore and Buyer, as the case may be, and will constitute valid and binding obligations of Glencore and Buyer, as the case may be, enforceable against Glencore and Buyer in accordance with their terms. 5.3 No Conflict or Breach. The execution, delivery and performance of this Agreement, the Owners Agreement and Glencore's Parent Guarantee do not and will not (a) conflict with or constitute a violation of the Articles of Incorporation or Certificate of Formation or By-Laws of Glencore or Buyer, as the case may be, or (b) conflict with or constitute a violation of any law, statute, judgment, order, decree or regulation of any legislative body, court, administrative agency, governmental authority or arbitrator applicable to or relating to Glencore or Buyer, or (c) conflict with, constitute a default under, result in a breach or acceleration of or require notice to or the consent of any third party under any contract, agreement, commitment, mortgage, note, license or other instrument or obligation to which Glencore or Buyer is party or by which it is bound. 5.4 Governmental Consents and Approvals. The execution, delivery and performance of this Agreement, the Owners Agreement and Glencore's Parent Guarantee by Glencore and Buyer, as the case may be, do not and will not require any consent, approval, authorization or other order of, action by, filing with or notification to any governmental authority. 8 13 5.5 Litigation. There are no Claims pending, or to the knowledge of Glencore threatened, against Glencore or its operations relating to or arising out of, or that may affect, this Agreement, the Owners Agreement, Glencore's Parent Guarantee or the transactions contemplated hereby or thereby. 5.6 Brokers. No finder, broker, agent or other intermediary has acted for or on behalf of Glencore in connection with the negotiation or consummation of this Agreement, and there are no claims for any brokerage commission, finder's fee or similar payment due from Glencore. 5.7 Disclosure. No representation, warranty or statement made by Glencore in this Agreement, or in any document furnished or to be furnished to Seller by or on behalf of Glencore pursuant to this Agreement, contains or will contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary to make the statements contained herein or therein not misleading. ARTICLE VI INDIVIDUAL COVENANTS 6.1 Covenants of Seller. Seller covenants and agrees with Glencore as follows: (a) Access and Information. Seller will provide to Glencore and Buyer reasonable access to any and all information and documents provided by Southwire to Seller relating to the Plant and the Business whether prior to the date hereof, from the date hereof until the Closing Date, or after the Closing Date, and will provide copies of any and all such documents upon written request of Buyer. Seller will keep Buyer reasonably informed of all material information relating to the Plant and the Business provided to Seller by or on behalf of Southwire from the date hereof until the Closing Date. (b) No Amendments, Waivers. Seller shall not agree (nor has it agreed since the date of execution of the Stock Purchase Agreement) to any amendment of, or grant any waiver of any agreement or obligation of Southwire under, the Stock Purchase Agreement without the prior written consent of Glencore, which consent shall not be unreasonably withheld. (c) Guarantee of Performance. Century hereby unconditionally guarantees to Glencore the payment and performance by CKI and NSA of all of their obligations set forth in this Agreement in accordance with the terms hereof. 6.2 Covenants of Glencore. Glencore hereby unconditionally guarantees to Seller the payment and performance by Buyer of all of its obligations set forth in this Agreement in accordance with the terms hereof. ARTICLE VII MUTUAL COVENANTS Each of Glencore and Seller covenants and agrees with the other as follows: 9 14 7.1 Notification. It shall notify the other party promptly of any fact or circumstance the existence of which would cause any of the representations and warranties of Southwire made in the Stock Purchase Agreement to cease to be true and correct in any material respect at any time from the date hereof until the Closing Date. 7.2 Best Efforts. It shall use its best efforts to make or obtain as promptly as possible all consents, approvals, authorizations, registrations and filings with all federal, state or local judicial or governmental authorities or administrative agencies as are required in connection with the consummation of the transactions contemplated by this Agreement. 7.3 Guarantees. Subject to approval of the transaction involved in the manner specified in the Owners Agreement, it (or one of its Affiliates acceptable to the relevant supplier) shall provide such guarantees as may be required by any suppliers of the Business in accordance with their pro rata share of the obligations relating thereto. 7.4 Intentionally Omitted. 7.5 Contract Splitting. Immediately following the Closing, CAK and Seller shall use their best efforts to obtain the agreement of (i) Kaiser Aluminum & Chemical Corporation ("Kaiser") to split the Alumina Supply Agreement, dated as of December 18, 1997 between Kaiser and Southwire, as amended by Amendment Number 1, dated October 26, 1998, which will be assigned by Southwire to CAK at the Southwire Closing, into two separate contracts, one with NSA and the other with Buyer (or an Affiliate thereof), based on their respective pro rata share of the Business, and (ii) Southwire to split the Aluminum Supply Agreement entered into as of the Southwire Closing date (the "Aluminum Supply Agreement") between Century and Southwire, into two separate contracts, the first with NSA with respect to the production and sale of, the premium molten aluminum, meeting the standard set forth on Exhibit A to the Aluminum Supply Agreement and the second with Buyer (or an Affiliate thereof) with respect to the production and sale of aluminum meeting the P1020A Standard (as such term is defined in the Aluminum Supply Agreement). To the extent the split of the Aluminum Supply Agreement does not reflect the parties respective pro rata share of the Business, they shall make an annual adjustment to reflect their intention to share the economic burden and benefit of the Aluminum Supply Agreement based on their pro rata share of the Business. ARTICLE VIII CONDITIONS PRECEDENT TO GLENCORE'S OBLIGATIONS The obligations of Glencore to consummate or cause the consummation of the transactions contemplated by this Agreement are subject to the satisfaction of the following conditions on or before the Closing Date, unless specifically waived in writing by Glencore prior to the Closing Date: 8.1 Representations and Warranties. The representations and warranties of Seller contained in this Agreement shall have been true and correct on the date of this Agreement and shall be true and correct on the Closing Date as though made on and as of the Closing Date. 10 15 8.2 Compliance with Covenants. Seller shall have duly performed and complied or caused the performance or compliance with all covenants, agreements and obligations required by this Agreement to be performed or complied with by it on or prior to the Closing. 8.3 Absence of Litigation. No action or proceeding shall be pending by or before any court or other governmental body or agency seeking to restrain, prohibit or invalidate the transactions contemplated by this Agreement or which would adversely affect the right of Buyer to own, operate or control the Purchased Assets or the Membership Interest after the Closing Date. 8.4 Intentionally Omitted. 8.5 Conditions to Obligations of Century and Closing under Stock Purchase Agreement. The conditions to the obligations of Century under the Stock Purchase Agreement shall have been satisfied, none of such conditions shall have been waived by Century without the express written consent of Glencore, and the Southwire Closing shall occur. 8.6 Operating Agreements. The parties thereto (other than persons under the control of Glencore) shall have executed the Shared Services Agreement (as defined in the Stock Purchase Agreement), the Environmental Access and Cooperation Agreement (as defined in the Stock Purchase Agreement), the Groundwater Treatment Building Lease Agreement to be entered into by NSA, Buyer and Southwire pursuant to the Environmental Access and Cooperation Agreement (the "Groundwater Treatment Building Lease Agreement"), the Owners Agreement, the CAK limited liability operating agreement and Seller's Parent Guarantee. 8.7 Mortgage. The Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement granted by NSA in connection with Seller's financing of the transactions contemplated by the Stock Purchase Agreement, to the extent that each such document relates to the Plant, shall be reasonably satisfactory to Glencore in form and substance. 8.8 Assignment Agreement. Buyer and CKI shall have executed and delivered an Assignment Agreement, assigning to Buyer a 20% undivided interest in and to the indemnification rights granted by Southwire to Seller (and assigned to CKI) pursuant to the Stock Purchase Agreement, and such assignment shall be agreed to and acknowledged by Southwire. ARTICLE IX CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS The obligations of Seller to consummate or cause the consummation of the transactions contemplated by this Agreement are subject to the satisfaction of each of the following conditions on or before the Closing Date, unless specifically waived in writing by Seller prior to the Closing: 11 16 9.1 Representations and Warranties. The representations and warranties of Glencore contained in this Agreement shall have been true and correct on the date of this Agreement, and shall be true and correct on the Closing Date as though made on and as of the Closing Date. 9.2 Compliance with Covenants. Glencore shall have duly performed and complied or caused the performance and compliance with all covenants, agreements and obligations required by this Agreement to be performed or complied with by it on or prior to the Closing. 9.3 Absence of Litigation. No action or proceeding shall be pending by or before any court or other governmental body or agency seeking to restrain, prohibit or invalidate the transactions contemplated by this Agreement. 9.4 Intentionally Omitted. 9.5 Closing under Stock Purchase Agreement. The Southwire Closing shall occur. 9.6 Operating Agreements. The parties thereto (other than persons under the control of Seller) shall have executed the Owners Agreement, the CAK limited liability operating agreement and the Glencore Parent Guarantee. Buyer shall have executed the Shared Services Agreement, the Environmental Access and Cooperation Agreement and the Groundwater Treatment Building Lease Agreement. ARTICLE X CLOSING 10.1 Closing. The closing of the sale of the Purchased Assets (the "Closing") shall take place at the offices of Curtis, Mallet-Prevost, Colt & Mosle LLP, 101 Park Avenue, New York, New York, or such other place as may be mutually agreed upon by the parties hereto. The date of the Closing is referred to as the "Closing Date." 10.2 Deliveries by Seller. At the Closing, Seller shall deliver or cause to be delivered to Buyer the following: (a) A certificate of the President, Vice President or other authorized officer of Seller confirming the satisfaction of the conditions set forth in Sections 8.1, 8.2 and 8.5 hereof. (b) A copy of all corporate resolutions authorizing the execution, delivery and performance by Century, CKI and NSA of this Agreement, and the consummation of the transactions contemplated herein, accompanied by the certification of the Secretaries of each of Century, CKI and NSA, respectively, to the effect that such resolutions are in full force and effect and have not been amended, modified or rescinded. (c) A copy of all corporate resolutions authorizing the execution, delivery and performance by CAK of the Owners Agreement, and the consummation of the transactions contemplated therein, accompanied by the certification of the Manager of CAK to the effect that such resolutions are in full force and effect and have not been amended, modified or rescinded. 12 17 (d) A copy of all corporate resolutions authorizing the execution, delivery and performance by NSA of the Owners Agreement, and the consummation of the transactions contemplated herein, accompanied by the certification of an officer of Metalsco, as General Partner of NSA, to the effect that such resolutions are in full force and effect and have not been amended, modified or rescinded. (e) Good standing certificates from the Secretary of State of Delaware for Century, CKI and CAK. (f) A good standing certificate from the Secretary of State of Kentucky for NSA. (g) A special warranty Deed for the Fifth Pot Line, and such other Deeds, Bills of Sale and Assignment and such other instruments of transfer as Buyer may request to convey and vest in Buyer all of Seller's right, title and interest in and to all of the remaining Purchased Assets and the Membership Interest, free and clear of liens arising by, through or under Century, CKI or NSA; provided that in no event shall Seller be required to deliver a Deed with respect to any Purchased Assets that purports to convey greater title to such Purchased Assets than was conveyed or warranted by Southwire to Seller. (h) Title Insurance Policy. (i) Copies of all closing documents under the Stock Purchase Agreement. (j) Original copies of the agreements referred to in Section 8.6, executed by all parties thereto other than those under the control of Glencore. (k) Written consent of Southwire, in form and substance reasonably satisfactory to Glencore, to the assignment by Seller of the interest specified in Section 2.2(c). 10.3 Deliveries by Glencore. At the Closing, Glencore will deliver or cause to be delivered to Seller the following: (a) A certificate of an authorized officer of Glencore confirming the satisfaction of the conditions set forth in Sections 9.1 and 9.2 as to representations, warranties and covenants of Glencore. (b) A copy of all corporate resolutions authorizing the execution, delivery and performance by Glencore of this Agreement, and the consummation of the transactions contemplated herein, accompanied by the certification of an authorized representative of Glencore to the effect that such resolutions are in full force and effect and have not been amended, modified or rescinded. (c) A copy of all corporate resolutions authorizing the execution, delivery and performance by Buyer of the Owners Agreement, and the consummation of the transactions contemplated herein, accompanied by the certification of the Manager of Buyer to the effect that such resolutions are in full force and effect and have not been amended, modified or rescinded. 13 18 (d) The Purchase Price, evidenced by a wire transfer of immediately available funds. (e) Original copies of the agreements referred to in Section 9.6, executed by all parties thereto other than persons under the control of Seller. 10.4 Transfer Costs. Seller and Buyer shall be liable for their pro rata share of (a) any fees and disbursements in connection with the transfer of the Purchased Assets and the Membership Interest as provided in Section 2.1, and (b) all property transfer taxes, including, without limitation, conveyance, sales, use and stamp taxes and any recording, registration, and other fees, which become payable in connection with the Closing of the transactions contemplated by this Agreement. Seller, after review and consent by Glencore, 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. Glencore and Buyer shall execute and deliver all instruments and certificates necessary to enable Seller to comply with the foregoing. Buyer shall complete and execute a resale or other exemption certificate with respect to the inventory items sold hereunder, and shall provide Seller with an executed copy thereof. 10.5 Further Assurances. Seller will, at any time on or after the Closing Date, take any and all steps reasonably requested by Glencore or Buyer to confirm title to Buyer of the Purchased Assets and the Membership Interest, and will do, execute, acknowledge and deliver all such further acts, deeds, conveyances, powers of attorney and assurances as may be required for the more effective transfer to Buyer, or its successors or assigns, of any of the Purchased Assets and the Membership Interest. ARTICLE XI INDEMNIFICATION 11.1 Southwire Indemnity. (a) The provisions in Sections 11.2, 11.3, 11.4, 11.5, 11.6, 11.7 and 11.8 relating to the indemnification by Seller and by Glencore apply only to Losses as specified therein and do not affect the obligations of Seller and Glencore with respect to claims for indemnification against Southwire under the Stock Purchase Agreement. Seller and Glencore agree that, with respect to claims for indemnification against Southwire under the Stock Purchase Agreement, and any recovery related thereto, CKI and Buyer shall share pro rata in such claims and recoveries; provided, however, that in the event that CKI or any of its Affiliates, on the one hand, or Buyer or any of its Affiliates, on the other hand, shall have incurred any Loss with respect to the subject matter of any such claim which is in excess of CKI's or Buyer's pro rata share of the total Loss relating thereto, then CKI or its Affiliate, or Buyer or its Affiliate, as the case may be, shall be entitled to a share of the recovery from Southwire equal to the total recovery multiplied by a fraction, the numerator of which is its Loss and the denominator of which is the total Loss. If for any reason there is no recovery from Southwire, then CKI and Buyer shall share pro rata in the Loss. 14 19 (b) Seller and Glencore agree that the assignment of rights under the Stock Purchase Agreement pursuant to Section 2.2(c) hereof is not intended to limit or decrease in any respect the indemnity amounts otherwise to be claimed from and owed by Southwire, and that the parties shall coordinate their claims so as to maximize recovery with respect thereto and shall take such additional actions in relation to such claims or any recovery as may be reasonable in order to maintain the pro rata sharing of the burdens and benefits of the operation of the Business contemplated herein. Century, CKI and NSA agree to use their commercially reasonable efforts to prosecute any claim for indemnification against Southwire under the Stock Purchase Agreement in accordance with its terms. In the event that Century, CKI or NSA shall fail or shall be unable for any reason whatsoever to so prosecute any such claim for indemnification against Southwire, in connection with the assignment by Seller of indemnification rights to Glencore or Buyer, such assignment shall contain a valid and binding irrevocable power of attorney or other document or instrument executed by Century, and coupled with an interest, in order to enable Glencore or Buyer to prosecute such claim. 11.2 Indemnification by Seller. Seller will indemnify, defend and hold harmless Glencore and its officers, directors and Affiliates from, against, and with respect to any and all action or cause of action, loss, damage, claim, obligation, liability, penalty, fine, cost and expense (including, without limitation, reasonable attorneys' and consultants' fees and costs and expenses incurred in investigating, preparing, defending against or prosecuting any litigation, claim, proceeding, demand or request for action by any governmental or administrative entity), of any kind or character (a "Loss") arising out of or in connection with any of the following: (a) any breach of any of the representations or warranties of Seller contained in or made pursuant to this Agreement; (b) any failure by Seller to perform or observe, or to have performed or observed, in full, any covenant, agreement or condition to be performed or observed by it pursuant to this Agreement; (c) the Excluded Liabilities; and (d) any claims by any beneficiary under any guarantees provided by Century or an Affiliate in connection with the Owners Agreement. As used in this Article XI, the term "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. 11.3 Indemnification by Glencore. Glencore will indemnify, defend and hold harmless Seller and each of their officers, directors and Affiliates from, against and with respect to any Loss arising out of or in connection with any of the following: (a) any breach of any of the representations and warranties of Glencore contained in or made pursuant to this Agreement; 15 20 (b) any failure by Glencore or Buyer to perform or observe, or to have performed or observed, in full, any covenant, agreement or condition to be performed or observed by it pursuant to this Agreement; (c) the Assumed Liabilities; and (d) any claims by any beneficiary under any guarantees provided by Glencore or an Affiliate in connection with the Owners Agreement. 11.4 Indemnification Threshold. Neither party will be entitled to indemnification under Section 11.2(a) and (b) and Section 11.3(a) and (b) hereof until such party has sustained aggregate Losses under such Sections in excess of One Hundred Thousand US Dollars (US$100,000.00) (the "Threshold"). If either party suffers indemnifiable Losses in excess of the Threshold, such party will be entitled to indemnification hereunder with respect to the aggregate amount of all such indemnifiable Losses and not merely the amount in excess of the Threshold. 11.5 Time Limits on Indemnification. Neither party will have liability to the other party for indemnification under Section 11.2(a) and Section 11.3(a) hereof unless notice of the Loss is given by the Indemnified Party to the Indemnifying Party within two (2) years of the Closing Date. 11.6 Notice of Third Party Claim. A party that may be entitled to be indemnified pursuant to Section 11.2 or 11.3 (the "Indemnified Party") shall promptly notify the other party (the "Indemnifying Party") in writing within 15 days of notice thereof of any pending or threatened claim or demand asserted by a third party which the Indemnified Party has determined has given or could give rise to a right of indemnification under this Agreement ("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 XI 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 satisfy or contest its obligations under this Article XI within 15 days after the receipt of written notice thereof from the Indemnified Party. If the Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party hereunder against any Losses that may result from a 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 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, 16 21 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). 11.7 Claims between Buyer and Seller. Glencore and Seller shall attempt to resolve between themselves any claims for indemnification hereunder not a result of a Third Party Claim. The notification provisions of Section 11.6 shall also apply to claims between Glencore and Seller. Any disputes not resolved within 90 days of notice shall be settled by arbitration as provided in Section 13.9. 11.8 Dollar Limit on Indemnification by Seller and Glencore. Notwithstanding anything to the contrary contained in this Agreement, the maximum aggregate amount of indemnifiable Losses which may be recovered from Seller or their Affiliates or Glencore or its Affiliates, as the case may be, arising out of or resulting from the causes enumerated in Sections 11.2(a)(with the exception of any Losses relating to or arising from the breach of any representation or warranty contained in Sections 4.1, 4.2 and 4.3) or 11.3(a) (with the exception of any Losses relating to or arising from the breach of any representation or warranty contained in Sections 5.1, 5.2 and 5.3), shall be an amount equal to Ten Million US Dollars (US$10,000,000.00). 11.9 Exclusive Remedies. Except as provided in Section 13.14 hereof (specific performance) or in respect of injunctive relief to the extent available, the parties hereto acknowledge and agree that following the Closing the indemnification provisions of this Article XI shall be the sole and exclusive remedies of, on the one hand, Seller and each of their Affiliates against Glencore and its Affiliates, and on the other hand, Glencore and its Affiliates against Seller and each of their Affiliates, for any breach of the representations, warranties, covenants or agreements of Seller or Glencore, as the case may be, hereunder. ARTICLE XII TERMINATION 12.1 Termination. This Agreement may be terminated at any time prior to the Closing: (a) By the mutual written consent of Seller and Glencore; (b) By Seller (if Seller is not then in breach of any term of this Agreement), if Glencore (i) fails to perform in any material respect its agreements contained herein required to be performed on or prior to the Closing Date, or (ii) materially breaches any of its representations or warranties contained herein, which failure or breach is not cured within ten days after Seller has notified Glencore of its intent to terminate this Agreement pursuant to this subparagraph; 17 22 (c) By Glencore (if Glencore is not then in breach of any term of this Agreement), if Seller (i) fails to perform in any material respect its agreements contained herein required to be performed on or prior to the Closing Date, or (ii) materially breaches any of its representations or warranties contained herein , which failure or breach is not cured within ten days after Glencore has notified Seller of its intent to terminate this Agreement pursuant to this subparagraph; or (d) By either Seller or Glencore, if there is any order, writ, injunction or decree of any court or governmental or regulatory agency binding on Seller or Glencore which prohibits or restrains Seller or Glencore from consummating the transactions contemplated hereby. 12.2 Effect on Obligations. Termination of this Agreement pursuant to this Article shall terminate all obligations of the parties hereunder, except for the obligations under Sections 13.3 (with respect to expenses), 13.4 (with respect to publicity) and 7.4 (with respect to confidentiality); provided, however, that termination pursuant to Sections 12.1(b) or (c) will not relieve the defaulting or breaching party from any liability to the other party hereto. In the event of termination under Section 12.1(c), Buyer will have the rights and remedies with respect to specific performance as set forth in Section 13.14 hereof, in addition to any other remedies that may be available at law or in equity. ARTICLE XIII MISCELLANEOUS 13.1 Bulk Sales. The parties agree to waive the requirements, if any, of all applicable bulk sales laws. 13.2 Intentionally Omitted. 13.3 Expenses. Except as provided in Section 10.4 (Transfer Costs), Glencore shall reimburse to Seller Glencore's pro rata share of all fees, costs and expenses incurred in connection with (a) the Stock Purchase Agreement and the transactions contemplated thereby and (b) this Agreement and the transactions contemplated hereby; provided, however, that such fees, costs and expenses (i) incurred by Seller prior to February 14, 2001 which are reimbursed by Glencore shall not exceed Four Hundred Thousand US Dollars (US$400,000), and (ii) shall not include any fees, costs and expenses attributable to the financing by Seller of its share of the purchase price payable to Southwire for the Plant, such as fees and expenses of investment bankers and other advisors engaged by Seller, and legal counsel of Seller or to the investment bankers, the bond trustee, the bank lenders or Glencore engaged in connection with Seller's mortgage bond or bank lending facilities or issuance of preferred stock. Except as set forth in this Section 13.3 or in Section 10.4, each party shall bear its own fees, costs and expenses incurred in connection with the transactions contemplated hereby. 13.4 Publicity. 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 communicate with any news media without the prior written consent of the other party, and the parties shall 18 23 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 party of such requirement (and provide a copy of such announcement to the other party) as soon as practicable in advance of such announcement and, to the extent practical, take the views of the other party in respect of such announcement into account prior to making such announcement. 13.5 Best Efforts. Each party hereto agrees to use its best efforts to satisfy the conditions to the Closing set forth in this Agreement and otherwise to consummate the transactions contemplated by this Agreement. 13.6 Notices. All notices, demands and other communications made hereunder will be in writing and shall be given either by personal delivery, by nationally recognized overnight courier (with charges prepaid) or by telecopy (with telephone confirmation), and will be deemed to have been given or made when personally delivered, the day following the date deposited with such overnight courier service or when transmitted to telecopy machine and confirmed by telephone, addressed to the respective parties at the following addresses (or such other address for a party as shall be specified by like notice): If to Seller: Century Aluminum Company 2511 Garden Road Building A, Suite 200 Monterey, CA 93940 Attention: Gerald J. Kitchen Facsimile No.: (831) 642 9328 If to Glencore: Glencore AG c/o Glencore Ltd. 301 Tresser Boulevard Stamford, Connecticut 06901-3244 Attention: Aluminum Department Facsimile No.: (203) 978-2600 13.7 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. 13.8 Dispute Resolution. Any controversy or claim arising out of or relating to this Agreement, or any breach thereof, shall be settled by arbitration administered by the American Arbitration Association in New York City under its Commercial Arbitration Rules. The panel of arbitrators shall consist of three arbitrators. Each party shall select one arbitrator and the two selected arbitrators shall select a third to complete the panel. Judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The determination of the arbitrators shall be final and binding on the parties. 19 24 13.9 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. 13.10 Assignment. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither this Agreement nor any of the rights, interest or obligations hereunder may be assigned by any of the parties hereto without the prior written consent of all other parties hereto, and any purported assignment without such consent shall be void. 13.11 Third Party Beneficiaries. None of the provisions of this Agreement or any document contemplated hereby is intended to grant any right or benefit to any person or entity which is not a party to this Agreement. 13.12 Headings. The Article and Section headings contained in this Agreement are solely for the purpose of reference, are not part of this Agreement and shall not in any way affect the meaning or interpretation of this Agreement. 13.13 Amendments. Any waiver, amendment, modification or supplement of or to any term or condition of this Agreement will be effective only if in writing and signed by all parties hereto and the parties hereto waive the right to amend the provisions of this Section orally. 13.14 Specific Performance. Seller acknowledges that the Purchased Assets and the Membership Interest are unique and that if Seller fails to consummate the transactions contemplated by this Agreement such failure will cause irreparable harm to Glencore for which there will be no adequate remedy at law. Glencore shall be entitled, in addition to its other remedies pursuant to Article XI hereof, to specific performance of this Agreement if Seller will, without cause, refuse to consummate the transactions contemplated by this Agreement. 13.15 Access to Records. After the Closing, each of Buyer and Seller will permit the other and its counsel, accountants and other representatives reasonable access at such times as Buyer and Seller may agree to records relating to the Plant, its operation or the Business for accounting, financial, and tax purposes. 13.16 Severability. In the event that any provision in this Agreement shall be determined to be invalid, illegal or unenforceable in any respect, the remaining provisions of this Agreement will not be in any way impaired, and the illegal, invalid or unenforceable provision shall be fully severed from this Agreement and there will be automatically added in lieu thereof a provision as similar in terms and intent to such severed provision as may be legal, valid and enforceable. 13.17 Entire Agreement. This Agreement and the Schedules and Exhibits hereto constitute the entire contract between the parties hereto pertaining to the subject matter hereof, and supersede all prior and contemporaneous agreements and understandings between the parties with respect to such subject matter (including, without limitation, the letter agreement dated February 23, 2001 between Seller and Glencore). 20 25 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be signed by its duly authorized officer or representative as of the date first above written. CENTURY ALUMINUM COMPANY By: ________________________________ Name:______________________________ Title:_______________________________ CENTURY KENTUCKY, INC. By: ________________________________ Name:______________________________ Title: ______________________________ NSA, LTD. By: ________________________________ Name:______________________________ Title: ______________________________ GLENCORE AG By: ________________________________ Name:_______________________________ Title:_______________________________ 26 EXHIBIT A Stock Purchase Agreement 27 EXHIBIT B CAK Assets All Intellectual Property (as such term is defined in the Stock Purchase Agreement) sold or assigned to Century pursuant to the Stock Purchase Agreement. Contract rights assigned to Century pursuant to the Stock Purchase Agreement with request to the following contracts (each as defined in the Stock Purchase Agreement): Alumina Supply Agreement Coke Supply Agreement Pitch Supply Agreement Power Contract 28 EXHIBIT C Owners Agreement 29 EXHIBIT D Fifth Pot Line Description [SEE DEED FROM NSA TO GLENCORE ACQUISITION I LLC] 30 EXHIBIT E Excluded Assets [SEE DESCRIPTION OF POTLINES 1-4 IN MORTGAGE] 31 EXHIBIT F Allocation of Purchase Price With respect to Buyer's acquisition of the Purchased Assets and the Membership Interest, within sixty (60) calendar days following the Closing Date, the Buyer shall deliver to Seller a schedule (the "Allocation Schedule") allocating the purchase price among the Purchased Assets and the Membership Interest. If Seller in good faith determines that there is a reasonable basis that any of the allocations or computations reflected on the Allocation Schedule are materially incorrect, Seller and Buyer will attempt in good faith to promptly agree on a revised Allocation Schedule. If the parties cannot resolve any such dispute within thirty (30) business days of the delivery by Seller of the Allocation Schedule to Buyer, the items remaining in dispute shall be submitted to an internationally recognized accounting firm acceptable to Buyer and Seller, which may be a firm representing either Buyer or Seller (the "Accounting Firm") If the Accounting Firm determines that the items remaining in dispute are not materially incorrect, then Seller and Buyer shall be bound by the allocation prepared by Buyer. If the Accounting Firm determines that one or more items remaining in dispute are materially incorrect, then Seller and Buyer shall be bound by the allocation of such items as determined by the Accounting Firm. The Accounting Firm shall make any such determination within thirty (30) business days after submission of the remaining disputed items. 32 SCHEDULE 4.3 Conflicts, breaches or acceleration of existing obligations as a result of the execution of the Asset Purchase Agreement, Owners Agreement and Seller's Parent Guarantee None. 33 SCHEDULE 4.4 Required consents, approvals, authorizations or filings with any governmental authority in relation to the execution of the Asset Purchase Agreement, Seller's Parent Guarantee and the Owners Agreement. None. EX-3.1 4 y47973ex3-1.txt CERTIFICATE OF DESIGNATION OF REGISTRANT 1 Exhibit 3.1 CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF 8% CUMULATIVE CONVERTIBLE PREFERRED STOCK OF CENTURY ALUMINUM COMPANY CENTURY ALUMINUM COMPANY (the "Company"), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify that, pursuant to the authority conferred upon the Board of Directors of the Company by the Certificate of Incorporation of the Company and pursuant to Section 151 of the General Corporation Law of the State of Delaware, a Committee of the Board of Directors of the Company, at a meeting duly held on March 28, 2001, duly adopted resolutions authorizing a series of the Company's previously authorized Preferred Stock, par value $0.01 per share with the following preferences and rights: SECTION 1. Designation, Amount and Par Value. The series of Preferred Stock shall be designated as the 8% Cumulative Convertible Preferred Stock (the "Preferred Stock"), and the number of shares so designated shall be 500,000. The par value of each share of Preferred Stock shall be $0.01. Each share of Preferred Stock shall have a stated value of $50.00 per share (the "Stated Value"). SECTION 2. Dividends. (a) Holders of Preferred Stock shall be entitled to receive and the Company shall pay, when, as and if declared by the Board of Directors out of funds legally available therefor, cumulative cash dividends at the rate per share (as a percentage of the Stated Value per share) equal to 8% per annum, payable quarterly in arrears on each March 31, June 30, September 30 and December 31 (each, a "Dividend Payment Date") and on the Conversion Date (as hereinafter defined). Dividends on the Preferred Stock shall accrue daily commencing on the Original Issue Date (as defined in Section 7) and shall be deemed to accrue whether or not earned or declared and whether or not there are profits, surplus or other funds of the Company legally available for the payment of dividends. The person that is shown on the Company's records as the holder of the Preferred Stock on an applicable record date (the "Holder") for any dividend payment will be entitled to receive such dividend payment and any other accrued and unpaid dividends which accrued prior to such Dividend Payment Date, without regard to any sale or disposition of such Preferred Stock subsequent to the applicable record date but prior to the applicable Dividend Payment Date. Except as otherwise provided herein, if at any time the Company pays less than the total amount of dividends then accrued on the Preferred Stock, such payment shall be distributed ratably among the Holders of the Preferred Stock based upon the number of shares held by each Holder. (b) So long as any Preferred Stock shall remain outstanding, unless all accrued dividends payable on the Preferred Stock for all prior Dividend Payment Dates shall have been paid, neither the Company nor any subsidiary thereof shall redeem, purchase or otherwise acquire, directly or indirectly, any Common Stock (as defined in Section 5) or any shares of any other capital stock of the Company, ranking junior to the Preferred Stock in respect of dividends or liquidation preference, except the repurchase of shares of capital stock of the Company held by officers, directors or employees or former officers, directors or employees (or 2 their estates or beneficiaries), upon death, disability, retirement, severance or termination of employment, or in order to satisfy tax withholding obligations of such persons upon the exercise of options or the vesting of performance shares or pursuant to any agreement under which such shares were issued, nor shall the Company directly or indirectly pay or declare any cash dividend or make any cash distribution (other than a dividend or distribution described in Section 5) upon, nor shall any cash distribution be made in respect of, any Common Stock or any other capital stock of the Company ranking junior to the Preferred Stock in respect of dividends or liquidation preference, nor shall any monies be set aside for or applied to the purchase or redemption (through a sinking fund or otherwise) of any Common Stock or any shares of any other capital stock of the Company, ranking junior to the Preferred Stock in respect of dividends or liquidation preference, except as described above. SECTION 3. Voting Rights. Except as otherwise provided herein and as otherwise provided by law, the Preferred Stock shall have no voting rights. So long as any shares of Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the Holders of a majority of the shares of Preferred Stock then outstanding, (i) alter or change adversely the powers, preferences or rights given to the Preferred Stock, through an amendment to the Company's Certificate of Incorporation or otherwise, (ii) authorize or create any class of stock ranking as to dividends or distribution of assets upon a Liquidation (as defined below) senior to, prior to or pari passu with the Preferred Stock, or (iii) reorganize or reclassify the capital stock of the Company or merge or consolidate with or into any other company or entity. SECTION 4. Liquidation. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a "Liquidation"), the Holders of shares of Preferred Stock shall be entitled to receive out of the assets of the Company, whether such assets are capital or surplus, for each share of Preferred Stock an amount equal to the Stated Value, plus an amount equal to the then accrued but unpaid dividends per share, whether declared or not, but without interest ("Liquidation Preference"), before any distribution or payment shall be made to the holders of Common Stock or any other capital stock of the Company junior in respect of distribution of assets, and if the assets of the Company shall be insufficient to pay in full such amounts, then the entire assets to be distributed shall be distributed among the Holders of Preferred Stock ratably in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. A sale, conveyance or disposition of all or substantially all of the assets of the Company, other than to a domestic subsidiary of the Company, shall be deemed a Liquidation; however, a consolidation or merger of the Company with or into any other company or companies shall not be treated as a Liquidation, but instead shall be subject to the provisions of Section 5. The Company shall mail written notice of any such Liquidation, not less than 30 days prior to the payment date stated therein, to each record Holder of Preferred Stock. SECTION 5. Conversion. (a) Right to Convert. Each Holder of the Preferred Stock shall have the right at any time and from time to time, at the option of such Holder, to convert any or all Preferred Stock held by such Holder, into such number of fully paid, validly issued and nonassessable shares of common stock, par value $0.01 per share, of the Company ("Common Stock"), free and clear of any liens, claims or encumbrances created by the Company, as is determined by dividing -2- 3 (i) the Liquidation Preference times the number of shares of Preferred Stock being converted ("Conversion Amount"), by (ii) the applicable Conversion Price (determined as hereinafter provided) in effect on the Conversion Date. Immediately following such conversion, the rights of the Holders of converted Preferred Stock shall cease and the persons entitled to receive the Common Stock upon the conversion of Preferred Stock shall be treated for all purposes as then having become the owners of such Common Stock. The right to convert any shares of Preferred Stock called for redemption under Section 6 shall continue until and shall expire at 4:30 New York time on the last business day prior to the redemption date. Any conversion of Preferred Stock by any Holder shall be of a minimum number of 1,000 shares of Preferred Stock, except in the event that any Holder holds less than 1,000 shares of Preferred Stock, in which case, all such shares held by such Holder may be converted. (b) Mechanics of Conversion. To convert Preferred Stock into Common Stock, the Holder shall give written notice ("Conversion Notice") to the Company (which Conversion Notice may be given by facsimile transmission no later than the Conversion Date) stating that such Holder elects to convert the same and shall state therein the number of shares of Preferred Stock to be converted and the name or names in which such Holder wishes the certificate or certificates for Common Stock to be issued (the conversion date specified in such Conversion Notice shall be referred to herein as the "Conversion Date"). As soon as possible after delivery of the Conversion Notice, such Holder shall surrender the certificate or certificates representing the Preferred Stock being converted, duly endorsed, at the office of the Company or, if identified in writing to all the Holders by the Company, at the offices of any transfer agent for the Preferred Stock. The Company shall, upon receipt of such Conversion Notice, issue and deliver to or upon the order of such Holder, against delivery of the certificates representing the Preferred Stock which have been converted, a certificate or certificates for the number of shares of Common Stock to which such Holder shall be entitled (with the number of and denomination of such certificates designated by such Holder), and the Company shall immediately issue and deliver to such Holder a certificate or certificates for the number of shares of Preferred Stock (including any fractional shares) which such Holder has not yet elected to convert hereunder but which are evidenced in part by the certificate(s) delivered to the Company in connection with such Conversion Notice. The Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless certificates evidencing such shares of the Preferred Stock being converted are either delivered to the Company or its transfer agent or the Holder notifies the Company or any such transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement reasonably satisfactory to the Company to indemnify the Company from any loss incurred by it in connection therewith. In lieu of delivering physical certificates representing the Common Stock issuable upon conversion of Preferred Stock, provided the Company's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer program, upon request of the Holder, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion to the Holder, by crediting the account of the Holder's prime broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system. The parties agree to coordinate with DTC to accomplish this objective. The conversion pursuant to this Section 5 shall be deemed to have been made immediately prior to the close of business on the Conversion Date. The person or persons entitled to receive the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Stock at the close of business on the Conversion Date. The Company's obligation to -3- 4 issue Common Stock upon conversion of Preferred Stock shall, except with respect to the Holder's compliance with the notice and delivery requirements set forth above in this Section 5(b), be absolute, is independent of any covenant of the Holder of Preferred Stock, and shall not be subject to: (i) any offset or defense, or (ii) any claims against the Holders of Preferred Stock whether pursuant to this Certificate of Designation, the Purchase Agreement (as defined in Section 7) or otherwise. In the event that the Company disputes the Holder's computation of the number of shares of Common Stock to be received, then the Company shall deliver to the Holder the number of shares of Common Stock not in dispute and shall seek to mutually agree with the Holder in good faith on the correct number of shares to be received. (c) Determination of Conversion Price. The Conversion Price applicable with respect to the Preferred Stock (the "Conversion Price"), subject to the adjustments set forth below, shall be $17.92 per share. (d) Stock Splits; Dividends; Adjustments. (i) If the Company, at any time while the Preferred Stock is outstanding shall, (A) pay a stock dividend or otherwise make a distribution or distributions on any equity securities (including instruments or securities convertible into or exchangeable for such equity securities) in shares of Common Stock, (B) subdivide outstanding Common Stock into a larger number of shares, or (C) combine outstanding Common Stock into a smaller number of shares, then the Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately before such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 5(d)(i) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination. (ii) In the event that the Company issues or sells any Common Stock or securities which are convertible into or exchangeable for its Common Stock (other than the Preferred Stock), or any warrants or other rights to subscribe for or to purchase or any options for the purchase of its Common Stock ("Convertible Securities") (other than shares or options issued or which may be issued pursuant to (A) the Company's current or future employee or director stock incentive or option plans or shares issued upon exercise of options, warrants or rights or upon the vesting of performance shares outstanding on the date of the Purchase Agreement and listed in the Company's most recent periodic report filed under the Securities Exchange Act of 1934, as amended, (B) arrangements with the Holders of Preferred Stock, or (C) upon the conversion of the Preferred Stock) ("Exempted Issuances") at an effective purchase price per share which is less than the Per Share Market Value (as defined in Section 7) of the Common Stock on the Trading Day next preceding such issue or sale or, in the case of issuances to holders of its Common Stock, the record date fixed for the determination of stockholders entitled to receive Common Stock or Convertible Securities (the "Fair Market Price"), the Conversion Price in effect immediately prior to such issue or sale or record date, as applicable, shall be reduced effective concurrently with such issue or sale to an amount -4- 5 determined by multiplying the Conversion Price then in effect by a fraction, (1) the numerator of which shall be the sum of (x) the number of shares of Common Stock outstanding immediately prior to such issue or sale and (y) the number of shares of Common Stock which the aggregate consideration received by the Company for such additional shares would purchase at the Fair Market Price, and (2) the denominator of which shall be the number of shares of Common Stock and Convertible Securities of the Company outstanding immediately after such issue or sale. For the purposes of the foregoing adjustment, shares of Common Stock owned by or held on account of the Company or any subsidiary shall not be deemed outstanding for the purpose of any such computation. In addition, for the purposes of the foregoing adjustment, in the case of the issuance of any Convertible Securities, the maximum number of shares of Common Stock issuable upon exercise, exchange or conversion of such Convertible Securities shall be deemed to be outstanding, and the aggregate consideration received by the Company for the issuance or sale of such Convertible Securities shall be deemed to include any consideration that would be received by the Company in connection with the exercise, exchange or conversion of such Convertible Securities, provided that no further adjustment shall be made upon the actual issuance of Common Stock upon exercise, exchange or conversion of such Convertible Securities. However, upon the expiration of any right or warrant to purchase Common Stock the issuance of which resulted in an adjustment in the Conversion Price designated in Section 5(c) pursuant to this Section 5(d)(ii), if any such right or warrant shall expire and shall not have been exercised, the Conversion Price designated in Section 5(c) shall immediately upon such expiration be recomputed and effective immediately upon such expiration be increased to the price which it would have been (but reflecting any other adjustments in the Conversion Price made pursuant to the provisions of this Section 5 after the issuance of such rights or warrants) had the adjustment of the Conversion Price made upon the issuance of such rights or warrants been made on the basis of offering for subscription or purchase only that number of shares of Common Stock actually purchased upon the exercise of such rights or warrants actually exercised. (iii) If the Company, at any time while the Preferred Stock is outstanding, shall distribute to all holders of Common Stock evidence of its indebtedness or assets or cash (other than ordinary cash dividends) or rights or warrants to subscribe for or purchase any security of the Company or any of its subsidiaries (excluding those referred to in Sections 5(d)(i) or 5(d)(ii) above), then concurrently with such distributions to holders of Common Stock, the Company shall distribute to Holders of the Preferred Stock, the amount of such indebtedness, assets, cash or rights or warrants which the Holders of Preferred Stock would have received had they converted all their Preferred Stock into Common Stock immediately prior to the record date for such distribution. (iv) All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. (v) Whenever the Conversion Price is adjusted pursuant to this Section 5(d), the Company shall promptly mail to each Holder of Preferred Stock, a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. -5- 6 (vi) No adjustment in the Conversion Price shall reduce the Conversion Price below the then par value of the Common Stock. (vii) The Company from time to time may reduce the Conversion Price by any amount for any period of time if the period is at least 20 Trading Days and if the reduction is irrevocable during the period. Whenever the Conversion Price is reduced, the Company shall mail to the Holders of Preferred Stock a notice of the reduction. The Company shall mail, first class, postage prepaid, the notice at least 15 days before the date the reduced Conversion Price takes effect. The notice shall state the reduced Conversion Price and the period it will be in effect. A reduction of the Conversion Price does not change or adjust the Conversion Price otherwise in effect for purposes of Section 5(d)(i), (ii), or (iii). (viii) If: A. In the event of any taking by the Company of a record date of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, any security or right convertible into or entitling the holder thereof to receive additional shares of Common Stock, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right; or B. The Company shall declare a special nonrecurring cash dividend on or a redemption of its Common Stock; or C. The approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock of the Company (other than a subdivision or combination of the outstanding shares of Common Stock), any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; or D. The Company shall authorize the voluntary or involuntary dissolution, liquidation or winding-up of the affairs of the Company; then the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of Preferred Stock, and shall cause to be mailed to the Holders of Preferred Stock at their last addresses as they shall appear upon the stock books of the Company, at least 15 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer, share -6- 7 exchange, dissolution, liquidation or winding-up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, share exchange, dissolution, liquidation or winding-up; provided, however, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. (e) Reorganization, Merger or Going Private. In case of any reorganization or reclassification of the capital stock of the Company, any consolidation or merger of the Company with or into another person, any compulsory share exchange pursuant to which the Common Stock is converted into other securities, cash or property or a "going private" transaction under Rule 13e-3 promulgated pursuant to the Exchange Act, the Holders of the Preferred Stock then outstanding shall be deemed to have converted their Preferred Stock into Common Stock immediately prior to such reorganization, reclassification, consolidation, merger or share exchange and shall have the right thereafter to convert such shares only into the shares of stock and other securities and property receivable upon or deemed to be held by holders of Common Stock following such reorganization, reclassification, consolidation, merger or share exchange, and the Holders of the Preferred Stock shall be entitled upon such event to receive such amount of securities or property as the shares of the Common Stock of the Company into which such shares of Preferred Stock could have been converted immediately prior to such reorganization, reclassification, consolidation, merger or share exchange would have been entitled. The terms of any such reorganization, reclassification, consolidation, merger or share exchange shall include such terms so as to continue to give to the Holder of Preferred Stock the right to receive the securities or property set forth in this Section 5(e) upon any conversion following such reorganization, reclassification, consolidation, merger or share exchange. This provision shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, or share exchanges. (f) Other Actions. The Company will not avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company and will at all times in good faith assist in the carrying out of all of the provisions of this Section 5 and in the taking of all action as may be necessary or appropriate in order to protect the conversion rights of the Holders of the Preferred Stock against impairment. (g) Reservation of Shares. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued Common Stock solely for the purpose of issuance upon conversion of Preferred Stock as herein provided, free from preemptive rights or any other contingent purchase rights of persons other than the Holders of Preferred Stock, such number of shares of Common Stock as shall be issuable (taking into account the adjustments of Section 5(d) hereof) upon the conversion of all outstanding shares of Preferred Stock. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid and nonassessable. The Company promptly will take such corporate action as may, in the opinion of its counsel, which may be an employee of the Company, be necessary to increase its authorized but unissued shares -7- 8 of Common Stock to such number of shares as shall be sufficient for such purpose, including without limitation engaging in best efforts to obtain the requisite stockholder approval. (h) Fractional Shares. Upon a conversion hereunder the Company shall not be required to issue stock certificates representing fractions of shares of Common Stock, but may if otherwise permitted by applicable law, make a cash payment in respect of any final fraction of a share based on the Per Share Market Value at such time. If the Company elects not, or is unable, to make such a cash payment, the Holder of a share of Preferred Stock shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock. (i) Taxes. The issuance of certificates for shares of Common Stock on conversion of Preferred Stock shall be made without charge to the Holders thereof for any documentary, stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of such shares of Preferred Stock so converted and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. (j) Status of Converted or Redeemed Shares. Shares of Preferred Stock converted into Common Stock or redeemed shall be canceled and shall have the status of authorized but unissued shares of Preferred Stock. (k) Giving of Notice. Each Conversion Notice shall be given (i) by facsimile and by mail, postage prepaid, addressed to the attention of the Chief Financial Officer of the Company at the facsimile telephone number and address of the principal place of business of the Company, (ii) by overnight courier or (iii) by hand. Any such notice shall be deemed given and effective upon the earliest to occur of (1)(a) if such Conversion Notice is delivered via facsimile prior to 4:30 p.m. (local time in New York, NY) on any date, such date or such later date as is specified in the Conversion Notice, and (b) if such Conversion Notice is delivered via facsimile after 4:30 p.m. (local time in New York, NY) on any date, the next date or such later date as is specified in the Conversion Notice, (2) if such Conversion Notice is delivered by overnight courier, two business days after delivery to a nationally recognized overnight courier service or (3) if such Conversion Notice is delivered by hand, upon actual receipt. SECTION 6. Redemption. The Company may, at the option of the Board of Directors, redeem all or any part of the outstanding Preferred Stock at any time after the third anniversary of the Original Issue Date, by paying for each share so redeemed the redemption prices listed below, together with an amount equal to all cumulative dividends accrued and unpaid thereon to the date fixed for redemption, provided that notice of redemption is sent by certified mail to the Holders of the Preferred Stock to be redeemed at least 40 but not more than 60 days prior to the date of redemption specified in such notice, addressed to each such Holder at his/her address as it appears in the records of the Company. On or after the redemption date, each Holder of shares of Preferred Stock to be redeemed shall present and surrender his/her certificate or certificates for such shares to the Company at the place designated in such notice and thereupon the redemption -8- 9 price of such shares shall be paid to or to the order of the person whose name appears on such certificate or certificates as the owner thereon and each surrendered certificate shall be cancelled. In case less than all the shares represented by any such certificates are redeemed, a certificate shall be issued representing the unredeemed shares. From and after the redemption date (unless default shall be made by the Company in payment of the redemption price) all dividends on the shares of Preferred Stock designated for redemption in such notice shall cease to accrue, and all rights of the Holders thereof as stockholders of the Company, except the right to receive the redemption price thereof upon the surrender of certificates representing the same, without interest, shall cease and terminate and such shares shall not thereafter be transferred (except with the consent of the Company) on the books of the Company, and such shares shall not be deemed to be outstanding for any purpose whatsoever. At its election, the Company prior to the redemption date may deposit the redemption price of the shares of Preferred Stock so called for redemption in trust for the Holders thereof with a bank or trust company (having a capital and surplus of not less than $500,000,000) in which case such notice to Holders of the Preferred Stock to be redeemed shall state the date of such deposit, shall specify the office of such bank or trust company as the place of payment of the redemption price, and shall call upon such Holders to surrender the certificates representing such shares at such price on or after the date fixed in such redemption notice (which shall not be later than the redemption date) against payment of the redemption price. From and after the making of such deposit, the shares of Preferred Stock so designated for redemption shall not be deemed to be outstanding for any purpose whatsoever, and the rights of the Holders of such shares shall be limited to the right to receive the redemption price of such shares, without interest, upon surrender of the certificates representing the same to the Company at said office of such bank and trust company, and the right of conversion (on or before the close of business on the last business day prior to the date fixed for redemption) herein provided. Any funds so deposited which shall not be required for such redemption because of the exercise of such right of conversion after the date of such deposit shall be returned to the Company. Any interest accrued on such funds shall be paid to the Company from time to time. Any moneys so deposited which shall remain unclaimed by the Holders of such Preferred Stock at the end of three years after the redemption date shall be returned by such bank or trust company to the Company after which the Holders of the Preferred Stock shall look only to the Company for payment of the redemption price. In the event that less than all the outstanding shares of Preferred Stock are to be redeemed at one time, the shares so to be redeemed shall be redeemed pro rata. The prices at which each share of Preferred Stock may be redeemed during the periods set forth below are as follows: Prior to the third anniversary of the Original Issue Date: No right to redeem. After the third anniversary of the Original Issue Date but before the fourth anniversary of the Original Issue Date: $52.00 together with an amount equal to all cumulative dividends accrued and unpaid thereon to the date of redemption. After the fourth anniversary of the Original Issue Date but before the fifth anniversary of the Original Issue Date: $51.60 together with an amount equal to all cumulative dividends accrued and unpaid thereon to the date of redemption. -9- 10 After the fifth anniversary of the Original Issue Date but before the sixth anniversary of the Original Issue Date: $51.20 together with an amount equal to all cumulative dividends accrued and unpaid thereon to the date of redemption. After the sixth anniversary of the Original Issue Date but before the seventh anniversary of the Original Issue Date: $50.80 together with an amount equal to all cumulative dividends accrued and unpaid thereon to the date of redemption. After the seventh anniversary of the Original Issue Date but before the eighth anniversary of the Original Issue Date: $50.40 together with an amount equal to all cumulative dividends accrued and unpaid thereon to the date of redemption. After the eighth anniversary of the Original Issue Date: $50.00 together with an amount equal to all cumulative dividends accrued and unpaid thereon to the date of redemption. SECTION 7. Definitions. For the purposes hereof, the following terms shall have the following meanings: "Original Issue Date" shall mean the date of the first issuance of any shares of Preferred Stock regardless of the number of transfers of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred Stock. "Per Share Market Value" means on any particular date (a) the closing sales price per share of the Common Stock on such date on The Nasdaq Stock Market or if the Common Stock is not listed on The Nasdaq Stock Market, on such other stock exchange on which the Common Stock has been listed or if there is no such price on such date, then the closing sales price on such exchange on the date nearest preceding such date, or (b) if the Common Stock is not listed on The Nasdaq Stock Market or any stock exchange, the closing sales price for a share of Common Stock in the over-the-counter market, as reported by the NASD at the close of business on such date, or (c) if the Common Stock is not quoted on the NASD, the closing sales price for a share of Common Stock in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), or (d) if the Common Stock is no longer publicly traded the fair market value of a share of Common Stock as determined by a nationally recognized or major regional investment banking firm or firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Company)(an "Appraiser") selected in good faith by the Holders of a majority of the shares of the Preferred Stock; provided, however, that the Company, after receipt of the determination by such Appraiser, shall have the right to select an additional Appraiser, in which case, the fair market value shall be equal to the average of the determinations by each such Appraiser. -10- 11 "Purchase Agreement" means the Cumulative Convertible Preferred Stock Purchase Agreement, dated as of the Original Issue Date, between the Company and the original Holder of the Preferred Stock. "Trading Day" means (a) a day on which the Common Stock is traded on The Nasdaq Stock Market or principal stock exchange on which the Common Stock is then listed, or (b) if the Common Stock is not listed on The Nasdaq Stock Market or any stock exchange, a day on which the Common Stock is traded in the over-the-counter market, as reported by the NASD, or (c) if the Common Stock is not quoted on The Nasdaq Stock Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices). IN WITNESS WHEREOF, Century Aluminum Company has caused this certificate to be signed by Gerald J. Kitchen, its Executive Vice President, General Counsel and Chief Administrative Officer and attested by, Daniel J. Krofcheck, its Vice President and Treasurer, this 28th day of March 2001. CENTURY ALUMINUM COMPANY By: /s/ Gerald J. Kitchen ----------------------------------- Executive Vice President, General Counsel and Chief Administrative Officer Attest: By: /s/ Daniel J. Krofcheck ---------------------------- Vice President and Treasurer -11- EX-4.1 5 y47973ex4-1.txt PURCHASE AGREEMENT 1 Exhibit 4.1 EXECUTION COPY CENTURY ALUMINUM COMPANY $325,000,000 11 3/4% SENIOR SECURED FIRST MORTGAGE NOTES DUE 2008 PURCHASE AGREEMENT March 28, 2001 2 March 28, 2001 Credit Suisse First Boston Corporation Fleet Securities, Inc. c/o Credit Suisse First Boston Corporation Eleven Madison Avenue New York, New York 10010-3629 Dear Sirs and Mesdames: Century Aluminum Company, a Delaware corporation (the "COMPANY"), proposes to issue and sell to Credit Suisse First Boston Corporation ("CSFBC") and Fleet Securities, Inc. (the "INITIAL PURCHASERS") $325,000,000 principal amount of its 11 3/4% Senior Secured First Mortgage Notes due 2008 (the "SECURITIES") to be issued pursuant to the provisions of an Indenture (the "INDENTURE") among the Company, the Guarantors referred to below and Wilmington Trust Company, as Trustee (the "TRUSTEE"). The Securities will be unconditionally guaranteed as to payment of principal, premium, if any, and interest, by each of the guarantors listed on the signature pages hereof (the "OWNED GUARANTORS") and Metalsco Ltd., Skyliner, Inc. and NSA, Ltd. (the "ACQUIRED GUARANTORS" and, together with the Owned Guarantors, the "GUARANTORS"). The Securities will be secured by perfected liens on (i) a cash collateral account and all amounts and investments held therein and (ii) certain of the property, plant and equipment held by certain of the Guarantors pursuant to the documents listed on Schedule III hereto (the "SECURITY DOCUMENTS"). The Securities will be offered without being registered under the Securities Act of 1933, as amended (the "SECURITIES ACT"), to qualified institutional buyers in compliance with the exemption from registration provided by Rule 144A under the Securities Act and in offshore transactions in reliance on Regulation S under the Securities Act ("REGULATION S"). The Initial Purchasers and their direct and indirect transferees will be entitled to the benefits of a Registration Rights Agreement dated the Closing Date (as defined in Section 4) among the Company, the Guarantors and the Initial Purchasers (the "REGISTRATION RIGHTS AGREEMENT"). In connection with the sale of the Securities, the Company has prepared a preliminary offering circular (the "PRELIMINARY OFFERING CIRCULAR") and will prepare a final offering circular (the "FINAL OFFERING CIRCULAR" and, with the Preliminary Offering Circular, each an "OFFERING CIRCULAR") including or incorporating by reference a description of the terms of the Securities, the terms of the offering and a description of the Company. As used herein, the term "Offering Circular" shall include in each case the documents incorporated by reference therein. The terms "SUPPLEMENT", "AMENDMENT" and "AMEND" as used herein with respect to an Offering Circular shall include all documents deemed to be incorporated by reference in the Preliminary Offering Circular or Final 3 Offering Circular that are filed subsequent to the date of such Offering Circular with the Securities and Exchange Commission (the "COMMISSION") pursuant to the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") until all of the Securities have been sold. It is understood and agreed that on or prior to the Closing Date, the Company will consummate the following transactions (collectively, the "TRANSACTIONS"), all as more fully described in the Offering Circulars: (i) (A) pursuant to a stock purchase agreement dated as of August 31, 2000 (the "ACQUISITION AGREEMENT") between the Company and Southwire Company, the Company will acquire all of the outstanding common stock of Metalsco, Ltd. and certain other assets and rights related to the NSA aluminum reduction plant located in Hawesville, Kentucky, owned by NSA, Ltd. ("NSA") (collectively, the "ACQUISITION") and (B) pursuant to an asset purchase agreement between Glencore Acquisition I LLC, a subsidiary of Glencore AG (the "GLENCORE BUYER") and NSA (the "GLENCORE DISPOSITION AGREEMENT and, together with the Acquisition Agreement, the "ACQUISITION AGREEMENTS"), the Company will, immediately following the closing under the Acquisition Agreement, cause NSA to convey all right, title and interest to potline no. 5 at the Hawesville facility and a 20% undivided interest in all remaining property owned by NSA (other than potlines no. 1, 2, 3 and 4) and the Company will convey a 20% interest in Century Aluminum of Kentucky, LLC, the operator of the Hawesville facility (the "OPERATOR"), in each case to Glencore or one of its subsidiaries (the "GLENCORE DISPOSITION"); (ii) the Company will repay any amounts outstanding, and terminate the commitments, under its credit agreement dated as of March 31, 1999 between the Company, the lenders party thereto and BankBoston, N.A. and CIT Group/Business Credit, Inc. as agents (together with any related guaranties, security agreements and other instruments and agreements, the "EXISTING CREDIT FACILITY"), (iii) the Company will enter into a revolving loan facility (together with any related guaranties, security agreements and other instruments and agreements, the "NEW CREDIT FACILITY") on substantially the terms described in the Offering Circulars, and borrow approximately $4.7 million of revolving loans thereunder, (iv) pursuant to a convertible preferred stock purchase agreement (the "PREFERRED STOCK PURCHASE AGREEMENT") between the Company and Glencore AG, the Company will issue in the aggregate $25,000,000 of its 8% Cumulative Convertible Preferred Stock (the "PREFERRED STOCK"), par value $50.00 per share, to Glencore AG without registering the Preferred Stock under the Securities Act in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act and/or Regulation S under the Securities Act, and (v) the Company will issue and sell the Securities pursuant to this Agreement and the Indenture, and the Company and the Guarantors will create the security interests provided for in the Security Documents. 2 4 This Agreement (including the Assumption Agreement, in the form of Exhibit D hereto, under which the Acquired Guarantors will become a party hereto), the Indenture, the Registration Rights Agreement, the New Credit Facility, the Acquisition Agreements, the Security Documents, the Preferred Stock Purchase Agreement, the Owners Agreement between NSA, the Glencore Buyer and the Operator (the "HAWESVILLE OWNERS AGREEMENT") and the Related Agreements (as defined in the Acquisition Agreement) are collectively referred to as the "TRANSACTION DOCUMENTS". References herein to the Company's charter or certificate of incorporation shall refer to the charter as amended by the certificate of designation (the "CERTIFICATE OF DESIGNATION") with respect to the Preferred Stock. 1. Representations and Warranties. The Company and the Guarantors jointly and severally represent and warrant to, and agree with, you that: (a) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act and incorporated by reference in either Offering Circular complied or will comply when so filed in all material respects with the Exchange Act and the applicable rules and regulations of the Commission thereunder and (ii) the Preliminary Offering Circular, as of the date thereof, did not contain and the Final Offering Circular, in the form used by the Initial Purchasers to confirm sales as of the date hereof and on the Closing Date (as defined in Section 5), will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in either Offering Circular based upon information relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through you expressly for use therein. (b) The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in each Offering Circular and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. (c) Each person that will be a subsidiary of the Company as of the Closing Date (each, a "SUBSIDIARY") has been duly organized, is validly existing in good standing under the laws of the jurisdiction of its organization, has the corporate or other power and authority to own its property and to conduct its business as described in each Offering Circular and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; all of 3 5 the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims except (i) for liens under the Existing Credit Facility, which will be released on the Closing Date, (ii) for encumbrances on the Company's ability to dispose of the stock of Berkeley Aluminum, Inc. and NSA, Ltd. pursuant to (x) the Amended and Restated Owners' Agreement dated as of January 26, 1996 between Alumax of South Carolina, Inc. and Berkeley Aluminum, Inc., as amended heretofore (the "MT. HOLLY OWNERS AGREEMENT"), governing the use and ownership of the Mt. Holly facility and (y) the Hawesville Owners Agreement, in each case as disclosed in the Offering Circulars, (iii) that the capital stock of each Acquired Guarantor is owned by Southwire Company prior to the Closing Date and (iv) as otherwise disclosed in each Offering Circular. (d) This Agreement has been duly authorized, executed and delivered by the Company and each Owned Guarantor, and as of the Closing Date, the Assumption Agreement will have been duly authorized, executed and delivered by each Acquired Guarantor. (e) The Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Initial Purchasers in accordance with the terms of this Agreement, will be valid and binding obligations of the Company, enforceable in accordance with their terms, subject to the effects of applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and equitable principles of general applicability, and will be entitled to the benefits of the Indenture and the Registration Rights Agreement (regardless of whether considered in an action at law or in equity). (f) Each Owned Guarantor has duly authorized its Guarantee of the Securities and, as of the Closing Date, each Acquired Guarantor will have duly authorized its Guarantee of the Securities and, when the Securities are executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Initial Purchasers in accordance with the terms of this Agreement, such Guarantee will be a valid and binding obligation of such Guarantor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors' rights generally and general principles of equity (regardless of whether considered in an action at law or in equity). (g) The Preferred Stock has been duly authorized and, when issued and delivered in accordance with the terms thereof, will be validly issued, fully paid and non-assessable. (h) Each of the Transaction Documents (other than this Agreement and the Assumption Agreement) has been duly authorized by the Company and each of its subsidiaries party thereto (other than the Acquired Guarantors) and, as of the Closing Date, each of such documents 4 6 will have been duly authorized by each Acquired Guarantor, and when executed and delivered by the Company or such subsidiaries, will be a valid and binding obligation of each such person, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors' rights generally and general principles of equity (regardless of whether considered in an action at law or in equity) and to the extent that rights to indemnity may be limited by federal or state securities laws or the public policy underlying such laws. (i) The execution and delivery by the Company and each of its subsidiaries of, and the performance by the Company and each of its subsidiaries of its obligations under, the Transaction Documents to which it is or will be a party and the consummation of the Transactions will not contravene (A) any provision of applicable law, (B) the certificate of incorporation or by-laws of the Company or any of its subsidiaries, (C) any agreement or other instrument binding upon the Company or any of its subsidiaries or (D) any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary except, in the case of (C) and (D), for contraventions that would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company or any of its subsidiaries of its obligations under the Transaction Documents or the consummation of the Transactions, except such as have been made and such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Securities (including the Guarantees) and by Federal and state securities laws with respect to the obligations of the Company and the Guarantors under the Registration Rights Agreement. (j) Neither the Company nor any of its subsidiaries (i) is in violation of its respective charter or by-laws or similar organizational documents or (ii) is in default in the performance or observance of any obligation, agreement, covenant or condition contained in any bond, debenture, note or other evidence of indebtedness, or in any lease, contract, indenture, deed of trust, loan agreement, joint venture or other agreement or instrument to which the Company or any of its subsidiaries is a party, or by which it or any of its subsidiaries or their respective properties may be bound, except where such default would not have a material adverse effect on the Company and its subsidiaries, taken as a whole; and neither the Company nor any of its subsidiaries is in violation of any law, order, rule, regulation, writ, injunction, judgment or decree of any court, government or governmental agency or body, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or over their respective properties except where such violation would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. (k) (x)(i) Each of the contracts set forth on Schedule II-A (the "EXISTING MATERIAL CONTRACTS") has been duly authorized, executed and delivered by, and constitutes a valid and binding obligation of, the Company and/or its subsidiaries party thereto; (ii) each of the contracts 5 7 (the "NEW MATERIAL CONTRACTS") set forth in Schedule II-B has been duly authorized by the Company and each of its subsidiaries party thereto (other than the Acquired Guarantors) and, as of the Closing Date, will have been duly authorized by each Acquired Guarantor and, when executed and delivered by the Company and/or its subsidiaries party thereto, will be a valid and binding obligation of the Company and such subsidiaries; and (iii) the Company and/or its subsidiaries party thereto have duly authorized the assumption of each of the contracts (the "ASSIGNED MATERIAL CONTRACTS" and, together with the Existing Material Contracts and the New Material Contracts, the "MATERIAL CONTRACTS") set forth in Schedule II-C and, when such assumption (and any related assignment) has been duly executed and delivered, each Assigned Material Contract will be a valid and binding obligation of the Company and such subsidiaries; (y) each of the Existing Material Contracts is in full force and effect as of the date hereof and, as of the Closing Date, each of the Material Contracts will be in full force and effect; and (z) neither the Company nor any of its subsidiaries, nor, to the knowledge of the Company, any of the other parties thereto, is, or with the giving of notice or lapse of time or both would be, in violation of or in default under any of the Material Contracts, except for violations and defaults which individually or in the aggregate would not have a material adverse effect on the Company and its subsidiaries, taken as a whole. (l) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Final Offering Circular (exclusive of any amendments or supplements hereto subsequent to the date of this Agreement). (m) Except as described in each Offering Circular, there are no legal or governmental proceedings pending or, to the Company's knowledge, threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject other than proceedings accurately described in all material respects in each Offering Circular and proceedings that would not reasonably be expected to have a material adverse effect on the Company and its subsidiaries, taken as a whole, or on the power (corporate or otherwise) or ability of the Company or any of its subsidiaries to perform its obligations under the Transaction Documents or to consummate the Transactions. (n) The Company and its subsidiaries (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms 6 8 and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole, except in each case as described in each Offering Circular. (o) Other than as described in the Offering Circulars, there are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which are not disclosed in the Offering Circulars and would, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole. (p) Subsequent to the date as of which information is given in the Final Offering Circular (exclusive of any amendment or supplement thereto subsequent to the date of this Agreement), (i) the Company and its subsidiaries have not incurred any material liability or obligation, direct or contingent, nor entered into any material transaction not in the ordinary course of business; (ii) the Company has not purchased any of its outstanding capital stock, nor declared, paid or otherwise made any dividend or distribution of any kind on its capital stock other than ordinary and customary dividends; and (iii) there has not been any material change in the capital stock, short-term debt or long-term debt of the Company and its subsidiaries, except in each case as described in the Offering Circulars. (q) The Company and its subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title to all personal property owned by them, in each case which is material to the business of the Company and its subsidiaries, taken as a whole, in each case free and clear of all liens, encumbrances and defects except (A) liens thereon created pursuant to the Security Documents or the New Credit Facility and (B) such other liens, encumbrances and defects that do not in the aggregate materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries; and any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries, in each case except as described in the Offering Circulars. (r) The Company and its subsidiaries own or possess, or can acquire on reasonable terms, all material patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names currently employed by them in connection with the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice of infringement of or conflict with asserted rights of others with respect to any of the foregoing which, singly or in the aggregate, if the 7 9 subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the Company and its subsidiaries, taken as a whole. (s) No material labor dispute with the employees of the Company or any of its subsidiaries exists (except as described in the Offering Circulars), or, to the knowledge of the Company, is imminent; and the Company is not aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that could have a material adverse effect on the Company and its subsidiaries, taken as a whole. (t) The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; neither the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for; and neither the Company nor any of its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a material adverse effect on the Company and its subsidiaries, taken as a whole, except as described in the Offering Circulars. (u) The Company and its subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and have made all declarations and filings with, all federal, state, local and other governmental authorities (including foreign regulatory agencies), all self- regulatory organizations and all courts and other tribunals, domestic or foreign, necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as conducted as of the date hereof, except such as would not result in a material adverse effect on the Company and its subsidiaries, taken as a whole, and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the Company and its subsidiaries, taken as a whole, except as described in the Offering Circulars. (v) The Company and each of its subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 8 10 (w) The financial statements of the Company included in the Offering Circulars present fairly in all material respects the consolidated financial position of the Company and its existing subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis; the financial statements of NSA, Ltd. included in the Offering Circulars present fairly in all material respects the financial position of NSA, Ltd. as of the dates shown and its results of operations for the periods shown, and such financial statements have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis; the financial statements of Xstrata Aluminum Corporation incorporated by reference in the Offering Circulars present fairly in all material respects the financial position of Xstrata Aluminum Corporation as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis; and the assumptions used in preparing the pro forma financial statements included in the Offering Circulars provide a reasonable basis for presenting the material effects directly attributable to the transactions or events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma columns therein reflect the proper application of those adjustments to the corresponding historical financial statement amounts. (x) Neither the Company nor any Guarantor is, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Final Offering Circular neither will be, required to register as an "investment company" as such term is defined in the Investment Company Act of 1940, as amended. (y) Neither the Company nor any affiliate (as defined in Rule 501(b) of Regulation D under the Securities Act, an "AFFILIATE") of the Company has directly, or through any agent (other than the Initial Purchasers, as to whom the Company makes no representation), (i) sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) which is or will be integrated with the sale of the Securities in a manner that would require the registration under the Securities Act of the Securities or (ii) engaged in any form of general solicitation or general advertising in connection with the offering of the Securities (as those terms are used in Regulation D under the Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act. (z) None of the Company, its Affiliates or any person acting on its or their behalf (other than the Initial Purchasers, as to whom the Company makes no representation) has engaged or will engage in any directed selling efforts (within the meaning of Regulation S) with respect to the Securities and the Company and its Affiliates and any person acting on its or their behalf (other than the Initial Purchasers, as to whom the 9 11 Company makes no representation) have complied and will comply with the offering restrictions requirement of Regulation S. (aa) Assuming compliance by the Initial Purchasers with their representations and warranties set forth in Section 7, it is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchasers in the manner contemplated by this Agreement to register the Securities (including the Guarantees) under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended. (ab) The Securities (including the Guarantees) satisfy the requirements set forth in Rule 144A(d)(3) under the Securities Act. (ac) The Company and each Guarantor has complied with all provisions of Section 517.075, Florida Statutes (chapter 92-198, Law of Florida). (ad) Each of the representations and warranties made in the New Credit Facility and the Acquisition Agreements by the Company and each of its subsidiaries party thereto is true and correct. (ae) Immediately prior to and after the Closing Date, the present fair saleable value of the assets of each Guarantor will exceed the amount that will be required to be paid on or in respect of the existing debts and other liabilities (including contingent liabilities) of such Guarantor as they become absolutely due and matured. The Company and each Guarantor believes that the assets of each Guarantor, immediately prior to and after the Closing Date, will not constitute unreasonably small capital to permit it to carry out its business as conducted or as proposed to be conducted. No Guarantor intends to, and none believes that it will, incur debts beyond its ability to pay such debts as they mature. (af) The Guarantors party hereto (including the Acquired Guarantors that will become a party hereto on the Closing Date pursuant to the Assumption Agreement) constitute all of the Domestic Restricted Subsidiaries (as defined in the Indenture) of the Company as of the Closing Date. (ag) The Security Documents will create valid security interests or mortgage liens in the collateral purported to be covered thereby securing the Company's or relevant Guarantor's obligations under the Notes (or, in the case of any Guarantor, its Guarantee), which security interests or mortgage liens are and will remain perfected security interests or liens prior to all other Liens (subject to the exceptions contemplated by the Indenture and the Security Documents). (ah) Each of the representations and warranties made by the Company and its subsidiaries in each Security Document to which it is a party is true and correct. 2. Agreements to Sell and Purchase. The Company hereby agrees to sell to the several Initial Purchasers, and each Initial Purchaser, upon the basis of 10 12 the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to purchase from the Company the respective principal amount of Securities set forth in Schedule I hereto opposite its name at a purchase price of 95.572% of the principal amount thereof plus accrued interest, if any, to the Closing Date (the "PURCHASE PRICE"). The Company hereby agrees that, without the prior written consent of CSFBC on behalf of the Initial Purchasers, it will not, during the period beginning on the date hereof and continuing to and including the Closing Date, offer, sell, contract to sell or otherwise dispose of any debt of the Company or any Guarantor or warrants to purchase debt of the Company or any Guarantor substantially similar to the Securities (other than the sale of the Securities under this Agreement). 3. Terms of Offering. You have advised the Company that the Initial Purchasers will make an offering of the Securities purchased by the Initial Purchasers hereunder on the terms to be set forth in the Final Offering Circular, as soon as practicable after this Agreement is entered into as in your judgment is advisable. 4. Payment and Delivery. Payment for the Securities shall be made to the Company by wire transfer to the account specified by the Company in Federal or other funds immediately available in New York City against delivery of such Securities for the respective accounts of the several Initial Purchasers at 10:00 a.m., New York City time, on April 2, 2001, or at such other time on the same or such other date, not later than April 9, 2001, as shall be designated in writing by you and the Company. The time and date of such payment are hereinafter referred to as the "CLOSING DATE." Certificates for the Securities shall be in definitive form or global form, as specified by you, and registered in such names and in such denominations as you shall request in writing not later than one full business day prior to the Closing Date. The certificates evidencing the Securities shall be delivered to you on the Closing Date for the respective accounts of the several Initial Purchasers, with any transfer taxes payable in connection with the transfer of the Securities to the Initial Purchasers duly paid, against payment of the Purchase Price therefor plus accrued interest, if any, to the date of payment and delivery. 5. Conditions to the Initial Purchasers' Obligations. The several obligations of the Initial Purchasers to purchase and pay for the Securities on the Closing Date are subject to the following conditions: (a) Subsequent to the execution and delivery of this Agreement, there shall not have occurred: (i) a change in U.S. or international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the judgment of the Initial Purchasers, be likely to prejudice materially the success of the proposed issue, sale or distribution of the Securities, whether in the primary market or in respect of dealings in the secondary market, or; 11 13 (ii) (A) any change, or any development or event involving a prospective change, in the condition (financial or other), business, properties or results of operations of the Company or its subsidiaries which, in the judgment of a majority in interest of the Initial Purchasers (including CSFBC), is material and adverse and makes it impractical or inadvisable to proceed with completion of the offering or the sale of and payment for the Securities; (B) any downgrading in the rating of any debt securities or preferred stock of the Company by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Securities Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities or preferred stock of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating); (C) any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (D) any general moratorium on commercial banking activities in New York declared by U.S. Federal or New York authorities; or (E) any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by Congress or any other substantial national or international calamity or emergency if, in the judgment of a majority in interest of the Initial Purchasers (including CSFBC), the effect of any such outbreak, escalation, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the offering or sale of and payment for the Securities. (b) The Initial Purchasers shall have received on the Closing Date a certificate, dated the Closing Date and signed by two executive officers of the Company and two executive officers of each Guarantor, to the effect set forth in Sections 2(l) and 6(a)(ii)(B) (in the case of the Company only) and to the effect that the representations and warranties of the Company and the Guarantors contained in this Agreement are true and correct as of the Closing Date and that the Company and the Guarantors have complied in all material respects with all of the agreements and satisfied all of the conditions on their part to be performed or satisfied hereunder on or before the Closing Date. Each officer signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened. (c) The Initial Purchasers shall have received on the Closing Date (i) an opinion of Curtis Mallet-Prevost, Colt & Mosle LLP, outside counsel for the Company and the Guarantors, dated the Closing Date, substantially in the form set forth in Exhibit A-1 and (ii) an opinion of Cardwell and Conner, environmental counsel for the Company and the Guarantors substantially in the form set forth in Exhibit A-2: 12 14 (d) The Initial Purchasers shall have received on the Closing Date (i) an opinion of Davis Polk & Wardwell, counsel for the Initial Purchasers, dated the Closing Date, to the effect set forth in Exhibit B and (ii) opinions of Bowles Rice McDavid Graff & Love PLLC, special Kentucky and West Virginia counsel for the Initial Purchasers, dated the Closing Date, to the effect set forth in Exhibits C-1 and C-2, respectively. (e) The Initial Purchasers shall have received on each of the date hereof and the Closing Date a letter, dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to the Initial Purchasers, from each of Deloitte & Touche LLP, independent public accountants of the Company, and Ernst & Young LLP, independent public accountants (with respect to NSA and Xstrata Aluminum Company), containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in or incorporated by reference into each Offering Circular; provided that the letters delivered on the Closing Date shall use a "cut-off date" not earlier than the date hereof. (f) (i) Each condition to the closing of the New Credit Facility shall have been satisfied (or, with the consent of the Initial Purchasers, waived in accordance with the terms of the New Credit Facility), (ii) at the Closing Date, no event of default or event that, with the giving of notice or lapse of time, or both, would constitute an event of default under the New Credit Facility shall have occurred and be continuing, and (iii) the closing under the New Credit Facility and the borrowing of approximately $4.7 million of loans thereunder in connection with the Transactions shall have been consummated, and the Initial Purchasers shall have received evidence reasonably satisfactory to them of such closing and borrowings. (g) Any amounts outstanding under the Existing Credit Facility shall have been repaid in full and such credit facility (as well as guarantees thereof and any liens securing such facility) shall have been terminated concurrently with the closing hereunder, and the Initial Purchasers shall have received evidence reasonably satisfactory to them of such repayment and termination. (h) The Company shall have filed the Certificate of Designation with the Secretary of State of Delaware (and the same shall have become effective and in full force and effect) and shall have issued Preferred Stock for gross proceeds of at least $25.0 million, and the Initial Purchasers shall have received evidence reasonably satisfactory to them of such filing and issuance. (i) (i) Each condition to the closing of the Acquisition and the Glencore Sale shall have been satisfied (or, with the consent of the Initial Purchasers, waived in accordance with the terms of the relevant Acquisition Agreement), and (ii) the closings under the Acquisition Agreements (including under the Glencore Disposition Agreement) shall have been consummated, and the Initial Purchasers shall have received evidence reasonably satisfactory to them of such closings. 13 15 (j) The Initial Purchasers shall have received counterparts of the Registration Rights Agreement duly executed by the Company and each Guarantor. (k) The Notes shall have been designated eligible for trading on PORTAL. (l) The Initial Purchasers shall have received copies of (i) the New Credit Facility and any related guarantees, security agreements and other instruments, (ii) the Acquisition Agreements and each of the Related Agreements and any related documents or other instruments, (iii) the Owners' Agreement, (iv) each of the New Material Contracts and Assigned Material Contracts and (v) the Indenture, in each case executed by each of the parties thereto. (m) The Initial Purchasers shall have received fully executed original copies of each Security Document and evidence reasonably satisfactory to them of the effectiveness of the security contemplated thereby and the perfection of the security interests created thereby (including the filing of UCC- 1s and arrangements for the recordation of any mortgages or deeds of trust. (n) The Initial Purchasers and the Collateral Agent shall have received, with respect to each property subject to a Mortgage (i) an ALTA extended coverage lender's policy of title insurance in an aggregate amount at least equal to $25.0 million, in the case of Ravenswood property and $35.0 million, in the case of the Hawesville facility, insuring the Mortgage of such property as a valid, enforceable first Lien on the applicable Guarantors interest in such property as defined in and subject to such Mortgage, subject only to permitted encumbrances (as defined in the Indenture), (ii) for each policy referred to in clause (i), legible copies of all documents affecting title, which shall show all recording information and (iii) a survey with respect to such property in form and substance satisfactory to the Initial Purchasers and Chicago Title Insurance Company (in the case of the Hawesville facility) and First American Title Insurance Company (in the case of the Ravenswood facility). Attached to each such policy shall be any and all endorsements available in the state in which such property is located, including (1) a comprehensive endorsement (ALTA 9 or equivalent) covering restrictions and other matters, (2) a 3.1 form of zoning endorsement, (3) an endorsement ensuring that the Lien of the Mortgage with respect to which the policy is issued is valid against any applicable usury laws in the state in which the Property subject to such Mortgage is located, (4) an endorsement ensuring that such Property has access to a dedicated public street, (5) a contiguity endorsement, (6) a survey and "same as" endorsement, (7) an endorsement deleting the so-called "doing business" exclusion and (8) a subdivision endorsement. (o) The Initial Purchasers shall have received evidence reasonably satisfactory to them that the Company and its subsidiaries are 14 16 in compliance with the insurance covenants contained in Section 4.04 of the Indenture and the Security Documents. (p) The Initial Purchasers shall have received an Assumption Agreement in the form of Exhibit D hereto duly executed by each of the Acquired Guarantors. (q) The Initial Purchasers shall have received such other documents and certificates as are reasonably requested by the Initial Purchasers or their counsel. 6. Covenants of the Company and the Guarantors. In further consideration of the agreements of the Initial Purchasers contained in this Agreement, the Company and each Guarantor covenants with each Initial Purchaser as follows: (a) To furnish to you in New York City, without charge, as promptly as practicable on the next Business Day hereafter after the execution and delivery hereof and during the period mentioned in Section 7(c), as many copies of the Final Offering Circular, any documents incorporated by reference therein and any supplements and amendments thereto as you may reasonably request. (b) Before amending or supplementing either Offering Circular, to furnish to you a copy of each such proposed amendment or supplement and not to use any such proposed amendment or supplement to which you reasonably object. (c) If, during such period after the date hereof and prior to the date on which all of the Securities shall have been sold by the Initial Purchasers, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Final Offering Circular in order to make the statements therein, in the light of the circumstances when the Final Offering Circular is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Initial Purchasers, it is necessary to amend or supplement the Final Offering Circular to comply with applicable law, forthwith to prepare and furnish, at its own expense, to the Initial Purchasers, either amendments or supplements to the Final Offering Circular so that the statements in the Final Offering Circular as so amended or supplemented will not, in the light of the circumstances when the Final Offering Circular is delivered to a purchaser, be misleading or so that the Final Offering Circular, as amended or supplemented, will comply with applicable law. The Initial Purchasers agree to notify the Company of the completion of their sale of the Securities. (d) To endeavor to qualify the Securities (including the Guarantees) for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request; provided that the Company will not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to 15 17 taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. (e) Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including: (i) the fees, disbursements and expenses of the counsel and accountants for the Company and the Guarantors in connection with the issuance and sale of the Securities and all other fees or expenses in connection with the preparation of each Offering Circular and all amendments and supplements thereto, including all printing costs associated therewith, and the delivering of copies thereof to the Initial Purchasers, in the quantities herein above specified, (ii) all costs and expenses related to the transfer and delivery of the Securities to the Initial Purchasers, including any transfer or other taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or legal investment Offering Circular in connection with the offer and sale of the Securities under state securities laws and all expenses in connection with the qualification of the Securities for offer and sale under state securities laws as provided in Section 7(d) hereof, including filing fees and the reasonable and documented fees and disbursements of counsel for the Initial Purchasers in connection with such qualification and in connection with the Blue Sky or legal investment Offering Circular, (iv) any fees charged by rating agencies for the rating of the Securities, (v) all document production charges and expenses of counsel to the Initial Purchasers (but not including their fees for professional services) in connection with the preparation of this Agreement that are reasonable and documented, (vi) the fees and expenses, if any, incurred in connection with the admission of the Securities for trading in PORTAL or any appropriate market system, (vii) the costs and charges of the Trustee and any transfer agent, registrar or depositary, (viii) the cost of the preparation, issuance and delivery of the Securities (including the Guarantees), (ix) the costs and expenses of the Company and the Guarantors relating to investor presentations on any "road show" undertaken in connection with the marketing of the offering of the Securities, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and the Guarantors and any such consultants, and the cost of any aircraft chartered with the prior approval of the Company in connection with the road show, (x) cost of creation and perfection of the security interests under the Security Documents (including costs of special Kentucky and West Virginia counsel) and all title insurance, recordation charges, filing fees and similar costs and expenses, and (xi) all other cost and expenses incident to the performance of the obligations of the Company and the Guarantors hereunder for which provision is not otherwise made in this Section. It is understood, however, that except as provided in this Section, Section 9, and the last paragraph of Section 10, the Initial Purchasers will pay all of their costs and expenses, including fees and disbursements of their counsel (except as provided in clause (x) above), transfer taxes payable on resale 16 18 of any of the Securities by them and any advertising expenses connected with any offers they may make. (f) Neither the Company nor any Affiliate will sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act) which could be integrated with the sale of the Securities in a manner which would require the registration under the Securities Act of the Securities. (g) Not to solicit any offer to buy or offer or sell the Securities by means of any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act. (h) While any of the Securities remain "restricted securities" within the meaning of the Securities Act, to make available, upon request, to any seller of such Securities the information specified in Rule 144A(d)(4) under the Securities Act, unless the Company is then subject to Section 13 or 15(d) of the Exchange Act. (i) None of the Company, its Affiliates or any person acting on its or their behalf (other than the Initial Purchasers, as to which the Company makes no representation) will engage in any directed selling efforts (as that term is defined in Regulation S) with respect to the Securities, and the Company and its Affiliates and each person acting on its or their behalf (other than the Initial Purchasers, as to which the Company makes no representation) will comply with the offering restrictions requirement of Regulation S. (j) During the period of two years after the Closing Date, the Company will not, and will not permit any of its subsidiaries and will use its best efforts to cause its other affiliates (as defined in Rule 144 under the Securities Act) not to resell any of the Securities which constitute "restricted securities" under Rule 144 that have been reacquired by any of them except pursuant to an effective registration statement under the Securities Act. (k) Not to take any action in violation of Regulation M under the Exchange Act in connection with the distribution of the Securities contemplated hereby. 7. Offering of Securities; Restrictions on Transfer. (a) Each Initial Purchaser, severally and not jointly, represents and warrants that such Initial Purchaser is a qualified institutional buyer as defined in Rule 144A under the Securities Act (a "QIB"). Each Initial Purchaser, severally and not jointly, agrees with the Company that (i) it will not solicit offers for, or offer or sell, such Securities by any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act and (ii) it will solicit offers for such Securities only from, and will offer such Securities only to, persons that it reasonably believes to be (A) in the case of 17 19 offers inside the United States, QIBs and (B) in the case of offers outside the United States, to persons other than U.S. persons ("FOREIGN PURCHASERS," which term shall include dealers or other professional fiduciaries in the United States acting on a discretionary basis for foreign beneficial owners (other than an estate or trust)) in reliance upon Regulation S under the Securities Act that, in each case, in purchasing such Securities are deemed to have represented and agreed as provided in the Final Offering Circular under the caption "Transfer Restrictions". (b) Each Initial Purchaser, severally and not jointly, represents, warrants, and agrees with respect to offers and sales outside the United States that: (i) such Initial Purchaser understands that no action has been or will be taken in any jurisdiction by the Company that would permit a public offering of the Securities, or possession or distribution of either Offering Circular or any other offering or publicity material relating to the Securities, in any country or jurisdiction where action for that purpose is required; (ii) such Initial Purchaser will comply with all applicable laws and regulations in each jurisdiction in which it acquires, offers, sells or delivers Securities or has in its possession or distributes either Offering Circular or any such other material, in all cases at its own expense; (iii) the Securities have not been registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Rule 144A or Regulation S under the Securities Act or pursuant to another exemption from the registration requirements of the Securities Act; (iv) such Initial Purchaser has offered the Securities and will offer and sell the Securities (A) as part of their distribution at any time and (B) otherwise until 40 days after the later of the commencement of the offering and the Closing Date, only in accordance with Rule 903 of Regulation S or as otherwise permitted in Section 8(a); accordingly, neither such Initial Purchaser, its Affiliates nor any persons acting on its or their behalf have engaged or will engage in any directed selling efforts (within the meaning of Regulation S) with respect to the Securities, and any such Initial Purchaser, its Affiliates and any such persons have complied and will comply with the offering restrictions requirement of Regulation S; (v) such Initial Purchaser has (A) not offered or sold and, prior to the date six months after the Closing Date, will not offer or sell any Securities to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (B) complied and will comply with all applicable provisions of the Financial Services Act 1986 with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom, and (C) only issued or passed on and will only issue or pass on in the United Kingdom any 18 20 document received by it in connection with the issue of the Securities to a person who is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or is a person to whom such document may otherwise lawfully be issued or passed on; (vi) such Initial Purchaser understands that the Securities have not been and will not be registered under the Securities and Exchange Law of Japan, and represents that it has not offered or sold, and agrees not to offer or sell, directly or indirectly, any Securities in Japan or for the account of any resident thereof except pursuant to any exemption from the registration requirements of the Securities and Exchange Law of Japan and otherwise in compliance with applicable provisions of Japanese law; and (vii) such Initial Purchaser agrees that, at or prior to confirmation of sales of the Securities, it will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases Securities from it during the restricted period a confirmation or notice to substantially the following effect: "The Securities covered hereby have not been registered under the U.S. Securities Act of 1933 (the "Securities Act") and may not be offered and sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering and the closing date, except in either case in accordance with Regulation S (or Rule 144A if available) under the Securities Act. Terms used above have the meaning given to them by Regulation S." Terms used in this Section 8(b) have the meanings given to them by Regulation S. 8. Indemnity and Contribution. (a) The Company and each Guarantor will, jointly and severally, indemnify and hold harmless each Initial Purchaser, its partners, directors and officers and each person, if any, who controls such Initial Purchaser within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such Initial Purchaser may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Final Offering Circular, or any amendment or supplement thereto, or any related Preliminary Offering Circular, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, including any losses, claims, damages or liabilities arising out of or based upon the Company's failure to perform its obligations under Section 7(c) of this Agreement, and will reimburse each Initial Purchaser for any legal or other expenses reasonably incurred by such Initial Purchaser in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company and the Guarantors will not be liable in any such case to the extent that any such loss, claim, damage 19 21 or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with written information furnished to the Company by any Initial Purchaser through CSFBC specifically for use therein, it being understood and agreed that the only such information consists of the information described as such in subsection (b) below; provided that the foregoing indemnity agreement with respect to the Preliminary Offering Circular shall not inure to the benefit of any Initial Purchaser who failed to deliver a Final Offering Circular (as then amended or supplemented) that was provided by the Company to the Initial Purchasers in the requisite quantity and on a timely basis in accordance with Section 7(a) hereof to the person asserting any losses, claims, damage, liabilities or actions caused by any untrue statement or alleged untrue statement of material fact or omission or alleged omission to state therein a material fact, if such untrue statement or alleged untrue statement or omission or alleged omission was cured in the Final Offering Circular. (b) Each Initial Purchaser will severally and not jointly indemnify and hold harmless the Company and the Guarantors, their respective directors and officers and each person, if any, who controls the Company or any Guarantor within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities to which the Company or any Guarantor may become subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect there) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Final Offering Circular, or any amendment or supplement thereto, or any related Preliminary Offering Circular, or arise out of or are based upon the omission or the alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Initial Purchaser specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Company or any Guarantor in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information furnished by any Initial Purchaser consists of (i) the sentence on the front cover page of the Offering Circulars regarding the delivery of the Securities, (ii) the third paragraph under "Notice to Investors" on page i of the Offering Circulars, and (iii) the following information in the Final Offering Circular furnished on behalf of each Initial Purchaser under the caption "Plan of Distribution": the first sentence of the third paragraph, the third and fourth sentences of the eighth paragraph, the ninth paragraph and the fourth and fifth sentences of the tenth paragraph; provided, however, that the Initial Purchasers shall not be liable for any losses, claims, damages or liabilities arising out of or based upon the Company's failure to perform its obligations under Section 7(c) of this Agreement. (c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any 20 22 liability which it may have to any indemnified party otherwise than under subsection (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses. In case any such action is brought against any indemnified party, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and does not include a statement as to or an admission of fault, culpability or failure to act by or on behalf of any indemnified party. (d) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors on the one hand and the Initial Purchasers on the other from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Guarantors on the one hand and the Initial Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantors on the one hand and the Initial Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company and the Guarantors bear to the total discounts and commissions received by the Initial Purchasers from the Company under this Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or any Guarantor or the Initial Purchasers and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Initial Purchaser shall be required to contribute any amount in excess of the amount by 21 23 which the total discounts and commissions received by such Initial Purchaser exceeds the amount of any damages which such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The Initial Purchasers' obligations in this subsection (d) to contribute are several in proportion to their respective purchase obligations and not joint. The Company, the Guarantors and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (e) The obligations of the Company and the Guarantors under this Section shall be in addition to any liability which they may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Initial Purchaser within the meaning of the Securities Act or the Exchange Act; and the obligations of the Initial Purchasers under this Section shall be in addition to any liability which the respective Initial Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the Company or any Guarantor within the meaning of the Securities Act or the Exchange Act. 9. Effectiveness; Defaulting Initial Purchasers. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto. If, on the Closing Date, any one or more of the Initial Purchasers shall fail or refuse to purchase Securities that it or they have agreed to purchase hereunder on such date, and the aggregate principal amount of Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase is not more than one-tenth of the aggregate principal amount of Securities to be purchased on such date, the other Initial Purchasers shall be obligated severally in the proportions that the principal amount of Securities set forth opposite their respective names in Schedule I bears to the aggregate principal amount of Securities set forth opposite the names of all such non-defaulting Initial Purchasers, or in such other proportions as you may specify, to purchase the Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase on such date; provided that in no event shall the principal amount of Securities that any Initial Purchaser has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 10 by an amount in excess of one-ninth of such principal amount of Securities without the written consent of such Initial Purchaser. If, on the Closing Date any Initial Purchaser or Initial Purchasers shall fail or refuse to purchase Securities which it or they have agreed to purchase hereunder on such date and the aggregate principal amount of Securities with respect to which such default occurs is more than one-tenth of the aggregate principal amount of Securities to be purchased on such date, and arrangements satisfactory to you and the Company for the purchase of such Securities are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any 22 24 non-defaulting Initial Purchaser or of the Company. In any such case either you or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Final Offering Circular or in any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Initial Purchaser from liability in respect of any default of such Initial Purchaser under this Agreement. If this Agreement shall be terminated by the Initial Purchasers, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Initial Purchasers or such Initial Purchasers as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred and documented by such Initial Purchasers in connection with this Agreement or the offering contemplated hereunder. 10. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 11. Applicable Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. 23 25 12. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement. 24 26 Very truly yours, CENTURY ALUMINUM COMPANY By: -------------------------------------- Name: Title: CENTURY ALUMINUM OF WEST VIRGINIA, INC. By: -------------------------------------- Name: Title: BERKELEY ALUMINUM, INC. By: -------------------------------------- Name: Title: CENTURY KENTUCKY, INC. By: -------------------------------------- Name: Title: VIRGIN ISLANDS ALUMINA CORPORATION LLC By: -------------------------------------- Name: Title: 25 27 Accepted as of the date hereof CREDIT SUISSE FIRST BOSTON CORPORATION FLEET SECURITIES, INC. By: Credit Suisse First Boston Corporation By: ------------------------------------- Name: Title: 26 28 SCHEDULE I
PRINCIPAL AMOUNT OF INITIAL PURCHASER SECURITIES TO BE PURCHASED - ------------------------------------------------ -------------------------- Credit Suisse First Boston Corporation.......... $292,500,000 Fleet Securities, Inc. ......................... $ 32,500,000 ------------ Total:.............................. $325,000,000 ============
29 SCHEDULE II SCHEDULE II-A EXISTING MATERIAL CONTRACTS 1. Molten Aluminum Purchase Agreement between Century Aluminum of West Virginia, Inc. and Pechiney Rolled Products, LLC, dated September 20, 1999 2. Aluminum Purchase Agreement between Berkeley Aluminum, Inc. and Glencore Ltd., dated April 7, 2000 3. Alumina Supply Agreement dated June 26, 1996 between Glencore AG and Berkeley Aluminum, Inc., as assignee of Glencore Primary Aluminum Company LLC 4. Alumina Supply Agreement between Alcoa Alumina & Chemicals, L.L.C., Alcoa of Australia, Ltd., and Century Aluminum of West Virginia, Inc. (f/k/a, Ravenswood Aluminum Corporation), dated July 24, 1995 5. Alumina Supply Agreement, dated as of January 1, 2001, between Glencore Ltd. and Berkeley Aluminum, Inc. 6. Alumina Supply Agreement, dated as of January 1, 2001, between Glencore AG and Century Aluminum of West Virginia, Inc. 7. Limited Term Firm Power Supply Agreement between Ravenswood Aluminum Corporation and Ohio Power Company, dated July 1, 1996; as amended by Amendment No. 1 dated January 13, 1997 8. South Carolina Public Service Authority Service Agreement for Large Power Electric Service between the South Carolina Public Service Authority and Alumax of South Carolina, Inc., dated July 1, 1997 9. Mt. Holly Owners Agreement SCHEDULE II-B NEW MATERIAL CONTRACTS 1. Aluminum Supply Agreement between Century Aluminum Company and Southwire Company, dated as of the Closing Date 30 SCHEDULE II-C ASSIGNED MATERIAL CONTRACTS 1. 1998 Settlement Agreement among Alcan Aluminum Corporation, Southwire Company, Big Rivers Electric Corporation, LG&E Energy Corp., Rural Utility Services, Henderson, Union Rural Electric Cooperative Corp., Green River Electric Corporation, and The Bank of New York, dated July 15, 1998, as assigned to Century or one of its subsidiaries pursuant to the assignment and assumption agreement dated as of the Closing Date 2. Alumina Purchase Agreement between Kaiser Aluminum, Chemical Corporation and Southwire Company, dated December 18, 1997 as amended heretofore by First Amendment and Second Amendment, as assigned to Century or one of its subsidiaries pursuant to the assignment and assumption agreement dated as of the Closing Date 3. Agreement for Electric Service between Green River Electric Corporation and Southwire Company, dated July 15, 1998, as amended by Amendment No. 1 dated July 15, 1998 and including all Third-Party Supplier Agreements as described in Schedule A thereto, as assigned to Century or one of its subsidiaries pursuant to the assignment and assumption agreement dated as of or prior to the Closing Date 2 31 SCHEDULE III SECURITY DOCUMENTS 1. Pledge and Security Agreement, dated as of the Closing Date, among the Company, the other Pledgors party thereto and Wilmington Trust Company, as collateral agent (the "COLLATERAL AGENT") relating to the pledge of cash collateral held in a cash collateral account. 2. Deed of Trust, Assignment of Leases and Rents, Security Agreement and Financing Statement dated as of the Closing Date from Century Aluminum of West Virginia, Inc. for the benefit of the Collateral Agent relating to the Ravenswood, WV facility. 3. Mortgage Assignment of Leases and Rents, Security Agreement and Financing Statement dated as of the Closing Date from NSA, Ltd. for the benefit of the Collateral Agent relating to the Hawesville, KY facility. 3 32 Schedule A 1. Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement dated as of April 2, 2001 from NSA, Ltd. as the mortgagor, to Wilmington Trust Company as the mortgagee, and Collateral Agent, relating to the property near Hawesville, Kentucky, to be filed for record in the Office of the Recorder in Hancock County, Kentucky. 33 Schedule B Financing Statements 1. Financing Statement on form UCC-1 listing the Mortgagor as debtor and the Collateral Agent as secured party, relating to the Hawesville Kentucky Property to be filed in the Office of the Recorder in Hancock County, Kentucky. 2. Financing Statement on form UCC-1 listing the Mortgagor as debtor and the Collateral Agent as secured party, relating to the Hawesville Kentucky Property to be filed in the Office of the Secretary of State of the State of Kentucky. 34 Schedule A 1. Deed of Trust, Assignment of Leases and Rents, Security Agreement and Financing Statement dated as of April 2, 2001 from Century Aluminum of West Virginia, Inc. as the grantor, to Wilmington Trust Company as the grantee, and Collateral Agent, relating to the property near Jackson County, West Virginia, to be filed for record in the office of the Clerk of County Commission of Jackson County, West Virginia. 35 Schedule B Financing Statements 1. Financing Statement on form UCC-1 listing the Grantor as debtor and the Collateral Agent as secured party, relating to Jackson County West Virginia Property to be filed in the office of the Clerk of the County Commission of Jackson County, West Virginia. 2. Financing Statement on form UCC-1 listing the Grantor as debtor and the Collateral Agent as secured party, relating to the Jackson County West Virginia Property to be filed in the Office of the Secretary of State of the State of West Virginia. 36 EXHIBIT D ASSUMPTION AGREEMENT Each of the undersigned, which has become a subsidiary of Century Aluminum Company (the "COMPANY") as of the date hereof, hereby expressly assumes, and agrees to perform and discharge, all of the obligations and liabilities of a "Guarantor" under the Purchase Agreement (the "PURCHASE AGREEMENT") dated March 28, 2001 among the Company, the Guarantors party thereto and Credit Suisse First Boston Corporation and Fleet Securities, Inc., as Initial Purchasers, including without limitation, the indemnity and contribution obligations under the Purchase Agreement. All references in the Purchase Agreement to the "Guarantors" shall hereafter refer to the Guarantors party thereto, as well as each of the undersigned and its respective successors. IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Assumption Agreement as of April 2, 2001. METALSCO, LTD. By:________________________________ Name: Title: SKYLINER, INC. By:________________________________ Name: Title: NSA, LTD. By:________________________________ Name: Title: D-1 EX-4.2 6 y47973ex4-2.txt INDENTURE 1 Exhibit 4.2 ============================= CENTURY ALUMINUM COMPANY, AS ISSUER THE GUARANTORS PARTY HERETO AND WILMINGTON TRUST COMPANY, AS TRUSTEE -------------------------------------------- INDENTURE DATED AS OF APRIL 2, 2001 -------------------------------------------- 11 3/4% SENIOR SECURED FIRST MORTGAGE NOTES DUE 2008 ============================= 2 CROSS-REFERENCE TABLE TIA Sections Indenture Sections - ------------ ------------------ Section 310 (a)...........................................................7.10 (b).....................................................7.03, 7.08 Section 311 ............................................................7.03 Section 312 ...........................................................12.02 Section 313 ............................................................7.06 Section 314 (a).....................................................4.17, 4.18 (b)...........................................................4.18 (c)..........................................................12.04 (d)..........................................................11.02 (e)..........................................................12.05 Section 315 (a).....................................................7.01, 7.02 (b).....................................................7.02, 7.05 (c)...........................................................7.01 (d)...........................................................7.02 (e).....................................................6.12, 7.02 Section 316 (a).........................................2.05, 6.02, 6.04, 6.05 (b).....................................................6.06, 6.07 (c)..........................................................12.02 Section 317 (a) (1).......................................................6.08 (a) (2).......................................................6.09 (b)...........................................................2.03 Section 318 ...........................................................12.01 3 RECITALS ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. Definitions.....................................................1 SECTION 1.02. Rules of Construction..........................................27 ARTICLE 2 THE NOTES SECTION 2.01. Form, Dating and Denominations 144A,Reg S; Legends.............28 SECTION 2.02. Execution and Authentication; Exchange Notes...................29 SECTION 2.03. Registrar, Paying Agent and Authenticating Agent; Paying Agent to Hold Money in Trust...............................................30 SECTION 2.04. Replacement Notes..............................................30 SECTION 2.05. Outstanding Notes..............................................30 SECTION 2.06. Temporary Notes................................................31 SECTION 2.07. Cancellation...................................................31 SECTION 2.08. CUSIP and CINS Numbers.........................................31 SECTION 2.09. Registration, Transfer and Exchange............................32 SECTION 2.10. Restrictions on Transfer and Exchange..........................35 SECTION 2.11. Temporary Offshore Global Notes................................36 ARTICLE 3 REDEMPTION; OFFER TO PURCHASE SECTION 3.01. Optional Redemption............................................37 SECTION 3.02. Redemption with Proceeds of Public Equity Offering.............37 SECTION 3.03. Method and Effect of Redemption................................38 SECTION 3.04. Offer to Purchase..............................................39 ARTICLE 4 COVENANTS SECTION 4.01. Payment of Notes...............................................41 SECTION 4.02. Maintenance of Office or Agency................................42 SECTION 4.03. Existence......................................................42 SECTION 4.04. Payment of Taxes and Other Claims..............................42 SECTION 4.05. Maintenance of Properties and Insurance........................42 SECTION 4.06. Limitation on Debt and Disqualified or Preferred Stock.........43 SECTION 4.07. Limitation on Restricted Payments..............................45 SECTION 4.08. Limitation on Liens............................................48 SECTION 4.09. Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries..........................................49 i 4 SECTION 4.10. Limitation on Sale or Issuance of Equity Interests of Restricted Subsidiaries....................................................50 SECTION 4.11. Guaranties by Restricted Subsidiaries..........................51 SECTION 4.12. Repurchase of Notes upon a Change of Control...................51 SECTION 4.13. Limitation on Asset Sales......................................51 SECTION 4.14. Limitation on Transactions with Shareholders and Affiliates....53 SECTION 4.15. Line of Business...............................................54 SECTION 4.16. Designation of Restricted and Unrestricted Subsidiaries........54 SECTION 4.17. Financial Reports..............................................56 SECTION 4.18. Reports to Trustee.............................................57 SECTION 4.19. Impairment of Security Interest; Further Assurances............58 SECTION 4.20. Limitations on Certain Activities by Century Aluminum of Kentucky LLC...............................................................58 ARTICLE 5 CONSOLIDATION, MERGER OR SALE OF ASSETS SECTION 5.01. Consolidation, Merger or Sale of Assets by the Company; No Lease of All or Substantially All Assets................................61 SECTION 5.02. Consolidation, Merger or Sale of Assets by a Guarantor.........62 ARTICLE 6 DEFAULT AND REMEDIES SECTION 6.01. Events of Default..............................................63 SECTION 6.02. Acceleration...................................................64 SECTION 6.03. Other Remedies.................................................65 SECTION 6.04. Waiver of Past Defaults........................................65 SECTION 6.05. Control by Majority............................................65 SECTION 6.06. Limitation on Suits............................................65 SECTION 6.07. Rights of Holders to Receive Payment...........................66 SECTION 6.08. Collection Suit by Trustee.....................................66 SECTION 6.09. Trustee May File Proofs of Claim...............................66 SECTION 6.10. Priorities.....................................................67 SECTION 6.11. Restoration of Rights and Remedies.............................67 SECTION 6.12. Undertaking for Costs..........................................67 SECTION 6.13. Rights and Remedies Cumulative.................................67 SECTION 6.14. Delay or Omission Not Waiver...................................68 SECTION 6.15. Waiver of Stay, Extension or Usury Laws........................68 ARTICLE 7 THE TRUSTEE SECTION 7.01. General........................................................68 SECTION 7.02. Certain Rights of Trustee......................................68 SECTION 7.03. Individual Rights of Trustee...................................70 SECTION 7.04. Trustee's Disclaimer...........................................70 ii 5 SECTION 7.05. Notice of Default..............................................70 SECTION 7.06. Reports by Trustee to Holders..................................71 SECTION 7.07. Compensation and Indemnity.....................................71 SECTION 7.08. Replacement of Trustee.........................................71 SECTION 7.09. Successor Trustee by Merger....................................72 SECTION 7.10. Eligibility....................................................73 SECTION 7.11. Money Held in Trust............................................73 SECTION 7.12. Collateral Agent...............................................73 ARTICLE 8 DEFEASANCE AND DISCHARGE SECTION 8.01. Discharge of Company's Obligations.............................74 SECTION 8.02. Legal Defeasance...............................................74 SECTION 8.03. Covenant Defeasance............................................76 SECTION 8.04. Application of Trust Money.....................................76 SECTION 8.05. Repayment to Company...........................................76 SECTION 8.06. Reinstatement..................................................77 ARTICLE 9 AMENDMENTS, SUPPLEMENTS AND WAIVERS SECTION 9.01. Amendments Without Consent of Holders..........................77 SECTION 9.02. Amendments With Consent of Holders.............................77 SECTION 9.03. Effect of Consent..............................................79 SECTION 9.04. Trustee's Rights and Obligations...............................79 SECTION 9.05. Conformity with Trust Indenture Act............................79 SECTION 9.06. Payments for Consents..........................................79 ARTICLE 10 GUARANTIES SECTION 10.01. The Guaranties................................................80 SECTION 10.02. Guaranty Unconditional........................................80 SECTION 10.03. Discharge; Reinstatement......................................81 SECTION 10.04. Waiver by the Guarantors......................................81 SECTION 10.05. Subrogation and Contribution..................................81 SECTION 10.06. Stay of Acceleration..........................................81 SECTION 10.07. Limitation on Amount of Guaranty..............................81 SECTION 10.08. Execution and Delivery of Guaranty............................82 SECTION 10.09. Release of Guaranty...........................................82 ARTICLE 11 SECURITY ARRANGEMENTS SECTION 11.01. Security......................................................82 SECTION 11.02. Disposition of Collateral.....................................83 iii 6 SECTION 11.03. Cash Collateral Account.......................................85 SECTION 11.04. Suits to Protect the Collateral...............................85 SECTION 11.05. Determinations Relating to Collateral.........................86 SECTION 11.06. Release upon Termination of the Company's Obligations.........86 ARTICLE 12 MISCELLANEOUS SECTION 12.01. Trust Indenture Act of 1939...................................86 SECTION 12.02. Noteholder Communications; Noteholder Actions.................86 SECTION 12.03. Notices.......................................................87 SECTION 12.04. Certificate and Opinion as to Conditions Precedent............88 SECTION 12.05. Statements Required in Certificate or Opinion.................88 SECTION 12.06. Payment Date Other Than a Business Day........................89 SECTION 12.07. Governing Law.................................................89 SECTION 12.08. No Adverse Interpretation of Other Agreements.................89 SECTION 12.09. Successors....................................................89 SECTION 12.10. Duplicate Originals...........................................89 SECTION 12.11. Separability..................................................89 SECTION 12.12. Table of Contents and Headings................................89 SECTION 12.13. No Liability of Directors, Officers, Employees, Incorporators and Stockholders.............................................89 EXHIBITS EXHIBIT A Form of Note EXHIBIT B Form of Supplemental Indenture EXHIBIT C Restricted Legend EXHIBIT D DTC Legend EXHIBIT E Regulation S Certificate EXHIBIT F Rule 144A Certificate EXHIBIT G Institutional Accredited Investor Certificate EXHIBIT H Certificate of Beneficial Ownership EXHIBIT I Temporary Offshore Global Note Legend EXHIBIT J Officers' Certificate pursuant to Section 11.02 iv 7 INDENTURE, dated as of April 2, 2001, among Century Aluminum Company, a Delaware corporation, as the Company, the Guarantors party hereto and Wilmington Trust Company, a Delaware banking corporation, as Trustee. RECITALS The Company has duly authorized the execution and delivery of the Indenture to provide for the issuance of up to $325,000,000 aggregate principal amount of the Company's 11 3/4% Senior Secured First Mortgage Notes Due 2008, together with any Exchange Notes issued therefor, as provided herein (the "NOTES"). All things necessary to make the Indenture a valid agreement of the Company, in accordance with its terms, have been done, and the Company has done all things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee under this Indenture and duly issued by the Company, the valid obligations of the Company as hereinafter provided. In addition, the Guarantors party hereto have duly authorized the execution and delivery of the Indenture as guarantors of the Notes. All things necessary to make the Indenture a valid agreement of each Guarantor, in accordance with its terms, have been done, and each Guarantor has done all things necessary to make the Note Guaranties, when the Notes are executed by the Company and authenticated and delivered by the Trustee under this Indenture and duly issued by the Company, the valid obligations of such Guarantor as hereinafter provided. This Indenture is subject to, and will be governed by, the provisions of the Trust Indenture Act that are required to be a part of and govern indentures qualified under the Trust Indenture Act. THIS INDENTURE FURTHER WITNESSETH For and in consideration of the premises and the purchase of the Notes by the Holders thereof, the parties hereto covenant and agree, for the equal and proportionate benefit of all Holders, as follows: ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. Definitions. "ACQUIRED DEBT" means Debt of a Person existing at the time the Person merges with or into or becomes a Restricted Subsidiary and not Incurred in connection with, or in contemplation of, the Person merging with or into or becoming a Restricted Subsidiary. 8 "ADDITIONAL INTEREST" means additional interest owed to the Holders pursuant to the Registration Rights Agreement. "AFFILIATE" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with") with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. "AGENT" means any Registrar, Paying Agent or Authenticating Agent. "AGENT MEMBER" means a member of, or a participant in, the Depositary. "ASSET SALE"means any sale, lease (other than operating leases entered into in the ordinary course of business), transfer or other disposition of any assets by the Company or any Restricted Subsidiary, including by means of a merger, consolidation or similar transaction or Sale and Leaseback Transaction and including any sale or issuance of Equity Interests of any Restricted Subsidiary (each of the above referred to as a "DISPOSITION"), provided that the following are not included in the definition of "Asset Sale": (1) a disposition to the Company or a Wholly Owned Restricted Subsidiary, including the sale or issuance by the Company or any Restricted Subsidiary of any Equity Interests of any Restricted Subsidiary to the Company or any Wholly Owned Restricted Subsidiary (or, in the case of any Collateral, only to the Company or a Guarantor, and provided that such Collateral shall continue to comprise Collateral subject to the Security Documents on terms substantially no less favorable to the Holders of the Notes than those in existence immediately prior to such transfer); (2) the disposition by the Company or any Restricted Subsidiary in the ordinary course of business of (i) cash and cash management investments, (ii) inventory acquired or produced and held for sale or resale in the ordinary course of business, or (iii) rights granted to others pursuant to leases, subleases or licenses; (3) the sale or discount of accounts receivable arising in the ordinary course of business in connection with the compromise or collection thereof; (4) a transaction that is governed by Section 5.01; (5) a Restricted Payment permitted under Section 4.07 or a Permitted Investment; 2 9 (6) any disposition in a transaction or series of related transactions of assets with a fair market value of less than $5.0 million (or, in the case of Restricted Assets only, $1.0 million or less); (7) any disposition of Equity Interests of an Unrestricted Subsidiary; (8) the granting of a Lien, other than in connection with a Sale and Leaseback Transaction, if the Lien is granted in compliance with Section 4.08; or (9) any conveyance by the Company or a Restricted Subsidiary to Glencore or one of its Affiliates of an undivided interest in a part of the Hawesville facility owned wholly by the Company or such Restricted Subsidiary in exchange for an undivided interest in another part of the Hawesville facility owned wholly by Glencore or such Affiliate or any similar transaction, such that, after giving effect thereto, the Company or such Restricted Subsidiary owns an undivided 80% interest in the entire Hawesville facility, all substantially on the terms described in the Offering Circular under "The NSA Acquisition"; provided that the Company or such Restricted Subsidiary's interest in the Hawesville facility shall continue to comprise Collateral subject to the Security Documents on terms substantially no less favorable to the Holders of the Notes than those in existence with respect to the Company or such Restricted Subsidiary's interest in the Hawesville facility immediately prior to such transfer. "ATTRIBUTABLE DEBT" means, in respect of a Sale and Leaseback Transaction, the present value, discounted at the interest rate implicit in the Sale and Leaseback Transaction, of the total obligations of the lessee for rental payments during the remaining term of the lease in the Sale and Leaseback Transaction. "AUTHENTICATING AGENT" refers to a Person engaged to authenticate the Notes in the stead of the Trustee. "AVERAGE LIFE" means, with respect to any Debt, the quotient obtained by dividing (i) the sum of the products of (x) the number of years from the date of determination to the dates of each successive scheduled principal payment of such Debt and (y) the amount of such principal payment by (ii) the sum of all such principal payments. "BANKRUPTCY DEFAULT" has the meaning assigned to such term in Section 6.01. "BOARD OF DIRECTORS" means the board of directors or comparable governing body of the Company, or any committee thereof duly authorized to act on its behalf. "BOARD RESOLUTION" means a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors which, as of the date of any certification thereof, remains in full force and effect. 3 10 "BUSINESS DAY" means any day except a Saturday, Sunday or other day on which commercial banks in New York City or in the city where the Corporate Trust Office of the Trustee is located are authorized by law to close. "CAPITAL LEASE" means, with respect to any Person, any lease of any property which, in conformity with GAAP, is required to be capitalized on the balance sheet of such Person. "CAPITAL STOCK" means, with respect to any Person, any and all shares of stock of a corporation, partnership interests or other equivalent interests (however designated, whether voting or non-voting) in such Person's equity, entitling the holder to receive a share of the profits and losses, and a distribution of assets, after liabilities, of such Person. "CASH COLLATERAL ACCOUNT" means the cash collateral account under the Pledge and Security Agreement. "CASH EQUIVALENTS" means (1) United States dollars, or money in other currencies received in the ordinary course of business, (2) U.S. Government Obligations with maturities not exceeding one year from the date of acquisition, (3) (i) demand deposits, (ii) time deposits and certificates of deposit with maturities of one year or less from the date of acquisition, (iii) bankers' acceptances with maturities not exceeding one year from the date of acquisition, and (iv) overnight bank deposits, in each case with any bank or trust company organized or licensed under the laws of the United States or any state thereof having capital, surplus and undivided profits in excess of $500 million whose short-term debt is rated "A-2" or higher by S&P or "P-2" or higher by Moody's, (4) repurchase obligations with a term of not more than seven days for underlying securities of the type described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above, (5) commercial paper rated at least P-1 by Moody's or A-1 by S&P and maturing within six months after the date of acquisition, (6) money market funds at least 95% of the assets of which consist of investments of the type described in clauses (1) through (5) above, and (7) in the case of a Foreign Restricted Subsidiary, substantially similar investments made in the ordinary course of business and denominated in the 4 11 currency of any location where the Foreign Restricted Subsidiary conducts business. "CASUALTY EVENT" means any damage to, or destruction of, any real or personal property or improvements that constitute Collateral. "CASUALTY PROCEEDS" means (i) with respect to any Condemnation Event, all awards or payments received by the Company or any of its Subsidiaries by reason of such Condemnation Event, including all amounts received with respect to any transfer in lieu or anticipation of such Condemnation Event or in settlement of any proceeding relating to such Condemnation Event, and (ii) with respect to any Casualty Event, all insurance proceeds or payments with respect to Collateral which the Company or any of its Subsidiaries receives under any insurance policy by reason of such Casualty Event, plus the amounts of any deductibles under insurance policies with respect to Collateral and, if the Company or any Guarantor fails to maintain any insurance policy with respect to Collateral, the amounts which would have been available thereunder with respect to such Casualty Event had the Company or such Guarantor maintained an insurance policy. "CAW" means Century Aluminum of West Virginia, Inc., a Delaware corporation, and its successors. "CERTIFICATE OF BENEFICIAL OWNERSHIP" means a certificate substantially in the form of Exhibit H. "CERTIFICATED NOTE" means a Note in registered individual form without interest coupons. "CHANGE OF CONTROL" means: (1) the merger or consolidation of the Company with or into another Person or the merger of another Person with or into the Company, or the sale of all or substantially all the assets of the Company to another Person, (in each case, unless such other Person is a Permitted Holder) unless holders of a majority of the aggregate voting power of the Voting Stock of the Company, immediately prior to such transaction, hold securities of the surviving or transferee Person that represent, immediately after such transaction, at least a majority of the aggregate voting power of the Voting Stock of the surviving or transferee Person; (2) any "person" or "group" (as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders, is or becomes the "beneficial owner" (as such term is used in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 40% of the total voting power of the Voting Stock of the Company; provided that indirect beneficial ownership of more than 40% of the total voting power of the Voting Stock of the Company through direct or indirect ownership of Voting Stock or Capital Stock 5 12 of Glencore by (a) the then-current or former officers or employees of Glencore or any of its Subsidiaries (the "GLENCORE EMPLOYEES") and/or (b) by any Person controlled by the Glencore Employees shall not be deemed to constitute a Change of Control if the composition of the Glencore Employees continues to be comprised in a manner consistent with the manner in which it is comprised on the Issue Date; (3) during any period of two consecutive years after the Issue Date, individuals who at the beginning of any such period constituted the board of directors of the Company, together with any new directors whose election by the board of directors or whose nomination for election by the stockholders of the Company was approved by a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the board of directors of the Company then in office; or (4) the adoption of a plan relating to the liquidation or dissolution of the Company. "CENTURY ALUMINUM OF KENTUCKY LLC" means Century Aluminum of Kentucky LLC, a Delaware limited liability company, and its successors, including any successor obligor pursuant to Section 4.20(e). "CLEARSTREAM" means Clearstream Banking SA and its successors. "COLLATERAL" means, collectively, all of the Company's or any of the Guarantors' right, title and interest in the following: (1) the Mortgaged Property; (2) the Cash Collateral Account and all amounts and investments held therein; (3) any other assets pledged as collateral from time to time; and (4) proceeds of any and all of the foregoing; provided that, notwithstanding anything in the foregoing to the contrary, Collateral will not include any accounts receivable and inventory pledged as collateral for the benefit of the lenders under the Credit Agreement, unless the agent or representative of the lenders under the Credit Agreement consents in writing to its inclusion as Collateral. "COLLATERAL AGENT" means the Trustee in its capacity as the Collateral Agent or any collateral agent appointed by the Trustee pursuant to Section 7.12 and the Security Documents. "COLLATERAL REQUIREMENT" means the requirement that: 6 13 (i) all documents and instruments, including Uniform Commercial Code financing statements and Mortgages, required by law to be filed, registered or recorded to create the Liens intended to be created by the Security Documents and perfect or record such Liens as valid first Liens, free of any other Liens except for Permitted Encumbrances, shall have been filed, registered or recorded; and (ii) the Collateral Agent shall have received, with respect to each Mortgaged Property, (w) counterparts of a Mortgage duly executed and delivered by the record owner of such Mortgaged Property, (x) a policy or policies of title insurance issued by a nationally recognized title insurance company (in an amount equal to the appraised value of such property as determined not more than six months prior to the issuance of the applicable policy) insuring the Lien of each such Mortgage as a valid first Lien on the Mortgaged Property described therein, free of any other Liens except for Permitted Encumbrances, together with any and all endorsements available in the state in which such property is located, including (1) a comprehensive endorsement (ALTA 9 or equivalent) covering restrictions and other matters, (2) a 3.1 form of zoning endorsement, (3) an endorsement insuring that the Lien of the Mortgage with respect to which the policy is issued is valid against any applicable usury laws in the state in which the property subject to such Mortgage is located, (4) an endorsement insuring that such property has access to a dedicated public street, (5) a contiguity endorsement, (6) a survey and "same as" endorsement, (7) an endorsement deleting the so-called "doing business" exclusion, (8) a "tie-in" endorsement, if appropriate, and (9) a subdivision endorsement, (y) an ALTA "as built" survey with respect to such property in accordance with the "Minimum Standard Detail Requirements for Land Title Surveys" as adopted by the American Title Association and the American Congress on Surveying and Mapping, certified to the Trustee and the title insurance company and showing the location of the improvements on the land, the location of all utilities, easements, reservations and rights-of-way on the property, the locations and names of adjacent streets, the distances to and names of the nearest intersection streets, the ingress to and egress from the property to adjacent streets, and disclosing no adverse state of facts (unless the same are Permitted Encumbrances) and otherwise in form and substance satisfactory to the issuing title insurance company and 7 14 (z) the Opinions of Counsel required pursuant to Section 4.18(d). "COMMISSION" means the Securities and Exchange Commission. "COMMON STOCK" means Capital Stock not entitled to any preference on dividends or distributions, upon liquidation or otherwise. "COMPANY" means the party named as such in the first paragraph of the Indenture or any successor obligor under the Indenture and the Notes pursuant to Section 5.01. "CONDEMNATION EVENT" means any condemnation or other taking or temporary or permanent requisition of any Collateral, any interest therein or right appurtenant thereto, or any change of grade affecting any Collateral, as the result of the exercise of any right of condemnation or eminent domain. A transfer to a governmental authority in lieu or anticipation of condemnation shall be deemed to be a Condemnation Event. "CONSOLIDATED NET INCOME" means, for any period, the aggregate net income (or loss) of the Company and its Restricted Subsidiaries for such period determined on a consolidated basis in conformity with GAAP, provided that the following (without duplication) will be excluded in computing Consolidated Net Income: (1) the net income (but not loss, unless such Person is a Foreign Person in which case the loss shall be excluded without regard to clauses (x) and (y) below) of any Person that is not a Wholly Owned Restricted Subsidiary, except to the extent of the lesser of (x) the dividends or other distributions actually paid in cash to the Company or any of its Wholly Owned Restricted Subsidiaries (subject to clause (3) below) by such Person during such period, and (y) the Company's pro rata share of such Person's net income earned during such period; (2) any net income (or loss) of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition; (3) the net income (but not loss) of any Wholly Owned Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Wholly Owned Restricted Subsidiary of such net income would not have been permitted for the relevant period by charter or by any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Wholly Owned Restricted Subsidiary; (4) any net after-tax gains and losses attributable to Asset Sales; (5) any net after-tax extraordinary or non-recurring gains and losses; 8 15 (6) the cumulative effect of a change in accounting principles; (7) any after-tax amortization expense attributable to the Agreement for Electric Service dated July 15, 1998 with Green River Company related to the Hawesville facility to the extent that such expense represents amortization of the value attributed thereto in connection with the purchase of the Hawesville facility by the Company or its Restricted Subsidiaries on or about the Issue Date in excess of the value previously attributed thereto in NSA Ltd.'s historical financial statements prepared in accordance with GAAP; (8) any after-tax non-cash losses or gains, determined in accordance with GAAP, relating to Hedging Agreements until such time as such agreements are settled (at which time such losses or gains shall be included); and (9) any after-tax non-cash losses or gains related to the write-up or write-down of inventory to reflect a change in market value of such inventory until such time as such inventory is sold (at which time such losses or gains shall be included). "CONSOLIDATED NET WORTH" means, at any date of determination, the consolidated stockholders' equity of the Company and its Restricted Subsidiaries, calculated excluding (1) any amounts attributable to Disqualified Stock, (2) treasury stock, (3) all write-ups (other than write-ups resulting from foreign currency translations and write-ups of tangible assets of a going concern business made in accordance with GAAP as a result of the acquisition of such business) subsequent to the Issue Date in the book value of any asset, and (4) the cumulative effect of a change in accounting principles. "CONVERTIBLE PREFERRED STOCK" means the convertible preferred stock issued to Glencore or one of its Affiliates on or about the Issue Date pursuant to the certificate of designation for such stock as in effect on or about the Issue Date and substantially on the terms described in the Offering Circular under "Description of Revolving Credit Facility and Convertible Preferred Stock." "CORPORATE TRUST OFFICE" means the office of the Trustee at which the corporate trust business of the Trustee is principally administered, which at the date of the Indenture is located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19860. 9 16 "CREDIT AGREEMENT" means the credit agreement dated on or about the Issue Date among the Company, the lenders party thereto and Fleet Capital Corporation, as administrative and documentation agent, together with any related documents (including any security documents and guarantee agreements), as such agreement and related documents may be amended, modified, supplemented, extended, renewed, refinanced or replaced or substituted from time to time. "DEBT" means, with respect to any Person, without duplication, (1) all indebtedness of such Person for borrowed money; (2) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (3) all obligations of such Person in respect of letters of credit, bankers' acceptances or other similar instruments, excluding obligations in respect of trade letters of credit or bankers' acceptances issued in respect of trade payables to the extent not drawn upon or presented, or, if drawn upon or presented, the resulting obligation of the Person is paid within three Business Days; (4) all obligations of such Person to pay the deferred and unpaid purchase price of property or services to the extent recorded as liabilities under GAAP, excluding trade payables arising in the ordinary course of business; (5) all obligations of such Person as lessee under Capital Leases and all Attributable Debt; (6) all Debt of other Persons Guaranteed by such Person (including by securing such Debt by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person) to the extent so Guaranteed, other than a Limited Recourse Guaranty; and (7) all obligations of such Person under Hedging Agreements. The amount of Debt on any date of determination of any Person under clauses (1) through (7) will be deemed to be: (A) with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation; (B) with respect to Debt secured by a Lien on an asset of such Person but not otherwise the obligation, contingent or otherwise, of such Person, the lesser of (x) the fair market value of such asset on the date the Lien attached and (y) the amount of such Debt; 10 17 (C) with respect to any Debt issued with original issue discount, the face amount of such Debt less the remaining unamortized portion of the original issue discount of such Debt; (D) with respect to any Hedging Agreement, the net amount payable if such Hedging Agreement terminated at that time due to default by such Person; and (E) otherwise, the outstanding principal amount thereof. "DEFAULT" means any event that is, or after notice or passage of time or both would be, an Event of Default. "DEPOSITARY" means the depositary of each Global Note, which will initially be DTC. "DISINTERESTED DIRECTORS" has the meaning assigned to such term in Section 4.14. "DISQUALIFIED EQUITY INTERESTS" means Equity Interests that by their terms or upon the happening of any event are (1) required to be redeemed or redeemable at the option of the holder prior to the Stated Maturity of the Notes for consideration other than Qualified Equity Interests, or (2) convertible at the option of the holder into Disqualified Equity Interests or exchangeable for Debt; provided that Equity Interests will not constitute Disqualified Equity Interests solely because of provisions giving holders thereof the right to require repurchase or redemption upon an "asset sale" or "change of control" occurring prior to the Stated Maturity of the Notes if those provisions (A) are no more favorable to the holders than Section 4.12 and Section 4.13, and (B) specifically state that repurchase or redemption pursuant thereto will not be required prior to the Company's repurchase of the Notes as required by the Indenture. "DISQUALIFIED STOCK" means Capital Stock constituting Disqualified Equity Interests. "DTC" means The Depository Trust Company, a New York corporation, and its successors. 11 18 "DTC LEGEND" means the legend set forth in Exhibit D. "DOMESTIC RESTRICTED SUBSIDIARY" means any Restricted Subsidiary formed under the laws of, or 50% or more of the assets of which are located in, the United States of America or any jurisdiction thereof. "EBITDA" means, for any period, the sum of (1) Consolidated Net Income, plus, in each case, without duplication: (2) to the extent deducted in calculating Consolidated Net Income, Fixed Charges, plus (3) to the extent deducted in calculating Consolidated Net Income and as determined on a consolidated basis for the Company and its Restricted Subsidiaries in conformity with GAAP: (A) income taxes, other than income taxes or income tax adjustments (whether positive or negative) attributable to Asset Sales or extraordinary gains or losses; and (B) depreciation, amortization and all other non-cash items reducing Consolidated Net Income (not including non-cash charges in a period which reflect cash expenses paid or to be paid in another period), less all non-cash items increasing Consolidated Net Income; provided that, with respect to any Restricted Subsidiary, such items (A) and (B) will be added only to the extent and in the same proportion that the relevant Restricted Subsidiary's net income was included in calculating Consolidated Net Income. "ENVIRONMENTAL LAWS" means any federal, state, local or foreign law (including common law), treaty, judicial decision, regulation, rule, judgment, order, decree, injunction, permit, or governmental restriction or requirement, or any written agreement with any governmental authority, whether now or hereafter in effect, relating to human health and safety, the environment or to pollutants, contaminants, wastes or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substances, wastes or materials. "EQUITY INTERESTS" means all Capital Stock and all warrants or options with respect to, or other rights to purchase, Capital Stock, but excluding Debt convertible into equity. "EUROCLEAR" means Euroclear Bank S.A./N.V., and its successors or assigns, as operator of the Euroclear System. "EVENT OF DEFAULT" has the meaning assigned to such term in Section 6.01. 12 19 "EXCHANGE ACT" means the Securities Exchange Act of 1934. "EXCHANGE NOTES" means the Notes of the Company issued pursuant to the Indenture in exchange for, and in an aggregate principal amount equal to, the Initial Notes validly tendered and not withdrawn in an Exchange Offer in compliance with the terms of the Registration Rights Agreement and containing terms substantially identical to the Initial Notes (except that (i) such Exchange Notes will be registered under the Securities Act and will not be subject to transfer restrictions or bear the Restricted Legend, and (ii) the provisions relating to Additional Interest will be eliminated). "EXCHANGE OFFER" means an offer by the Company to the Holders of the Initial Notes to exchange outstanding Notes for Exchange Notes, as provided for in the Registration Rights Agreement. "EXCHANGE OFFER REGISTRATION STATEMENT" means the Exchange Offer Registration Statement as defined in the Registration Rights Agreement. "FIXED CHARGE COVERAGE RATIO" means, on any date (the "TRANSACTION DATE"), the ratio of (x) the aggregate amount of EBITDA for the four fiscal quarters immediately prior to the transaction date for which financial statements have been provided (or if not timely provided, required to be provided) pursuant to Section 4.17 or, in the case of periods prior to the Issue Date, filed with the Commission (the "REFERENCE PERIOD") to (y) the aggregate Fixed Charges during such reference period. In making the foregoing calculation, (1) pro forma effect will be given to any Debt or Disqualified or Preferred Stock Incurred during or after the reference period to the extent the Debt or Disqualified or Preferred Stock is outstanding or is to be Incurred on the transaction date as if the Debt or Disqualified or Preferred Stock had been Incurred on the first day of the reference period; (2) pro forma calculations of interest on Debt bearing a floating interest rate will be made as if the rate in effect on the transaction date (taking into account any Hedging Agreement protecting against fluctuations in interest rates applicable to the Debt if the Hedging Agreement protecting against fluctuations in interest rates has a remaining term of at least 12 months or, if less, a remaining term equal to the remaining term of such Debt) had been the applicable rate for the entire reference period; (3) Fixed Charges related to any Debt or Disqualified or Preferred Stock no longer outstanding or to be repaid or redeemed on the transaction date, except for Interest Expense accrued during the reference period under a 13 20 revolving credit to the extent of the commitment thereunder (or under any successor revolving credit) in effect on the transaction date, will be excluded; (4) pro forma effect will be given to (A) the creation, designation or redesignation of Restricted and Unrestricted Subsidiaries, (B) the acquisition or disposition of companies, divisions or lines of businesses by the Company and its Restricted Subsidiaries, including any acquisition or disposition of a company, division or line of business since the beginning of the reference period by a Person that became a Restricted Subsidiary after the beginning of the reference period, and (C) the discontinuation of any discontinued operations that have occurred since the beginning of the reference period as if such events had occurred, and, in the case of any disposition, the proceeds thereof applied, on the first day of the reference period. To the extent that pro forma effect is to be given to an acquisition or disposition of a company, division or line of business, the pro forma calculation will be based upon the most recent four full fiscal quarters for which the relevant financial information is available. "FIXED CHARGES" means, for any period, the sum of (1) Interest Expense for such period; and (2) the product of (x) cash and non-cash dividends paid, declared, accrued or accumulated on any Disqualified or Preferred Stock of the Company or a Restricted Subsidiary, except for (i) dividends payable solely, or solely at the Company's option, in the Company's Qualified Stock or paid to the Company or to a Wholly Owned Restricted Subsidiary, and (ii) dividends paid, declared, accrued or accumulated on $25.0 million aggregate liquidation preference of Convertible Preferred Stock; and (y) a fraction, the numerator of which is one and the denominator of which is one minus the sum of the currently effective combined Federal, state, local and foreign tax rate applicable to the Company and its Restricted Subsidiaries. 14 21 "FOREIGN PERSON" means any Person that is formed under the laws of, and 50% or more of its assets are located in, any jurisdictions outside the United States of America. "FOREIGN RESTRICTED SUBSIDIARY" means any Restricted Subsidiary that is not a Domestic Restricted Subsidiary. "GAAP" means generally accepted accounting principles in the United States of America as in effect as of the Issue Date. "GLENCORE" means Glencore International AG, a corporation organized under the laws of Switzerland. "GLOBAL NOTE" means a Note in registered global form without interest coupons. "GUARANTEE" means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on an arm's-length basis and are entered into in the ordinary course of business), to take-or- pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof, in whole or in part; provided that the term "Guarantee" does not include endorsements for collection or deposit in the ordinary course of business or indemnities given in connection with any disposition of assets. The term "Guarantee" used as a verb has a corresponding meaning. "GUARANTOR" means (i) each Domestic Restricted Subsidiary of the Company in existence on the Issue Date and (ii) each Restricted Subsidiary that executes a supplemental indenture in the form of Exhibit B to the Indenture providing for the guarantee of the payment of the Notes, or any successor obligor under its Note Guaranty pursuant to Section 5.02, in each case unless and until such Guarantor is released from its Note Guaranty pursuant to the Indenture. "HAWESVILLE FACILITY" means the aluminum reduction facility located in Hawesville, Kentucky being purchased by the Company or one or more of its Subsidiaries on or about the Issue Date. "HAWESVILLE POWER CONTRACT" means the agreements pursuant to which the Hawesville facility obtains power, including: (1) the Agreement for Electric Service Between Green River Electric Corporation and Southwire Company, dated July 15, 1998 (including all third party supplier agreements described in Schedule A thereto) related to the Hawesville facility, and as assigned to the Company upon its acquisition of the 15 22 Hawesville facility pursuant to the Master Assignment Agreement Between Southwire Company and Century Aluminum Company dated as of November 22, 2000 and all amendments and exhibits thereto; and (2) the 1998 Settlement Agreement among Alcan Aluminum Corporation, Southwire Company, Big Rivers Electric Corporation, LG&E Energy Corp., Rural Utility Services, Henderson, Union Rural Electric Cooperative Corp., Green River Electric Corporation, and the Bank of New York, related to the Hawesville facility, and as assigned to the Company upon its acquisition of the Hawesville facility pursuant to the Master Assignment Agreement Between Southwire Company and Century Aluminum Company dated as of November 22, 2000 and all amendments and exhibits thereto, as such agreements may be amended, modified, supplemented, extended, renewed, replaced or substituted from time to time. "HEDGING AGREEMENT" means (i) any interest rate swap agreement, interest rate cap agreement or other agreement designed to protect against fluctuations in interest rates or (ii) any foreign exchange forward contract, currency swap agreement or other agreement designed to protect against fluctuations in foreign exchange rates or (iii) any commodity or raw material futures contract or any other agreement designed to protect against fluctuations in commodity or raw material prices. "HOLDER" or "NOTEHOLDER" means the registered holder of any Note. "INCUR" means, with respect to any Debt or Capital Stock, to incur, create, issue, assume or Guarantee such Debt or Capital Stock. If any Person becomes a Restricted Subsidiary on any date after the Issue Date (including by redesignation of an Unrestricted Subsidiary or failure of an Unrestricted Subsidiary to meet the qualifications necessary to remain an Unrestricted Subsidiary), the Debt and Capital Stock of such Person outstanding on such date will be deemed to have been Incurred by such Person on such date for purposes of Section 4.06, but will not be considered the sale or issuance of Equity Interests for purposes of Section 4.10 or Section 4.13. The accretion of original issue discount or payment of interest in kind will not be considered an Incurrence of Debt. "INDENTURE" means this indenture, as amended or supplemented from time to time. "INITIAL NOTES" means the Notes issued on the Issue Date and any Notes issued in replacement thereof, but not including any Exchange Notes issued in exchange therefor. "INITIAL PURCHASERS" means the initial purchasers party to a purchase agreement with the Company relating to the sale of the Initial Notes by the Company. "INSTITUTIONAL ACCREDITED INVESTOR CERTIFICATE" means a certificate substantially in the form of Exhibit G hereto. "INTEREST", in respect of the Notes, unless the context otherwise requires, refers to interest and Additional Interest, if any. 16 23 "INTEREST EXPENSE" means, for any period, the consolidated interest expense of the Company and its Restricted Subsidiaries, plus, to the extent not included in such consolidated interest expense, and to the extent incurred, accrued or payable by the Company or its Restricted Subsidiaries, without duplication, (i) interest expense attributable to Sale and Leaseback Transactions, (ii) amortization of debt discount and debt issuance costs (other than debt issuance costs incurred in connection with the offering of the Notes and the execution and delivery of the Credit Agreement on or about the Issue Date (whether or not incurred on or prior to the Issue Date), which costs shall be excluded from Interest Expense), (iii) capitalized interest, (iv) non-cash interest expense, (v) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing, (vi) net payments made, or less any net payments received, pursuant to Hedging Agreements (including the amortization of fees) relating to the Debt of the Company or any Restricted Subsidiary, other than the Debt of the type referred to in clause (7) of the definition thereof, and (vii) any of the above expenses with respect to Debt of another Person Guaranteed by the Company or any of its Restricted Subsidiaries (other than Non-Recourse Debt of a Joint Venture Guaranteed solely pursuant to a Limited Recourse Guarantee). "INTEREST PAYMENT DATE" means each April 15 and October 15 of each year, commencing October 15, 2001. "INVESTMENT" means (1) any direct or indirect advance, loan or other extension of credit to another Person, (2) any capital contribution to another Person, by means of any transfer of cash or other property or in any other form, (3) any purchase or acquisition of Equity Interests, bonds, notes or other Debt, or other instruments or securities issued by another Person, including the receipt of any of the above as consideration for the disposition of assets or rendering of services, or (4) any Guarantee of any obligation of another Person. If the Company or any Restricted Subsidiary (x) sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary so that, after giving effect to that sale or disposition, such Person is no longer a Subsidiary of the Company, or (y) designates any Restricted Subsidiary as an Unrestricted Subsidiary in accordance with Section 4.16, all remaining Investments of the Company and the Restricted Subsidiaries in such Person shall be deemed to have been made at such time. "ISSUE DATE" means the date on which the Notes are originally issued under the Indenture. 17 24 "JOINT VENTURE" means any joint venture between the Company or any Restricted Subsidiary and any other Person, whether or not such joint venture is a Subsidiary of the Company or any Restricted Subsidiary. "JOINT VENTURE HOLDING COMPANY" means any Subsidiary of the Company the activities of which are limited to making and owning Equity Interests and other Investments in a Joint Venture and activities incidental thereto, including participation in financing arrangements of such Joint Venture (but in each case only for so long as its activities are so limited). "JUDGMENT DEFAULT" has the meaning assigned to such term in Section 6.01. "LIEN" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or Sale and Leaseback Transaction). "LIMITED RECOURSE GUARANTY" means, with respect to any Non-Recourse Debt of a Joint Venture, any Guarantee of such Debt by the related Joint Venture Holding Company, including a pledge by such Joint Venture Holding Company of the Capital Stock and other Investments held in such Joint Venture, provided that in any event such Guarantee and pledge are non-recourse in all respects to the Company and its Restricted Subsidiaries other than such Joint Venture Holding Company. "MOODY'S" means Moody's Investors Service, Inc. and its successors. "MORTGAGED PROPERTY" means all "Mortgaged Property" and/or "Trust Property" as defined in any Mortgage and subject to any such Mortgage. "MORTGAGES" means, collectively, (i) the Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement dated as of the Issue Date from NSA, Ltd. to the Collateral Agent with respect to the Hawesville facility, (ii) the Deed of Trust, Assignment of Leases and Rents, Security Agreement, Financing Statement and Fixture Filing from CAW to the Collateral Agent with respect to the Ravenswood facility, and (iii) any additional mortgage, deed of trust or similar instrument entered into by the Company or any Guarantor from time to time after the Issue Date to provide a security interest for the benefit of the Trustee and the Holders of the Notes. "NET CASH PROCEEDS" means, with respect to any Asset Sale, the proceeds of such Asset Sale in the form of cash (including (i) payments in respect of deferred payment obligations to the extent corresponding to principal, but not interest, when received in the form of cash, and (ii) proceeds from the conversion of other consideration received when converted to cash), net of (1) brokerage commissions and other fees and expenses related to such Asset Sale, including fees and expenses of counsel, accountants and investment bankers; 18 25 (2) except to the extent that any such asset disposed of in such Asset Sale was Collateral, provisions for taxes as a result of such Asset Sale taking into account the consolidated results of operations of the Company and its Restricted Subsidiaries; (3) payments required to be made to holders of minority interests in Restricted Subsidiaries as a result of such Asset Sale or to repay Debt outstanding at the time of such Asset Sale that is secured by a Lien on the property or assets sold; and (4) except to the extent that any such asset disposed of in such Asset Sale was Collateral, appropriate amounts to be provided in conformity with GAAP as a reserve against liabilities associated with such Asset Sale, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and indemnification obligations associated with such Asset Sale, with any subsequent reduction of the reserve other than by payments made and charged against the reserved amount to be deemed a receipt of cash. "NON-RECOURSE DEBT" means Debt as to which (i) neither the Company nor any Restricted Subsidiary provides any Guarantee and as to which the lenders have agreed or have been notified in writing that they will not have any recourse to the stock or assets of the Company or any Restricted Subsidiary (other than a Limited Recourse Guaranty by a Joint Venture Holding Company) and (ii) no default thereunder would, as such, constitute a default under any Debt of the Company or any Restricted Subsidiary. "NON-U.S. PERSON" means a Person that is not a U.S. person, as defined in Regulation S. "NOTES" has the meaning assigned to such term in the Recitals. "NOTE GUARANTY" means the guaranty of the Notes by a Guarantor pursuant to the Indenture. "OBLIGATIONS" means, with respect to any Debt, all obligations (whether in existence on the Issue Date or arising afterwards, absolute or contingent, direct or indirect) for or in respect of principal (when due, upon acceleration, upon redemption, upon mandatory repayment or repurchase pursuant to a mandatory offer to purchase, or otherwise), premium, interest, penalties, fees, indemnification, reimbursement and other amounts payable and liabilities with respect to such Debt, including all interest accrued or accruing after the commencement of any bankruptcy, insolvency or reorganization or similar case or proceeding at the contract rate (including, without limitation, any contract rate applicable upon default) specified in the relevant documentation, whether or not the claim for such interest is allowed as a claim in such case or proceeding. "OFFER TO PURCHASE" has the meaning assigned to such term in Section 3.04. 19 26 "OFFERING CIRCULAR" means the confidential offering circular dated March 28, 2001 with respect to the Initial Notes. "OFFICER" means the chairman of the Board of Directors, the president or chief executive officer, any vice president, the chief financial officer, the treasurer or any assistant treasurer, or the secretary or any assistant secretary, of the Company. "OFFICERS' CERTIFICATE" means a certificate signed in the name of the Company (i) by the chairman of the Board of Directors, the president or chief executive officer or a vice president and (ii) by the chief financial officer, the treasurer or any assistant treasurer or the secretary or any assistant secretary. "OFFSHORE GLOBAL NOTE" means a Global Note representing Notes issued and sold pursuant to Regulation S. "OPINION OF COUNSEL" means a written opinion signed by legal counsel, who may be an employee of or counsel to the Company, satisfactory to the Trustee. "PAYING AGENT" refers to a Person appointed by the Company pursuant to Section 2.03 to perform the obligations in respect of payments made or funds held in respect of the Notes. "PERMANENT OFFSHORE GLOBAL NOTE" means an Offshore Global Note that does not bear the Temporary Offshore Global Note Legend. "PERMITTED BUSINESS" means the business of reducing, refining, processing and selling alumina, primary aluminum and aluminum products, and any business reasonably related, incidental or ancillary thereto. "PERMITTED DEBT" has the meaning assigned to such term in Section 4.06. "PERMITTED ENCUMBRANCES" means: (1) Liens imposed by law, such as carriers', vendors', warehousemen's and mechanics' liens, in each case for sums not yet due or being contested in good faith and by appropriate proceedings; (2) Liens in respect of taxes and other governmental assessments and charges which are not yet due or which are being contested in good faith and by appropriate proceedings; (3) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property, not interfering in any material respect with the conduct of the business of the Company and its Restricted Subsidiaries; 20 27 (4) options, put and call arrangements, rights of first refusal and similar rights and customary reciprocal easements or other rights of use relating to Investments in joint ventures, partnerships and the like, or relating to ownership of undivided interests in assets subject to a joint ownership or similar agreement; and (5) Liens imposed pursuant to Section 10.7 of the Owners' Agreement dated as of the Issue Date among NSA, Ltd., Glencore Acquisition I LLC and Century Aluminum of Kentucky LLC, as such agreement may be amended from time; provided that (a) any amendment is, with respect to such Lien on the interest of the Company and its Restricted Subsidiaries in the Hawesville facility and Century Aluminum of Kentucky LLC, no less favorable to the Company and its Restricted Subsidiaries and the Holders than the agreement with respect to such Lien as in effect on the Issue Date, (b) such Lien is expressly made junior to the Lien of the Indenture and the applicable Security Documents and (c) such Lien does not extend to or cover any other Collateral other than Mortgaged Property that is part of the Hawesville facility; provided that the term "PERMITTED ENCUMBRANCES" shall not include any Lien securing Debt (other than the Notes and the Guarantees and Liens of the type referred to in clause 5). "PERMITTED HOLDERS" means any or all of the following: (1) Glencore; and (2) any Person both the Capital Stock and the Voting Stock of which (or in the case of a trust, the beneficial interests in which) is owned 80% by the Person specified in clause (1). "PERMITTED INVESTMENTS" means: (1) any Investment in the Company or in a Guarantor that is engaged in a Permitted Business; (2) Investments in Foreign Restricted Subsidiaries engaged in Permitted Businesses in an aggregate amount, taken together with all other Investments made in reliance on this clause, not to exceed $10.0 million (net of, with respect to the Investment in any particular Person made under this clause, the cash return thereon received after the Issue Date as a result of any sale for cash, repayment, redemption, liquidating distribution or other cash realization (not included in Consolidated Net Income) not to exceed the amount of such Investments in such Person made after the Issue Date in reliance on this clause); (3) any Investment in Cash Equivalents; (4) any Investment by the Company or any Subsidiary of the Company in a Person, if as a result of such Investment, 21 28 (A) such Person becomes a Guarantor engaged in a Permitted Business, or (B) such Person is merged or consolidated with or into, or transfers or conveys substantially all its assets to, or is liquidated into, the Company or a Guarantor engaged in a Permitted Business; (5) Investments received as non-cash consideration in an Asset Sale made pursuant to and in compliance with Section 4.13; provided that such Investments shall be pledged as Collateral, in accordance with the requirements of Section 4.19(c), to the extent the assets subject to such Asset Sale constituted Restricted Assets; (6) any Investment acquired solely in exchange for Qualified Stock of the Company; (7) Hedging Agreements otherwise permitted under the Indenture; (8) (i) receivables owing to the Company or any Restricted Subsidiary if created or acquired in the ordinary course of business, (ii) endorsements for collection or deposit in the ordinary course of business, and (iii) securities, instruments or other obligations received in compromise or settlement of debts created in the ordinary course of business, or by reason of a composition or readjustment of debts or reorganization of another Person, or in satisfaction of claims or judgments; (9) payroll, travel and other loans or advances to, or Guarantees issued to support the obligations of, officers, directors and employees (including loans or Guarantees to satisfy tax withholding obligations of such persons upon the exercise of options or the vesting of performance shares), in each case in the ordinary course of business, not in excess of $2.0 million outstanding at any time; and (10) extensions of credit to customers and suppliers in the ordinary course of business. "PERMITTED LIENS" means (1) Liens existing on the Issue Date; (2) Liens securing the Notes, any Note Guaranties and other Obligations under the Indenture and the Security Documents; (3) Liens securing Obligations under or with respect to the Credit Agreement; provided that such Liens do not extend to any Restricted Assets; 22 29 (4) pledges or deposits under worker's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts or leases, or to secure public or statutory obligations (including, without limitation, obligations pursuant to Environmental Laws), surety bonds, customs duties and the like, or for the payment of rent, in each case incurred in the ordinary course of business and not securing Debt; (5) Liens imposed by law, such as carriers', vendors', warehousemen's and mechanics' liens, in each case for sums not yet due or being contested in good faith and by appropriate proceedings; (6) Liens in respect of taxes and other governmental assessments and charges which are not yet due or which are being contested in good faith and by appropriate proceedings; (7) Liens securing reimbursement obligations with respect to letters of credit that solely encumber documents and other property relating to such letters of credit and the proceeds thereof; (8) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property, not interfering in any material respect with the conduct of the business of the Company and its Restricted Subsidiaries; (9) licenses or leases or subleases as licensor, lessor or sublessor of any of its property, including intellectual property, in the ordinary course of business; (10) customary Liens in favor of trustees and escrow agents, and netting and setoff rights, banker's liens and the like in favor of financial institutions and counterparties to financial obligations and instruments, including netting and setoff rights with respect to (but not collateral pledged to secure) obligations under Hedging Agreements; (11) Liens on assets pursuant to merger agreements, stock or asset purchase agreements and similar agreements in respect of the disposition of such assets; (12) options, put and call arrangements, rights of first refusal and similar rights and customary reciprocal easements and other rights of use relating to Investments in joint ventures, partnerships and the like, or relating to ownership of undivided interests in assets subject to a joint ownership or similar agreement; 23 30 (13) judgment liens, and Liens securing appeal bonds or letters of credit issued in support of or in lieu of appeal bonds, so long as (x) no judgment default has occurred and is continuing and (y) the aggregate amount of all obligations secured by such judgment liens and other Liens described in this clause does not at any time exceed $10.0 million; (14) Liens on property of a Person at the time such Person becomes a Restricted Subsidiary, provided such Liens were not created in contemplation thereof and do not extend to any other property of the Company or any Restricted Subsidiary; (15) Liens on property at the time the Company or any of the Restricted Subsidiaries acquires such property, including by means of a merger or consolidation with or into the Company or a Restricted Subsidiary of such Person, provided such Liens were not created in contemplation thereof and do not extend to any other property of the Company or any Restricted Subsidiary; (16) Liens incurred or assumed in connection with the issuance of revenue bonds the interest on which is tax-exempt under the Internal Revenue Code; (17) Liens upon real or personal property acquired after the Issue Date, including any acquisition by means of any acquisition of Equity Interests or by means of a merger or consolidation of the owner thereof with or into the Company or a Restricted Subsidiary; provided that (a) the Lien is created solely to secure the purchase price or cost of construction thereof or Debt incurred to finance such purchase price or cost of construction, (b) the amount secured by the Lien does not exceed 100% of the purchase price or cost of construction thereof and (c) the Lien does not extend to or cover any other property or assets other than the property acquired or constructed and improvements of that property; (18) Liens securing or comprising a Limited Recourse Guaranty; and (19) extensions, renewals or replacements of any Liens referred to in clauses (1), (2), (14), (15), (16) or (17) in connection with the refinancing of the obligations secured thereby, provided that such Lien does not extend to any other property and, except as contemplated by the definition of "Permitted Refinancing Debt", the amount secured by such Lien is not increased. "PERMITTED REFINANCING DEBT" has the meaning assigned to such term in Section 4.06(b). "PERSON" means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity, including a government or political subdivision or an agency or instrumentality thereof. 24 31 "PLEDGE AND SECURITY AGREEMENT" means the pledge and security agreement dated the Issue Date between the Company and the Collateral Agent, as pledgee, covering the Cash Collateral Account. "PREFERRED STOCK" means, with respect to any Person, any and all Capital Stock which is preferred as to the payment of dividends or distributions, upon liquidation or otherwise, over another class of Capital Stock of such Person. "PRINCIPAL" of any Debt means the principal amount of such Debt, (or if such Debt was issued with original issue discount, the face amount of such Debt less the remaining unamortized portion of the original issue discount of such Debt), together with, unless the context otherwise indicates, any premium then payable on such Debt. "PUBLIC EQUITY OFFERING" means an underwritten primary public offering, after the Issue Date, of Qualified Stock of the Company pursuant to an effective registration statement under the Securities Act other than an issuance registered on Form S-4 or S-8 or any successor thereto or any issuance pursuant to employee benefit plans or otherwise in compensation to officers, directors or employees. "QUALIFIED EQUITY INTERESTS" means all Equity Interests of a Person other than Disqualified Equity Interests. "QUALIFIED STOCK" means all Capital Stock of a Person other than Disqualified Stock. "REFINANCE" has the meaning assigned to such term in Section 4.06. "REGISTER" has the meaning assigned to such term in Section 2.09. "REGISTRAR" means a Person engaged to maintain the Register. "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement dated on or about the Issue Date among the Company, the Guarantors party thereto and the Initial Purchasers party thereto with respect to the Initial Notes. "REGULAR RECORD DATE" for the interest payable on any Interest Payment Date means the April 1 or October 1 (whether or not a Business Day) next preceding such Interest Payment Date. "REGULATION S" means Regulation S under the Securities Act. "REGULATION S CERTIFICATE" means a certificate substantially in the form of Exhibit E hereto. "RELATED PARTY TRANSACTION" has the meaning assigned to such term in Section 4.14. 25 32 "RESTRICTED ASSETS" means at any time (1) assets that are, or are required under the Indenture and the Security Documents to be, Collateral at such time and (2) Equity Interests of (a) any Guarantor that owns any Collateral, (b) Berkeley Aluminum, Inc. and its successors ("BAC") and Century Aluminum of Kentucky LLC, and (c) any Subsidiary that at such time directly or indirectly holds any Equity Interests of BAC, Century Aluminum of Kentucky LLC or any Subsidiary that owns any Collateral. "RESTRICTED LEGEND" means the legend set forth in Exhibit C. "RESTRICTED PAYMENT" has the meaning assigned to such term in Section 4.07. "RESTRICTED PERIOD" means the 40-day distribution compliance period as defined in Regulation S, which period shall end on May 13, 2001. "RESTRICTED SUBSIDIARY" means any Subsidiary of the Company other than an Unrestricted Subsidiary. "RULE 144A" means Rule 144A under the Securities Act. "RULE 144A CERTIFICATE" means (i) a certificate substantially in the form of Exhibit F hereto or (ii) a written certification addressed to the Company and the Trustee to the effect that the Person making such certification (x) is acquiring such Note (or beneficial interest) for its own account or one or more accounts with respect to which it exercises sole investment discretion and that it and each such account is a qualified institutional buyer within the meaning of Rule 144A, (y) is aware that the transfer to it or exchange, as applicable, is being made in reliance upon the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A, and (z) acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A(d)(4) or has determined not to request such information. "S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill, Inc., and its successors. "SALE AND LEASEBACK TRANSACTION" means, with respect to any Person, an arrangement whereby such Person enters into a lease of property previously transferred by such Person to the lessor. "SECURITY DOCUMENTS" means the Mortgages, the Pledge and Security Agreement and any other security agreements, mortgages, deeds of trust, pledges, agency agreements and other instruments and documents related to the Collateral executed and delivered pursuant to the Indenture, or any of the foregoing. "SECURITIES ACT" means the Securities Act of 1933. "SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement as defined in a Registration Rights Agreement. 26 33 "SIGNIFICANT RESTRICTED SUBSIDIARY" means any Restricted Subsidiary, or group of Restricted Subsidiaries, that would, taken together, be a "significant subsidiary" as defined in Article 1, Rule 1-02 (w)(1) or (2) of Regulation S-X promulgated under the Securities Act, as that regulation is in effect on the Issue Date. "STATED MATURITY" means (i) with respect to any Debt, the date specified as the fixed date on which the final installment of principal of such Debt is due and payable or (ii) with respect to any scheduled installment of principal of or interest on any Debt, the date specified as the fixed date on which such installment is due and payable as set forth in the documentation governing such Debt, not including any contingent obligation to repay, redeem or repurchase prior to the regularly scheduled date for payment. "SUBORDINATED DEBT" means any Debt of the Company or any Guarantor which is subordinated in right of payment to the Notes or the Note Guaranty, as applicable, pursuant to a written agreement to that effect. "SUBSIDIARY" means with respect to any Person, any corporation, association or other business entity of which more than 50% of the outstanding Voting Stock is owned, directly or indirectly, by, or, in the case of a partnership, the sole general partner or the managing partner or the only general partners of which are, such Person and one or more Subsidiaries of such Person (or a combination thereof). Unless otherwise specified, "SUBSIDIARY" means a Subsidiary of the Company. "TEMPORARY OFFSHORE GLOBAL NOTE" means an Offshore Global Note that bears the Temporary Offshore Global Note Legend. "TEMPORARY OFFSHORE GLOBAL NOTE LEGEND" means the legend set forth in Exhibit I. "TRUSTEE" means the party named as such in the first paragraph of the Indenture or any successor trustee under the Indenture pursuant to Article 7. "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939. "U.S. GLOBAL NOTE" means a Global Note that bears the Restricted Legend representing Notes issued and sold pursuant to Rule 144A. "U.S. GOVERNMENT OBLIGATIONS" means obligations issued or directly and fully guaranteed or insured by the United States of America or by any agent or instrumentality thereof; provided that the full faith and credit of the United States of America is pledged in support thereof. "UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company that at the time of determination has previously been designated, and continues to be, an Unrestricted Subsidiary in accordance with Section 4.16. 27 34 "VOTING STOCK" means, with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person. "WHOLLY OWNED" means, with respect to any Restricted Subsidiary, a Restricted Subsidiary all of the outstanding Capital Stock of which (other than any director's qualifying shares) is owned by the Company and one or more Wholly Owned Restricted Subsidiaries (or a combination thereof). SECTION 1.02. Rules of Construction. Unless the context otherwise requires or except as otherwise expressly provided, (1) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (2) "herein," "hereof" and other words of similar import refer to the Indenture as a whole and not to any particular Section, Article or other subdivision; (3) all references to Sections or Articles or Exhibits refer to Sections or Articles or Exhibits of or to the Indenture unless otherwise indicated; and (4) references to agreements or instruments, or to statutes or regulations, are to such agreements or instruments, or statutes or regulations, as amended from time to time (or to successor statutes and regulations). ARTICLE 2 THE NOTES SECTION 2.01. Form, Dating and Denominations 144A,Reg S; Legends. (a) The Notes and the Trustee's certificate of authentication will be substantially in the form attached as Exhibit A. The terms and provisions contained in the form of the Notes annexed as Exhibit A constitute, and are hereby expressly made, a part of the Indenture. The Notes may have notations, legends or endorsements required by law, rules of or agreements with national securities exchanges to which the Company is subject, or usage. Each Note will be dated the date of its authentication. The Notes will be issuable in denominations of $1,000 in principal amount and any multiple of $1,000 in excess thereof. (b) (1) Except as otherwise provided in paragraph (c), Section 2.10(b)(3), (b)(5), or (c) or Section 2.09(b)(iv), each Initial Note (other than a Permanent Offshore Note) will bear the Restricted Legend. (2) Each Global Note, whether or not an Initial Note, will bear the DTC Legend. 28 35 (3) Each Temporary Offshore Global Note will bear the Temporary Offshore Global Note Legend. (4) Initial Notes offered and sold in reliance on Regulation S will be issued as provided in Section 2.11(a). (5) Initial Notes offered and sold in reliance on any exception under the Securities Act other than Regulation S and Rule 144A will be issued, and upon the request of the Company to the Trustee, Initial Notes offered and sold in reliance on Rule 144A may be issued, in the form of Certificated Notes. (6) Exchange Notes will be issued, subject to Section 2.09(b), in the form of one or more Global Notes. (c)(1) If the Company determines (upon the advice of counsel and such other certifications and evidence as the Company may reasonably require) that a Note is eligible for resale pursuant to Rule 144(k) under the Securities Act (or a successor provision) and that the Restricted Legend is no longer necessary or appropriate in order to ensure that subsequent transfers of the Note (or a beneficial interest therein) are effected in compliance with the Securities Act, or (2) after an Initial Note is (x) sold pursuant to an effective registration statement under the Securities Act, pursuant to the Registration Rights Agreement or otherwise, or (y) is validly tendered for exchange into an Exchange Note pursuant to an Exchange Offer, the Company may instruct the Trustee to cancel the Note and issue to the Holder thereof (or to its transferee) a new Note of like tenor and amount, registered in the name of the Holder thereof (or its transferee), that does not bear the Restricted Legend, and the Trustee will comply with such instruction. (d) By its acceptance of any Note bearing the Restricted Legend (or any beneficial interest in such a Note), each Holder thereof and each owner of a beneficial interest therein acknowledges the restrictions on transfer of such Note (and any such beneficial interest) set forth in this Indenture and in the Restricted Legend and agrees that it will transfer such Note (and any such beneficial interest) only in accordance with the Indenture and such legend. SECTION 2.02. Execution and Authentication; Exchange Notes. (a) An Officer shall execute the Notes for the Company by facsimile or manual signature in the name and on behalf of the Company. If an Officer whose signature is on a Note no longer holds that office at the time the Note is authenticated, the Note will still be valid. (b) A Note will not be valid until the Trustee manually signs the certificate of authentication on the Note, with the signature conclusive evidence that the Note has been authenticated under the Indenture. 29 36 (c) At any time and from time to time upon or after the execution and delivery of the Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication. The Trustee will authenticate and deliver (i) Notes for original issue in the aggregate principal amount not to exceed $325,000,000, and (ii) Exchange Notes from time to time for issue in exchange for a like principal amount of Initial Notes after the following conditions have been met: (1) Receipt by the Trustee of an Officers' Certificate specifying (A) the amount of Notes to be authenticated and the date on which the Notes are to be authenticated, (B) whether the Notes are to be Initial Notes or Exchange Notes, (C) whether the Notes are to be issued as one or more Global Notes or Certificated Notes, and (D) other information the Company may determine to include or the Trustee may reasonably request. (2) In the case of Exchange Notes, effectiveness of an Exchange Offer Registration Statement and consummation of the exchange offer thereunder (and receipt by the Trustee of an Officers' Certificate to that effect). Initial Notes exchanged for Exchange Notes will be cancelled by the Trustee. SECTION 2.03. Registrar, Paying Agent and Authenticating Agent; Paying Agent to Hold Money in Trust. (a) The Company may appoint one or more Registrars and one or more Paying Agents, and the Trustee may appoint an Authenticating Agent, in which case each reference in the Indenture to the Trustee in respect of the obligations of the Trustee to be performed by that Agent will be deemed to be references to the Agent. The Company may act as Registrar or (except for purposes of Article 8) Paying Agent. In each case the Company and the Trustee will enter into an appropriate agreement with the Agent implementing the provisions of the Indenture relating to the obligations to be performed by the Agent and the related rights. The Company initially appoints the Trustee as Registrar and Paying Agent. (b) The Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of the Holders or the Trustee all money held by the Paying Agent for the payment of principal of and interest on the Notes and will promptly notify the Trustee of any default by the Company in making any such payment. The Company at any time may require a Paying Agent to 30 37 pay all money held by it to the Trustee and account for any funds disbursed, and the Trustee may at any time during the continuance of any payment default, upon written request to a Paying Agent, require the Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. Upon doing so, the Paying Agent will have no further liability for the money so paid over to the Trustee. SECTION 2.04. Replacement Notes. If a mutilated Note is surrendered to the Trustee or if a Holder claims that its Note has been lost, destroyed or wrongfully taken, the Company will issue and the Trustee will authenticate a replacement Note of like tenor and principal amount and bearing a number not contemporaneously outstanding. Every replacement Note is an additional obligation of the Company and entitled to the benefits of the Indenture. If required by the Trustee or the Company, an indemnity must be furnished that is sufficient in the judgment of both the Trustee and the Company to protect the Company and the Trustee from any loss they may suffer if a Note is replaced. The Company may charge the Holder for the expenses of the Company and the Trustee in replacing a Note. In case the mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Company in its discretion may pay the Note instead of issuing a replacement Note. SECTION 2.05. Outstanding Notes. (a) Notes outstanding at any time are all Notes that have been authenticated by the Trustee except for (1) Notes cancelled by the Trustee or delivered to it for cancellation; (2) any Note which has been replaced pursuant to Section 2.04 unless and until the Trustee and the Company receive proof satisfactory to them that the replaced Note is held by a protected purchaser; and (3) on or after the maturity date or any redemption date or date for purchase of the Notes pursuant to an Offer to Purchase, those Notes payable or to be redeemed or purchased on that date for which the Trustee (or Paying Agent, other than the Company or an Affiliate of the Company) holds money sufficient to pay all amounts then due. (b) A Note does not cease to be outstanding because the Company or one of its Affiliates holds the Note, provided that in determining whether the Holders of the requisite principal amount of the outstanding Notes have given or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder, Notes owned by the Company or any Affiliate of the Company will be disregarded and deemed not to be outstanding, (it being understood that in determining whether the Trustee is protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Notes which the Trustee knows to be so owned will be so disregarded). Notes so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not the Company or any Affiliate of the Company. 31 38 SECTION 2.06. Temporary Notes. Until definitive Notes are ready for delivery, the Company may prepare and the Trustee will authenticate temporary Notes. Temporary Notes will be substantially in the form of definitive Notes but may have insertions, substitutions, omissions and other variations determined to be appropriate by the Officer executing the temporary Notes, as evidenced by the execution of the temporary Notes. If temporary Notes are issued, the Company will cause definitive Notes to be prepared without unreasonable delay. After the preparation of definitive Notes, the temporary Notes will be exchangeable for definitive Notes upon surrender of the temporary Notes at the office or agency of the Company designated for the purpose pursuant to Section 4.02, without charge to the Holder. Upon surrender for cancellation of any temporary Notes the Company will execute and the Trustee will authenticate and deliver in exchange therefor a like principal amount of definitive Notes of authorized denominations. Until so exchanged, the temporary Notes will be entitled to the same benefits under the Indenture as definitive Notes. SECTION 2.07. Cancellation. The Company at any time may deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Notes previously authenticated hereunder which the Company has not issued and sold. Any Registrar or the Paying Agent will forward to the Trustee any Notes surrendered to it for transfer, exchange or payment. The Trustee will cancel all Notes surrendered for transfer, exchange, payment or cancellation and dispose of them in accordance with its normal procedures or the written instructions of the Company. The Company may not issue new Notes to replace Notes it has paid in full or delivered to the Trustee for cancellation. SECTION 2.08. CUSIP and CINS Numbers. The Company in issuing the Notes may use "CUSIP" and "CINS" numbers, and the Trustee will use CUSIP numbers or CINS numbers in notices of redemption or exchange or in Offers to Purchase as a convenience to Holders, the notice to state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption or exchange or Offer to Purchase. The Company will promptly notify the Trustee of any change in the CUSIP or CINS numbers. SECTION 2.09. Registration, Transfer and Exchange. (a) The Notes will be issued in registered form only, without coupons, and the Company shall cause the Trustee to maintain a register (the "REGISTER") of the Notes, for registering the record ownership of the Notes by the Holders and transfers and exchanges of the Notes. (b) (i) Each Global Note will be registered in the name of the Depositary or its nominee and, so long as DTC is serving as the Depositary thereof, will bear the DTC Legend. (ii) Each Global Note will be delivered to the Trustee as custodian for the Depositary. Transfers of a Global Note (but not a beneficial interest therein) will be limited to transfers thereof in whole, but not in part, to the Depositary, its successors or their respective nominees, except (1) as set forth in Section 32 39 2.09(b)(iv) and (2) transfers of portions thereof in the form of Certificated Notes may be made upon request of an Agent Member (for itself or on behalf of a beneficial owner) by written notice given to the Trustee by or on behalf of the Depositary in accordance with customary procedures of the Depositary and in compliance with this Section and Section 2.10. (iii) Agent Members will have no rights under the Indenture with respect to any Global Note held on their behalf by the Depositary, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, the Depositary or its nominee may grant proxies and otherwise authorize any Person (including any Agent Member and any Person that holds a beneficial interest in a Global Note through an Agent Member) to take any action which a Holder is entitled to take under the Indenture or the Notes, and nothing herein will impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any security. (iv) If (x) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for a Global Note and a successor depositary is not appointed by the Company within 90 days of the notice or (y) an Event of Default has occurred and is continuing and the Trustee has received a request from the Depositary, the Trustee will promptly exchange each beneficial interest in the Global Note for one or more Certificated Notes in authorized denominations having an equal aggregate principal amount registered in the name of the owner of such beneficial interest, as identified to the Trustee by the Depositary, and thereupon the Global Note will be deemed canceled. If such Note does not bear the Restricted Legend, then the Certificated Notes issued in exchange therefor will not bear the Restricted Legend. If such Note bears the Restricted Legend, then the Certificated Notes issued in exchange therefor will bear the Restricted Legend, provided that any Holder of any such Certificated Note issued in exchange for a beneficial interest in a Temporary Offshore Global Note will have the right upon presentation to the Trustee of a duly completed Certificate of Beneficial Ownership after the Restricted Period to exchange such Certificated Note for a Certificated Note of like tenor and amount that does not bear the Restricted Legend, registered in the name of such Holder. (c) Each Certificated Note will be registered in the name of the holder thereof or its nominee. (d) A Holder may transfer a Note (or a beneficial interest therein) to another Person or exchange a Note (or a beneficial interest therein) for another Note or Notes of any authorized denomination by presenting to the Trustee a written request therefor stating the name of the proposed transferee or requesting such an exchange, accompanied by any certification, opinion or other document required by Section 2.10. The Trustee will promptly register any transfer or exchange that meets the requirements 33 40 of this Section by noting the same in the register maintained by the Trustee for the purpose; provided that (A) no transfer or exchange will be effective until it is registered in such register and (B) the Trustee will not be required (i) to issue, register the transfer of or exchange any Note for a period of 15 days before a selection of Notes to be redeemed or purchased pursuant to an Offer to Purchase, (ii) to register the transfer of or exchange any Note so selected for redemption or purchase in whole or in part, except, in the case of a partial redemption or purchase, that portion of any Note not being redeemed or purchased, or (iii) if a redemption or a purchase pursuant to an Offer to Purchase is to occur after a Regular Record Date but on or before the corresponding Interest Payment Date, to register the transfer of or exchange any Note on or after the Regular Record Date and before the date of redemption or purchase. Prior to the registration of any transfer, the Company, the Trustee and their agents will treat the Person in whose name the Note is registered as the owner and Holder thereof for all purposes (whether or not the Note is overdue), and will not be affected by notice to the contrary. From time to time the Company will execute and the Trustee will authenticate additional Notes as necessary in order to permit the registration of a transfer or exchange in accordance with this Section. No service charge will be imposed in connection with any registration of transfer or exchange of any Note, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than a transfer tax or other similar governmental charge payable upon exchange pursuant to subsection (b)(iv)). (e) (i) Global Note to Global Note. If a beneficial interest in a Global Note is transferred or exchanged for a beneficial interest in another Global Note, the Trustee will (x) record a decrease in the principal amount of the Global Note being transferred or exchanged equal to the principal amount of such transfer or exchange and (y) record a like increase in the principal amount of the other Global Note. Any beneficial interest in one Global Note that is transferred to a Person who takes delivery in the form of an interest in another Global Note, or exchanged for an interest in another Global Note, will, upon registration of transfer or exchange, cease to be an interest in such Global Note and become an interest in the other Global Note and, accordingly, will thereafter be subject to all transfer and exchange restrictions, if any, and other procedures applicable to beneficial interests in such other Global Note for as long as it remains such an interest. (ii) Global Note to Certificated Note. If a beneficial interest in a Global Note is transferred or exchanged for a Certificated Note, the Trustee will (x) record a decrease in the principal amount of such Global Note equal to the 34 41 principal amount of such transfer or exchange and (y) deliver one or more new Certificated Notes in authorized denominations having an equal aggregate principal amount to the transferee (in the case of a transfer) or the owner of such beneficial interest (in the case of an exchange), registered in the name of such transferee or owner, as applicable. (iii) Certificated Note to Global Note. If a Certificated Note is transferred or exchanged for a beneficial interest in a Global Note, the Trustee will (x) cancel such Certificated Note, (y) record an increase in the principal amount of such Global Note equal to the principal amount of such transfer or exchange and (z) in the event that such transfer or exchange involves less than the entire principal amount of the canceled Certificated Note, deliver to the Holder thereof one or more new Certificated Notes in authorized denominations having an aggregate principal amount equal to the untransferred or unexchanged portion of the canceled Certificated Note, registered in the name of the Holder thereof. (iv) Certificated Note to Certificated Note. If a Certificated Note is transferred or exchanged for another Certificated Note, the Trustee will (x) cancel the Certificated Note being transferred or exchanged, (y) deliver one or more new Certificated Notes in authorized denominations having an aggregate principal amount equal to the principal amount of such transfer or exchange to the transferee (in the case of a transfer) or the Holder of the canceled Certificated Note (in the case of an exchange), registered in the name of such transferee or Holder, as applicable, and (z) if such transfer or exchange involves less than the entire principal amount of the canceled Certificated Note, deliver to the Holder thereof one or more Certificated Notes in authorized denominations having an aggregate principal amount equal to the untransferred or unexchanged portion of the canceled Certificated Note, registered in the name of the Holder thereof. SECTION 2.10. Restrictions on Transfer and Exchange. (a) The transfer or exchange of any Note (or a beneficial interest therein) may only be made in accordance with this Section and Section 2.09 and, in the case of a Global Note (or a beneficial interest therein), the applicable rules and procedures of the Depositary. The Trustee shall refuse to register any requested transfer or exchange that does not comply with the preceding sentence. (b) Subject to paragraph (c), the transfer or exchange of any Note (or a beneficial interest therein) of the type set forth in column A below for a Note (or a beneficial interest therein) of the type set forth opposite in column B below may only be made in compliance with the certification requirements (if any) described in the clause of this paragraph set forth opposite in column C below. A B C U.S. Global Note U.S. Global Note (1) U.S. Global Note Offshore Global Note (2) 35 42 A B C U.S. Global Note Certificated Note (3) Offshore Global Note U.S. Global Note (4) Offshore Global Note Offshore Global Note (1) Offshore Global Note Certificated Note (5) Certificated Note U.S. Global Note (4) Certificated Note Offshore Global Note (2) Certificated Note Certificated Note (3) (1) No certification is required. (2) The Person requesting the registration of transfer or exchange must deliver or cause to be delivered to the Trustee a duly completed Regulation S Certificate; provided that if the requested transfer or exchange is made by the Holder of a Certificated Note that does not bear the Restricted Legend, then no certification is required. (3) The Person requesting the registration of transfer or exchange must deliver or cause to be delivered to the Trustee (x) a duly completed Rule 144A Certificate, (y) a duly completed Regulation S Certificate or (z) a duly completed Institutional Accredited Investor Certificate, and/or an Opinion of Counsel and such other certifications and evidence as the Company may reasonably require in order to determine that the proposed transfer or exchange is being made in compliance with the Securities Act and any applicable securities laws of any state of the United States; provided that if the requested transfer or exchange is made by the Holder of a Certificated Note that does not bear the Restricted Legend, then no certification is required. In the event that (i) the requested transfer or exchange takes place after the Restricted Period and a duly completed Regulation S Certificate is delivered to the Trustee or (ii) a Certificated Note that does not bear the Restricted Legend is surrendered for transfer or exchange, upon registration of transfer or exchange the Trustee will deliver a Certificated Note that does not bear the Restricted Legend. (4) The Person requesting the registration of transfer or exchange must deliver or cause to be delivered to the Trustee a duly completed Rule 144A Certificate. (5) Notwithstanding anything to the contrary contained herein, no such exchange is permitted if the requested exchange involves a beneficial interest in a Temporary Offshore Global Note. If the requested transfer involves a beneficial interest in a Temporary Offshore Global Note, the Person requesting the registration of transfer must deliver or cause to be delivered to the Trustee (x) a duly completed Rule 144A Certificate or (y) a duly completed Institutional Accredited Investor Certificate and/or an Opinion of Counsel and such other certifications and evidence as the Company may reasonably require in order to determine that the proposed transfer is being made in compliance with the Securities Act and any applicable securities laws of any state of the United 36 43 States. If the requested transfer or exchange involves a beneficial interest in a Permanent Offshore Global Note, no certification is required and the Trustee will deliver a Certificated Note that does not bear the Restricted Legend. (c) No certification is required in connection with any transfer or exchange of any Note (or a beneficial interest therein) (1) after such Note is eligible for resale pursuant to Rule 144(k) under the Securities Act (or a successor provision); provided that the Company has provided the Trustee with an Officers' Certificate to that effect, and the Company may require from any Person requesting a transfer or exchange in reliance upon this clause (1) an Opinion of Counsel and any other reasonable certifications and evidence in order to support such certificate; or (2)(x) sold pursuant to an effective registration statement, pursuant to the Registration Rights Agreement or otherwise or (y) which is validly tendered for exchange into an Exchange Note pursuant to an Exchange Offer. Any Certificated Note delivered in reliance upon this paragraph will not bear the Restricted Legend. (d) The Trustee will retain copies of all certificates, opinions and other documents received in connection with the registration of a transfer or exchange of a Note (or a beneficial interest therein), and the Company will have the right to inspect and make copies thereof at any reasonable time upon written notice to the Trustee. SECTION 2.11. Temporary Offshore Global Notes. (a) Each Note originally sold by the Initial Purchasers in reliance upon Regulation S will be evidenced by one or more Offshore Global Notes that bear the Temporary Offshore Global Note Legend. (b) An owner of a beneficial interest in a Temporary Offshore Global Note (or a Person acting on behalf of such an owner) may provide to the Trustee (and the Trustee will accept) a duly completed Certificate of Beneficial Ownership at any time after the Restricted Period (it being understood that the Trustee will not accept any such certificate during the Restricted Period). Promptly after acceptance of a Certificate of Beneficial Ownership with respect to such a beneficial interest, the Trustee will cause such beneficial interest to be exchanged for an equivalent beneficial interest in a Permanent Offshore Global Note, and will (x) permanently reduce the principal amount of such Temporary Offshore Global Note by the amount of such beneficial interest and (y) increase the principal amount of such Permanent Offshore Global Note by the amount of such beneficial interest. (c) Notwithstanding anything to the contrary contained herein, beneficial interests in a Temporary Offshore Global Note may be held through the Depositary only through Euroclear and Clearstream and their respective direct and indirect participants. 37 44 (d) Notwithstanding paragraph (b), if after the Restricted Period any Initial Purchaser owns a beneficial interest in a Temporary Offshore Global Note, such Initial Purchaser may, upon written request to the Trustee accompanied by a certification as to its status as an Initial Purchaser, exchange such beneficial interest for an equivalent beneficial interest in a Permanent Offshore Global Note, and the Trustee will comply with such request and will (x) permanently reduce the principal amount of such Temporary Offshore Global Note by the amount of such beneficial interest and (y) increase the principal amount of such Permanent Offshore Global Note by the amount of such beneficial interest. ARTICLE 3 REDEMPTION; OFFER TO PURCHASE SECTION 3.01. Optional Redemption. At any time and from time to time on or after April 15, 2005, the Company may redeem the Notes, in whole or in part, at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest to the redemption date.
12-MONTH PERIOD COMMENCING APRIL 15 IN YEAR PERCENTAGE - ----------------------------- ------------------- 2005 ........................ 105.875% 2006 ........................ 102.938% 2007 ........................ 100.000%
SECTION 3.02. Redemption with Proceeds of Public Equity Offering. At any time and from time to time prior to April 15, 2004, the Company may redeem Notes with the net cash proceeds received by the Company from any Public Equity Offering at a redemption price equal to 111.75% of the principal amount plus accrued and unpaid interest to the redemption date, in an aggregate principal amount for all such redemptions not to exceed 35% of the original aggregate principal amount of the Notes, provided that (1) in each case the redemption takes place not later than 60 days after the closing of the related Public Equity Offering, and (2) not less than 65% of the aggregate principal amount of the Notes remains outstanding immediately thereafter. SECTION 3.03. Method and Effect of Redemption. (a) If the Company elects to redeem Notes, it must notify the Trustee of the redemption date and the principal amount of Notes to be redeemed by delivering an Officers' Certificate at least 60 days before the redemption date (unless a shorter period is satisfactory to the Trustee). If fewer than all of the Notes are being redeemed, the Officers' Certificate must also specify a record date 38 45 not less than 15 days after the date of the notice of redemption is given to the Trustee, and the Trustee will select the Notes to be redeemed pro rata, by lot or by any other method the Trustee in its sole discretion deems fair and appropriate, in denominations of $1,000 principal amount and multiples thereof. The Trustee will notify the Company promptly of the Notes or portions of Notes to be called for redemption. Notice of redemption must be sent by the Company or at the Company's request, by the Trustee in the name and at the expense of the Company, to Holders whose Notes are to be redeemed at least 30 days but not more than 60 days before the redemption date. (b) The notice of redemption will identify the Notes to be redeemed and will include or state the following: (1) the redemption date; (2) the redemption price, including the portion thereof representing any accrued interest; (3) the place or places where Notes are to be surrendered for redemption; (4) Notes called for redemption must be so surrendered in order to collect the redemption price; (5) on the redemption date the redemption price will become due and payable on Notes called for redemption, and interest on Notes called for redemption will cease to accrue on and after the redemption date; (6) if any Note is redeemed in part, on and after the redemption date, upon surrender of such Note, new Notes equal in principal amount to the unredeemed portion will be issued; and (7) if any Note contains a CUSIP or CINS number, no representation is being made as to the correctness of the CUSIP or CINS number either as printed on the Notes or as contained in the notice of redemption and that the Holder should rely only on the other identification numbers printed on the Notes. (c) Once notice of redemption is sent to the Holders, Notes called for redemption become due and payable at the redemption price on the redemption date, and upon surrender of the Notes called for redemption, the Company shall redeem such Notes at the redemption price. Commencing on the redemption date, Notes redeemed will cease to accrue interest. Upon surrender of any Note redeemed in part, the Holder will receive a new Note equal in principal amount to the unredeemed portion of the surrendered Note. SECTION 3.04. Offer to Purchase. (a) An "OFFER TO PURCHASE" means an offer by the Company to purchase Notes as required by the Indenture. An Offer to Purchase must be made by written offer (the "OFFER") sent to the Holders. The Company will 39 46 notify the Trustee at least 15 days (or such shorter period as is acceptable to the Trustee) prior to sending the offer to Holders of its obligation to make an Offer to Purchase, and the offer will be sent by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. (b) The offer must include or state the following as to the terms of the Offer to Purchase: (1) the provision of the Indenture pursuant to which the Offer to Purchase is being made; (2) the aggregate principal amount of the outstanding Notes offered to be purchased by the Company pursuant to the Offer to Purchase (including, if less than 100%, the manner by which such amount has been determined pursuant to the Indenture) (the "PURCHASE AMOUNT"); (3) the purchase price, including the portion thereof representing accrued interest; (4) an expiration date (the "EXPIRATION DATE") not less than 30 days or more than 60 days after the date of the offer, and a settlement date for purchase (the "PURCHASE DATE") not more than five Business Days after the expiration date; (5) information concerning the business of the Company and its Subsidiaries which the Company in good faith believes will enable the Holders to make an informed decision with respect to the Offer to Purchase, at a minimum to include (A) the most recent annual and quarterly financial statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the Company, (B) a description of material developments in the Company's business subsequent to the date of the latest of the financial statements (including a description of the events requiring the Company to make the Offer to Purchase), and (C) if applicable, appropriate pro forma financial information concerning the Offer to Purchase and the events requiring the Company to make the Offer to Purchase; (6) a Holder may tender all or any portion of its Notes, subject to the requirement that any portion of a Note tendered must be in a multiple of $1,000 principal amount; 40 47 (7) the place or places where Notes are to be surrendered for tender pursuant to the Offer to Purchase; (8) each Holder electing to tender a Note pursuant to the offer will be required to surrender such Note at the place or places specified in the offer prior to the close of business on the expiration date (such Note being, if the Company or the Trustee so requires, duly endorsed or accompanied by a duly executed written instrument of transfer); (9) interest on any Note not tendered, or tendered but not purchased by the Company pursuant to the Offer to Purchase, will continue to accrue; (10) on the purchase date the purchase price will become due and payable on each Note accepted for purchase, and interest on Notes purchased will cease to accrue on and after the purchase date; (11) Holders are entitled to withdraw Notes tendered by giving notice, which must be received by the Company or the Trustee not later than the close of business on the expiration date, setting forth the name of the Holder, the principal amount of the tendered Notes, the certificate number of the tendered Notes and a statement that the Holder is withdrawing all or a portion of the tender; (12) (i) if Notes in an aggregate principal amount less than or equal to the purchase amount are duly tendered and not withdrawn pursuant to the Offer to Purchase, the Company will purchase all such Notes, and (ii) if the Offer to Purchase is for less than all of the outstanding Notes and Notes in an aggregate principal amount in excess of the purchase amount are tendered and not withdrawn pursuant to the offer, the Company will purchase Notes having an aggregate principal amount equal to the purchase amount on a pro rata basis, with adjustments so that only Notes in multiples of $1,000 principal amount will be purchased; (13) if any Note is purchased in part, new Notes equal in principal amount to the unpurchased portion of the Note will be issued; and (14) if any Note contains a CUSIP or CINS number, no representation is being made as to the correctness of the CUSIP or CINS number either as printed on the Notes or as contained in the offer and that the Holder should rely only on the other identification numbers printed on the Notes. (c) Prior to the purchase date, the Company will accept tendered Notes for purchase as required by the Offer to Purchase and deliver to the Trustee all Notes so accepted together with an Officers' Certificate specifying which Notes have been accepted for purchase. On the purchase date the purchase price will become due and payable on each Note accepted for purchase, and interest on Notes purchased will cease to accrue on and after the purchase date. The Trustee will promptly return to Holders 41 48 any Notes not accepted for purchase and send to Holders new Notes equal in principal amount to any unpurchased portion of any Notes accepted for purchase in part. (d) The Company will comply with Rule 14e-1 under the Exchange Act and all other applicable laws in making any Offer to Purchase, and the above procedures will be deemed modified as necessary to permit such compliance. (e) The Company will timely repay Debt or obtain consents as necessary under, or terminate, any agreements or instruments that would otherwise prohibit an Offer to Purchase required to be made pursuant to the Indenture. ARTICLE 4 COVENANTS SECTION 4.01. Payment of Notes. (a) The Company agrees to pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and the Indenture. Not later than 9:00 A.M. (New York City time) on the due date of any principal of or interest on any Notes, or any redemption or purchase price of the Notes, the Company will deposit with the Trustee (or Paying Agent) money in immediately available funds sufficient to pay such amounts, provided that if the Company or any Affiliate of the Company is acting as Paying Agent, it will, on or before each due date, segregate and hold in a separate trust fund for the benefit of the Holders a sum of money sufficient to pay such amounts until paid to such Holders or otherwise disposed of as provided in the Indenture. In each case the Company will promptly notify the Trustee of its compliance with this paragraph. (b) An installment of principal or interest will be considered paid on the date due if the Trustee (or Paying Agent, other than the Company or any Affiliate of the Company) holds on that date money designated for and sufficient to pay the installment. If the Company or any Affiliate of the Company acts as Paying Agent, an installment of principal or interest will be considered paid on the due date only if paid to the Holders. (c) The Company agrees to pay interest on overdue principal and overdue installments of interest at the rate per annum specified in the Notes. (d) Payments in respect of the Notes represented by the Global Notes are to be made by wire transfer of immediately available funds to the accounts specified by the Holders of the Global Notes. With respect to Certificated Notes, the Company will make all payments by mailing a check to each Holder's registered address or, at the Company's option, by wire transfer of immediately available funds to the accounts specified by the Holders thereof. SECTION 4.02. Maintenance of Office or Agency. The Company will maintain in the Borough of Manhattan, The City of New York or Wilmington, Delaware, an office or agency where Notes may be surrendered for registration of transfer or exchange or for presentation for payment and where notices and demands to or upon the Company in respect of the Notes and the Indenture may be served. The Company hereby initially 42 49 designates the Corporate Trust Office of the Trustee as such office of the Company. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served to the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Notes may be surrendered or presented for any of such purposes and may from time to time rescind such designations. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. SECTION 4.03. Existence. The Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence and the existence of each of its Restricted Subsidiaries in accordance with their respective organizational documents, and the material rights, licenses and franchises of the Company and each Restricted Subsidiary, provided that the Company is not required to preserve any such right, license or franchise, or the existence of any Restricted Subsidiary, if in the Company's judgment the maintenance or preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries taken as a whole; and provided further that this Section does not prohibit any transaction otherwise permitted by Section 4.13 or Article 5. SECTION 4.04. Payment of Taxes and Other Claims. The Company will pay or discharge, and cause each of its Subsidiaries to pay or discharge before the same become delinquent (i) all material taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or its income or profits or property, and (ii) all material lawful claims for labor, materials and supplies that, if unpaid, might by law become a Lien upon the property of the Company or any Subsidiary, other than any such tax, assessment, charge or claim the amount, applicability or validity of which is being contested in good faith by appropriate proceedings and for which adequate reserves, if necessary, have been established. SECTION 4.05. Maintenance of Properties and Insurance. (a) The Company will cause all properties used or useful in the conduct of its business or the business of any of its Restricted Subsidiaries to be maintained and kept in good condition, repair and working order as in the judgment of the Company may be necessary so that the business of the Company and its Restricted Subsidiaries may be properly and advantageously conducted at all times; provided that nothing in this Section prevents the Company or any Restricted Subsidiary from discontinuing the use, operation or maintenance of any of such properties or disposing of any of them, if such discontinuance or disposal is, in the judgment of the Company, desirable in the conduct of the business of the Company and its Restricted Subsidiaries taken as a whole. (b) The Company will provide or cause to be provided, for itself and its Restricted Subsidiaries, insurance (including appropriate self-insurance) against loss or 43 50 damage of the kinds customarily insured against by corporations similarly situated and owning like properties, including, but not limited to, products liability insurance, physical damage insurance and public liability insurance, with reputable insurers, in such amounts, with such deductibles and by such methods as are customary for corporations similarly situated in the industry in which the Company and its Restricted Subsidiaries are then conducting business. SECTION 4.06. Limitation on Debt and Disqualified or Preferred Stock. (a) The Company (1) will not, and will not permit any of its Restricted Subsidiaries to, Incur any Debt; and (2) will not, and will not permit any Restricted Subsidiary to, Incur any Disqualified Stock, or permit any of its Restricted Subsidiaries to Incur any Preferred Stock (other than Disqualified or Preferred Stock of Restricted Subsidiaries held by the Company or a Wholly-Owned Restricted Subsidiary, so long as it is so held); provided that the Company or any Guarantor may Incur Debt and the Company or any Guarantor may Incur Disqualified Stock if, on the date of the Incurrence, after giving effect to the Incurrence and the receipt and application of the proceeds therefrom, the Fixed Charge Coverage Ratio is not less than 2.50 to 1. (b) Notwithstanding the foregoing, the Company and, to the extent provided below, any Restricted Subsidiary may Incur the following ("PERMITTED DEBT"): (1) Debt of the Company and any Guarantor pursuant to the Credit Agreement, and Guarantees of such Debt by the Company or any Guarantor; provided that the aggregate principal amount at any time outstanding under the Credit Agreement does not exceed the greater of (i) $100.0 million, less the aggregate amount of all such Debt under the Credit Agreement permanently repaid pursuant to payments thereof in accordance with Section 4.13(d)(A) and (ii) the sum of the amounts equal to (x) 85% of the book value of the accounts receivable of the Company and its consolidated Restricted Subsidiaries and (y) 65% of the book value of the inventory of the Company and its consolidated Restricted Subsidiaries (but excluding any accounts receivable and inventory that are ineligible at such time for inclusion in the calculation of a borrowing base or similar borrowing limit (if any) under the Credit Agreement), in each case as of the most recently ended fiscal quarter of the Company for which financial statements have been provided (or, if not timely provided, required to be provided) pursuant to Section 4.17; (2) Debt of the Company or any Restricted Subsidiary to the Company or any Wholly Owned Restricted Subsidiary so long as such Debt continues to be owed to the Company or a Wholly Owned Restricted Subsidiary 44 51 and which is, if the obligor is the Company or a Guarantor and the obligee is not the Company or a Guarantor, subordinated in right of payment to the Notes; (3) Debt of the Company pursuant to the Notes and Debt of any Guarantor pursuant to a Note Guaranty of the Notes; (4) Debt of the Company or any Restricted Subsidiary ("PERMITTED REFINANCING DEBT") constituting an extension or renewal of, replacement of, or substitution for, or issued in exchange for, or the net proceeds of which are used to repay, redeem, repurchase, refinance or refund, including by way of defeasance, (all of the above, for purpose of this clause, "REFINANCE") then outstanding Debt in an amount not to exceed the principal amount of the Debt so refinanced, plus premiums, fees and expenses; provided that (A) in case the Debt to be refinanced is subordinated in right of payment to the Notes, the new Debt, by its terms or by the terms of any agreement or instrument pursuant to which it is outstanding, is expressly made subordinate in right of payment to the Notes at least to the extent that the Debt to be refinanced is subordinated to the Notes, (B) the new Debt does not have a Stated Maturity prior to the Stated Maturity of the Debt to be refinanced, and the Average Life of the new Debt is at least equal to the remaining Average Life of the Debt to be refinanced, (C) in no event may Debt of the Company be refinanced pursuant to this clause by means of any Debt of any Restricted Subsidiary that is not a Guarantor and in no event may Debt of a Guarantor be refinanced pursuant to this clause by means of any Debt of any Restricted Subsidiary that is not a Guarantor, and (D) Debt Incurred pursuant to clauses (1), (2), (5), (6), (10) and (11) of this Section 4.06(b) may not be refinanced pursuant to this clause; (5) Hedging Agreements of the Company or any Restricted Subsidiary entered into in the ordinary course of business for the purpose of limiting risks associated with the business of the Company and its Restricted Subsidiaries and not for speculation; (6) Debt of the Company or any Restricted Subsidiary with respect to letters of credit and bankers' acceptances issued in the ordinary course of business and not supporting Debt, including letters of credit supporting performance, surety or appeal bonds or indemnification, adjustment of purchase price or similar obligations incurred in connection with the disposition of any business or assets; provided that the maximum liability in connection with any 45 52 disposition shall not exceed the gross proceeds actually received by the Company or that Restricted Subsidiary in connection with the disposition; (7) Acquired Debt , provided that after giving effect to the Incurrence thereof, the Company could Incur at least $1.00 of Debt under Section 4.06(a); (8) Debt of the Company or any Restricted Subsidiary outstanding on the Issue Date (and, for purposes of clause (4) (D), not otherwise constituting Permitted Debt); (9) Debt of the Company or any Restricted Subsidiary, which may include Capital Leases, Incurred no later than 180 days after the date of purchase or completion of construction or improvement of property for the purpose of financing all or any part of the purchase price or cost of construction or improvement, provided that the aggregate principal amount of any Debt Incurred pursuant to this clause may not exceed (a) $30.0 million less (b) the aggregate outstanding principal amount of Permitted Refinancing Debt Incurred to refinance Debt Incurred under this clause (9); (10) Guarantees by the Company or any Guarantor of any Debt of the Company or any Guarantor permitted to be incurred under any other clause of this Section 4.06; and (11) other Debt of the Company or any Guarantor or of any Foreign Restricted Subsidiary in an aggregate principal amount for all Debt under this clause (11) at any time outstanding not to exceed $10.0 million. (c) For purposes of determining compliance with Section 4.06, in the event that an item of Debt or any portion thereof meets the criteria of more than one of the categories of Permitted Debt described in clauses (b)(1) through (11) above, or is entitled to be incurred pursuant to clause (a), the Company shall, in its sole discretion, classify such item of Debt or any portion thereof in any manner that complies with this covenant and such item of debt or portion thereof will be treated as having been incurred pursuant to only the clause or clauses designated by the Company. SECTION 4.07. Limitation on Restricted Payments. (a) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly (the payments and other actions described in the following clauses being collectively "RESTRICTED PAYMENTS"): (i) declare or pay any dividend or make any distribution on its Equity Interests (other than dividends or distributions paid in the Company's Qualified Stock) held by Persons other than the Company or any of its Wholly Owned Restricted Subsidiaries; 46 53 (ii) purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Company or any Restricted Subsidiary held by Persons other than the Company or any of its Wholly Owned Restricted Subsidiaries; (iii) repay, redeem, repurchase, defease or otherwise acquire or retire for value, or make any payment on or with respect to, any Subordinated Debt except a payment of interest or principal at Stated Maturity; or (iv) make any Investment other than a Permitted Investment; unless, at the time of, and after giving effect to, the proposed Restricted Payment: (1) no Default has occurred and is continuing, (2) the Company could Incur at least $1.00 of Debt under Section 4.06(a), and (3) the aggregate amount expended for all Restricted Payments made on or after the Issue Date would not, subject to paragraph (c), exceed the sum of (A) 50% of the aggregate amount of the Consolidated Net Income (or, if the Consolidated Net Income is a loss, minus 100% of the amount of the loss) accrued on a cumulative basis during the period, taken as one accounting period, beginning on April 1, 2001 and ending on the last day of the Company's most recently completed fiscal quarter for which financial statements have been provided (or if not timely provided, required to be provided) pursuant to Section 4.17, plus (B) subject to paragraph (c), the aggregate net cash proceeds received by the Company (other than from a Subsidiary) after the Issue Date from the issuance and sale of its Qualified Equity Interests, including by way of issuance of its Disqualified Equity Interests or Debt to the extent since converted into Qualified Equity Interests of the Company, plus (C) an amount equal to the sum, for all Unrestricted Subsidiaries, of the following: (x) the cash return, after the Issue Date, on Investments in an Unrestricted Subsidiary made after the Issue Date pursuant to this paragraph (a) as a result of any sale for cash, repayment, redemption, liquidating distribution or other cash realization (not included in Consolidated Net Income), plus (y) the portion (proportionate to the Company's equity interest in such Subsidiary) of the fair market value of the assets less liabilities of an Unrestricted Subsidiary at the time 47 54 such Unrestricted Subsidiary is designated a Restricted Subsidiary, not to exceed, in the case of any Unrestricted Subsidiary, the amount of Investments made after the Issue Date by the Company and its Restricted Subsidiaries in such Unrestricted Subsidiary pursuant to this paragraph (a), plus (D) the cash return, after the Issue Date, on any other Investment made after the Issue Date pursuant to this paragraph (a), as a result of any sale for cash, repayment, redemption, liquidating distribution or other cash realization (not included in Consolidated Net Income), not to exceed the amount of such Investment so made. The amount expended in any Restricted Payment, if other than in cash, will be deemed to be the fair market value of the relevant non-cash assets, as determined in good faith by the Board of Directors, whose determination will be conclusive and evidenced by a Board Resolution. (b) The foregoing will not prohibit: (1) the payment of any dividend within 60 days after the date of declaration thereof if, at the date of declaration, such payment would comply with paragraph (a); (2) dividends or distributions by a Restricted Subsidiary payable, on a pro rata basis or on a basis more favorable to the Company (or the relevant Restricted Subsidiary holding the Capital Stock of such Restricted Subsidiary, as applicable), to all holders of any class of Capital Stock of such Restricted Subsidiary a majority of which is held, directly or indirectly through Restricted Subsidiaries, by the Company; (3) the repayment, redemption, repurchase, defeasance or other acquisition or retirement for value of Subordinated Debt with the proceeds of, or in exchange for, Permitted Refinancing Debt; (4) the purchase, redemption or other acquisition or retirement for value of Equity Interests of the Company in exchange for, or out of the proceeds of a substantially concurrent offering of, Qualified Equity Interests of the Company; (5) the repayment, redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Debt of the Company in exchange for, or out of the proceeds of, a substantially concurrent offering of, Qualified Equity Interests of the Company; 48 55 (6) the purchase, redemption or other acquisition or retirement for value of Equity Interests of the Company held by officers, directors or employees or former officers, directors or employees (or their estates or beneficiaries), upon death, disability, retirement, severance or termination of employment, or in order to satisfy tax withholding obligations of such persons upon the exercise of options or the vesting of performance shares, or pursuant to any agreement under which the Equity Interests were issued; provided that the aggregate cash consideration paid therefor after the Issue Date does not exceed an aggregate amount of $8.0 million; (7) (A) Investments in any Joint Venture or Unrestricted Subsidiary organized to construct, acquire, own and/or operate a facility in a Permitted Business in the European Union, in an aggregate amount that, together with all other Investments made pursuant to this clause (7)(A), does not exceed $15.0 million and (B) any Limited Recourse Guarantee by any Joint Venture Holding Company holding such Investment to secure Non-Recourse Debt of such Joint Venture or Unrestricted Subsidiary; (8) any other Restricted Payment which, together with all other Restricted Payments made pursuant to this clause (8) on or after the Issue Date, does not exceed $10.0 million; and (9) the payment by the Company or any Restricted Subsidiary of any purchase price adjustment in connection with the acquisition of the Hawesville facility pursuant to the provisions of the Stock Purchase Agreement between the Company and Southwire Company as in effect on the Issue Date; provided that, in the case of clauses (6), (7) and (8) no Default has occurred and is continuing or would occur as a result thereof and, provided further that, in the case of clause (7), after giving effect to the proposed Investment, the Company could Incur at least $1.00 of Debt under Section 4.06(a). (c) Proceeds of the issuance of Qualified Equity Interests will be included under clause (3) of paragraph (a) only to the extent they are not applied as described in clause (4) or (5) of paragraph (b). Restricted Payments permitted pursuant to clauses (2) (to the extent paid to the Company or any Restricted Subsidiary of the Company), (3), (4), (5), (6), (7) or (9) of paragraph (b) will not be included in making the calculations under clause (3) of paragraph (a). (d) In the case of any Restricted Payment proposed to be made on or prior to April 2, 2003, if this covenant requires, as a condition to such Restricted Payment, that the Company has the ability to Incur at least $1.00 of Debt under Section 4.06(a) at the time of, and after giving effect to, the proposed Restricted Payment, then, for purposes of this covenant only, the reference in such paragraph (a) to a Fixed Charge Coverage Ratio of "not less than 2.50 to 1" shall instead be read as a Fixed Charge Coverage Ratio of "not less than 2.25 to 1." 49 56 Exhibit 4.2 SECTION 4.08. Limitation on Liens. The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, incur or permit to exist any Lien of any nature whatsoever on any of its properties or assets, whether owned at the Issue Date or thereafter acquired, other than Permitted Liens, provided, however, that the foregoing will not apply, with respect to any such properties or assets, other than Restricted Assets, to the extent the Company or any Restricted Subsidiary effectively provides that the Notes shall be secured equally and ratably with (or, if the obligation to be secured by the Lien is subordinated in right of payment to the Notes or any Note Guaranty, prior to) the obligations so secured for so long as such obligations are so secured. SECTION 4.09. Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries. (a) Except as provided in paragraph (b), the Company will not, and will not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any Restricted Subsidiary to (1) pay dividends or make any other distributions on any Equity Interests of the Restricted Subsidiary owned by the Company or any other Restricted Subsidiary, (2) pay any Debt or other obligation owed to the Company or any other Restricted Subsidiary, (3) make loans or advances to the Company or any other Restricted Subsidiary, or (4) transfer any of its property or assets to the Company or any other Restricted Subsidiary. (b) The provisions of paragraph (a) do not apply to any encumbrances or restrictions (1) existing on the Issue Date in the Credit Agreement, the Indenture or any other agreements in effect on the Issue Date, and any extensions, renewals, replacements or refinancings of any of the foregoing; provided the encumbrances and restrictions in the extension, renewal, replacement or refinancing are, taken as a whole, no less favorable in any material respect to the Noteholders than the encumbrances or restrictions being extended, renewed, replaced or refinanced; (2) existing under or by reason of applicable law; (3) existing (A) with respect to any Person, or with respect to the property or assets of any Person, at the time the Person is acquired by the Company or any Restricted Subsidiary, or 50 57 (B) with respect to any Unrestricted Subsidiary at the time it is designated or is deemed to become a Restricted Subsidiary, which encumbrances or restrictions (i) are not applicable to any other Person or the property or assets of any other Person and (ii) were not put in place in anticipation of such event, and any extensions, renewals, replacements or refinancings of any of the foregoing, provided the encumbrances and restrictions in the extension, renewal, replacement or refinancing are, taken as a whole, no less favorable in any material respect to the Noteholders than the encumbrances or restrictions being extended, renewed, replaced or refinanced; (4) of the type described in clause (a)(4) arising or agreed to (i) in the ordinary course of business that restrict in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease or license, (ii) with respect to any assets comprising a Permitted Business in which the Company or any Restricted Subsidiary has ownership of an undivided interest, pursuant to the agreements under which such interest is owned or maintained, including, without limitation, options, put and call arrangements, rights of first refusal and similar rights, provided that such restrictions are consistent with the Company's past practice, or (iii) in the ordinary course of business by virtue of any Lien on, or agreement to transfer, option or similar right with respect to any property or assets of, the Company or any Restricted Subsidiary; (5) with respect to a Restricted Subsidiary and imposed pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock of or property and assets of the Restricted Subsidiary that is permitted by the Indenture; (6) on the ability of Restricted Subsidiaries to consummate transactions of the type described in clause (a)(1), (2), (3) or (4) provided for by any Indebtedness permitted to be incurred under the Indenture; provided that such restrictions are not more restrictive than the restrictions contained in the Indenture; or (7) required pursuant to Section 4.06(b)(2). SECTION 4.10. Limitation on Sale or Issuance of Equity Interests of Restricted Subsidiaries. The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, sell or issue any Equity Interests of a Restricted Subsidiary unless 51 58 (1) the sale or issuance is to the Company or a Wholly Owned Restricted Subsidiary, (2) the sale or issuance is of Capital Stock representing directors' qualifying shares or Capital Stock required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary, (3) (i) if, after giving pro forma effect to the sale or issuance, the Restricted Subsidiary upon such sale or issuance would no longer be a Restricted Subsidiary and all remaining Investments of the Company and the Restricted Subsidiaries in such Person are permitted under Section 4.07 and (ii) the Company complies with Section 4.13 with respect to the sale or issuance, or (4) (i) such sale or issuance is a sale or issuance of Common Stock of a Restricted Subsidiary that is a Guarantor and remains a Restricted Subsidiary that is a Guarantor after giving effect to the sale, and (ii) the Company complies with Section 4.13 with respect to the sale or issuance. SECTION 4.11. Guaranties by Restricted Subsidiaries. If the Company or any of its Restricted Subsidiaries acquires or creates a Domestic Restricted Subsidiary after the Issue Date, the new Domestic Restricted Subsidiary must provide a Note Guaranty. A Restricted Subsidiary required to provide a Note Guaranty shall execute a supplemental indenture substantially in the form of Exhibit B, and deliver an Opinion of Counsel to the Trustee to the effect that the supplemental indenture has been duly authorized, executed and delivered by the Restricted Subsidiary and constitutes a valid and binding obligation of the Restricted Subsidiary, enforceable against the Restricted Subsidiary in accordance with its terms (subject to customary exceptions). SECTION 4.12. Repurchase of Notes upon a Change of Control. Not later than 30 days following a Change of Control, the Company will make an Offer to Purchase all outstanding Notes at a purchase price equal to 101% of the principal amount plus accrued interest to the date of purchase. SECTION 4.13. Limitation on Asset Sales. The Company will not, and will not permit any Restricted Subsidiary to, make any Asset Sale unless the following conditions are met: (a) The Asset Sale is for fair market value, as determined in good faith by the Board of Directors. (b) At least 75% of the consideration consists of cash received at closing; provided that to the extent that any disposition in such Asset Sale was of Restricted Assets, the non-cash consideration received is pledged as Collateral under the Security Documents substantially simultaneously with such sale, in accordance with the requirements set forth in Section 4.19(c). 52 59 For purposes of this clause (b): (i) Debt (other than Subordinated Debt) or other obligations of the Company or a Restricted Subsidiary assumed by the purchaser pursuant to a customary novation agreement (unless and to the extent that the assets disposed of in such Asset Sale are Restricted Assets), and (ii) instruments or securities received from the purchaser that are promptly, but in any event within 30 days of the closing, converted by the Company to cash, to the extent of the cash actually so received shall be considered cash received at closing. (c) If the assets subject to the Asset Sale constitute Collateral, the Asset Sale satisfies the requirements of Section 11.02. (d) An amount equal to the Net Cash Proceeds from the Asset Sale may be used (i) unless the disposition was of Restricted Assets, to permanently repay Debt under the Credit Agreement (and in the case of a revolving credit, permanently reduce the commitment thereunder by such amount), or (ii) to acquire all or substantially all of the assets of a Permitted Business, or a majority of the Voting Stock of another Person that thereupon becomes a Guarantor engaged in a Permitted Business, or to make capital expenditures or otherwise acquire long-term assets (including an undivided interest therein) that are to be used in a Permitted Business; provided that to the extent that any disposition in such Asset Sale was of Restricted Assets, the assets (including Voting Stock) acquired with the Net Cash Proceeds thereof are pledged as Collateral under the Security Documents substantially simultaneously with such acquisition, in accordance with the requirements set forth in Section 4.19(c). (e) The Net Cash Proceeds of an Asset Sale not applied pursuant to clause (d) within 360 days of the Asset Sale constitute "EXCESS PROCEEDS". Excess Proceeds of less than $10.0 million will be carried forward and accumulated. When accumulated Excess Proceeds equal or exceed $10.0 million, the Company must, within 30 days, make an Offer to Purchase Notes having a principal amount equal to (i) accumulated Excess Proceeds, multiplied by (ii) (a) if the assets constitute Restricted Assets, one or (b) otherwise, a fraction (x) the numerator of which is equal to the outstanding principal amount of the Notes and (y) the denominator of which is equal to the outstanding principal amount of the Notes and all pari passu Debt similarly 53 60 required to be repaid, redeemed or tendered for in connection with the Asset Sale, rounded down to the nearest $1,000. The purchase price for the Notes will be 100% of the principal amount plus accrued interest to the date of purchase. Upon completion of the Offer to Purchase, Excess Proceeds will be reset at zero, and any Excess Proceeds remaining after consummation of the Offer to Purchase may be used for any purpose not otherwise prohibited by the Indenture. (f) To the extent that any Net Cash Proceeds are from a disposition of Restricted Assets, the fair market value of which exceeds $2.5 million in the aggregate, such Net Cash Proceeds will be deposited in the Cash Collateral Account pursuant to Section 11.03 pending application pursuant to clause (d) or (e) above. SECTION 4.14. Limitation on Transactions with Shareholders and Affiliates. (a) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into, renew or extend any transaction or arrangement (including, without limitation, the purchase, sale, lease or exchange of property or assets, or the rendering of any service) with (x) any holder, or any Affiliate of any holder, of 5% or more of any class of Capital Stock of the Company or (y) any Affiliate of the Company or any Restricted Subsidiary (a "RELATED PARTY TRANSACTION"), except upon fair and reasonable terms no less favorable to the Company or the Restricted Subsidiary than could be obtained in a comparable arm's-length transaction with a Person that is not an Affiliate of the Company. (b) Any Related Party Transaction or series of Related Party Transactions with an aggregate value in excess of $5.0 million must first be approved by a majority of the members of the Board of Directors who are disinterested in the subject matter of the transaction (the "DISINTERESTED DIRECTORS") pursuant to a Board Resolution delivered to the Trustee. Prior to entering into any Related Party Transaction or series of Related Party Transactions with an aggregate value in excess of $25.0 million, the Company must in addition obtain and deliver to the Trustee a favorable written opinion from a nationally recognized investment banking firm as to the fairness of the transaction to the Company and its Restricted Subsidiaries from a financial point of view. In the event of any Related Party Transaction that consists of any asset acquisition or disposition and a related purchase or supply agreement, the transaction shall be considered as a whole in determining its compliance with this covenant. The foregoing paragraphs do not apply to (1) any transaction between the Company and any of its Restricted Subsidiaries or between Restricted Subsidiaries of the Company; (2) the payment of reasonable and customary regular fees to directors of the Company who are not employees of the Company; 54 61 (3) any Restricted Payments of a type described in Section 4.07(a)(i) and (ii) if permitted by that covenant; (4) transactions or payments pursuant to any employee, officer or director compensation or benefit plans or arrangements entered into in the ordinary course of business; (5) the entering into of Hedging Agreements or similar arrangements with Glencore International AG or any of its Affiliates on a basis consistent with past practice and upon fair and reasonable terms no less favorable to the Company or the Restricted Subsidiary than could reasonably be expected to be obtained in a comparable arm's-length transaction with a Person that is not an Affiliate of the Company; (6) agreements or arrangements with Glencore International AG or any of its Affiliates relating to (a) the procurement of raw materials, including alumina, or (b) the sale of aluminum products; provided that such transactions are upon fair and reasonable terms no less favorable to the Company or the Restricted Subsidiary than could reasonably be expected to be obtained in a comparable arms'-length transaction with a Person that is not an Affiliate of the Company; (7) the issuance of convertible preferred stock to Glencore on or about the Issue Date substantially on the terms described under "Description of Revolving Credit Facility and Convertible Preferred Stock" in the Offering Circular; (8) the sale by the Company or a Restricted Subsidiary to Glencore or one of its Affiliates on or about the Issue Date of a 20% undivided interest in a portion of the Hawesville facility and 100% ownership of a single potline; and any conveyance by the Company or a Restricted Subsidiary to Glencore or one of its Affiliates of an undivided interest in a part of the Hawesville facility owned wholly by the Company or such Restricted Subsidiary in exchange for an undivided interest in another part of the Hawesville facility owned wholly by Glencore or such Affiliate or any similar transaction, such that, after giving effect thereto, the Company or such Restricted Subsidiary owns an undivided 80% interest in the entire Hawesville facility, all substantially on the terms described under "The NSA Acquisition" in the Offering Circular; or (9) transactions pursuant to any contract or agreement in effect on the Issue Date (including, without limitation, transactions with Century Aluminum of Kentucky, LLC pursuant to the Hawesville owners agreement), in each case as amended, modified or replaced from time to time so long as the amended, modified or new agreements, taken as a whole, are no less favorable to the Company and its Restricted Subsidiaries than those in effect on the Issue Date. 55 62 SECTION 4.15. Line of Business. The Company will not, and will not permit any of its Restricted Subsidiaries, to engage in any business other than a Permitted Business (including indirectly, through its interest in a Joint Venture that is not a Restricted Subsidiary), except to an extent that so doing would not be material to the Company and its Restricted Subsidiaries, taken as a whole. SECTION 4.16. Designation of Restricted and Unrestricted Subsidiaries. (a) The Board of Directors may designate any Subsidiary, including a newly acquired or created Subsidiary, to be an Unrestricted Subsidiary if it meets the following qualifications and the designation would not cause a Default. (1) Such Subsidiary does not own any Capital Stock of the Company or any Restricted Subsidiary or any Restricted Assets or hold any Debt of, or any Lien on any property of, the Company or any Restricted Subsidiary. (2) At the time of designation, the designation would be permitted under Section 4.07. (3) To the extent the Debt of the Subsidiary is not Non-Recourse Debt, any Guarantee or other credit support thereof by the Company or any Restricted Subsidiary is permitted under Section 4.06 and Section 4.07. (4) The Subsidiary is not party to any transaction or arrangement with the Company or any Restricted Subsidiary that would not be permitted under Section 4.14. (5) Neither the Company nor any Restricted Subsidiary has any obligation to subscribe for additional Equity Interests of the Subsidiary or to maintain or preserve its financial condition or cause it to achieve specified levels of operating results except to the extent permitted by Section 4.06 and Section 4.07. Once so designated the Subsidiary will remain an Unrestricted Subsidiary, subject to paragraph (b). (b) (1) A Subsidiary previously designated an Unrestricted Subsidiary which at any time fails to meet the qualifications set forth in paragraph (a) will be deemed to become at that time a Restricted Subsidiary, subject to the consequences set forth in paragraph (d). (2) The Board of Directors may designate an Unrestricted Subsidiary to be a Restricted Subsidiary if the designation would not cause a Default. (c) Upon a Restricted Subsidiary becoming an Unrestricted Subsidiary, (1) all existing Investments of the Company and the Restricted Subsidiaries therein will be deemed made at that time; 56 63 (2) all existing transactions between it and the Company or any Restricted Subsidiary will be deemed entered into at that time; (3) it will be released at that time from its Note Guaranty, if any; and (4) it will cease to be subject to the provisions of the Indenture as a Restricted Subsidiary. (d) Upon an Unrestricted Subsidiary becoming, or being deemed to become, a Restricted Subsidiary, (1) all of its Debt and Disqualified or Preferred Stock will be deemed Incurred at that time for purposes of Section 4.06, but will not be considered the sale or issuance of Equity Interests for purposes of Section 4.10 or Section 4.13; (2) Investments therein previously charged under Section 4.07 will be credited thereunder; (3) it may be required to issue a Note Guaranty of the Notes pursuant to Section 4.11; and (4) it will thenceforward be subject to the provisions of the Indenture as a Restricted Subsidiary. (e) Any designation by the Board of Directors of a Subsidiary as a Restricted Subsidiary or Unrestricted Subsidiary will be evidenced to the Trustee by promptly filing with the Trustee a copy of the Board Resolution giving effect to the designation and an Officer's Certificate certifying that the designation complied with the foregoing provisions. SECTION 4.17. Financial Reports. (a) Whether or not the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company must provide the Trustee and Noteholders within the time periods specified in those sections with (1) all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10- K if the Company were required to file such forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to annual information only, a report thereon by the Company's certified independent accountants, and (2) all current reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports. 57 64 In addition, whether or not required by the Commission, the Company will, if the Commission will accept the filing, file a copy of all of the information and reports referred to in clauses (1) and (2) with the Commission for public availability within the time periods specified in the Commission's rules and regulations. In addition, the Company will make the information and reports available to securities analysts and prospective investors upon request. (b) For so long as any of the Notes remain outstanding and constitute "restricted securities" under Rule 144, the Company and the Guarantors will furnish to the Holders of the Notes and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. (c) All obligors on the Notes will comply with Section 314(a) of the Trust Indenture Act. (d) Delivery of these reports and information to the Trustee is for informational purposes only and the Trustee's receipt of them will not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). SECTION 4.18. Reports to Trustee. (a) The Company and each Guarantor will deliver to the Trustee within 120 days after the end of each fiscal year of the Company a certificate, executed by officers of the Company and each Guarantor, stating that the Company and each Guarantor has fulfilled its obligations hereunder or, if there has been a Default, specifying the Default and its nature and status. (b) The Company will deliver to the Trustee, as soon as possible and in any event within 30 days after the Company becomes aware or should reasonably become aware of the occurrence of a Default, an Officers' Certificate setting forth the details of the Default, and the action which the Company proposes to take with respect thereto. (c) The Company will deliver to the Trustee within 120 days after the end of each fiscal year of the Company a written statement by the Company's independent public accountants stating (i) that their audit examination has included a review of the terms of this Indenture and the Notes as they relate to accounting matters, and (ii) whether, in connection with their audit examination, any Default has come to their attention and, if a Default has come to their attention, specifying the nature and period of the existence thereof. (d) The Company shall furnish to the Trustee: (i) promptly after the execution and delivery of each of the Security Documents, an Opinion of Counsel stating that, in the opinion of such counsel, the Security Documents and other applicable financing statements or other instruments have been properly recorded and filed, to the extent necessary to 58 65 make effective the Lien intended to be created by the Security Documents, and reciting the details of such action or stating that, in the opinion of such counsel no such action is necessary to make such Liens effective; and (ii) within 120 days after the end of each fiscal year of the Company, an Opinion of Counsel, dated as of such date, either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re- recording and re-filing of the Security Documents, financing statements, continuation statements or other instruments as is necessary to maintain the Lien of the Security Documents and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to maintain such Lien, to the extent such opinion is required by Section 314(b) of the Trust Indenture Act. (e) The Company will notify the Trustee when any Notes become listed on any national securities exchange and of any delisting. SECTION 4.19. Impairment of Security Interest; Further Assurances. (a) The Company will not, and will not permit any Subsidiary to, take or knowingly or negligently omit to take, any action which action or omission might or would have the result of materially impairing the security interest with respect to the Collateral for the benefit of the Trustee and the Holders of the Notes, and the Company will not, and will not permit any of its Subsidiaries to, grant to any Person other than the Collateral Agent or the Trustee, as the case may be, for the benefit of the Trustee and the Holders of the Notes, any interest in any of the Collateral other than Permitted Encumbrances. (b) Subject to Section 4.13, the Company will continue to own all of the Equity Interests of each of its Subsidiaries that, directly or indirectly, own the plant, property and equipment constituting Collateral directly, or cause it to be owned by a Guarantor. (c) The Company and each of its Restricted Subsidiaries will execute and deliver any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents), that may be required under any applicable law, or that the Collateral Agent or the Trustee may reasonably request, to cause the Collateral Requirement to be and remain satisfied, all at the Company's expense. SECTION 4.20. Limitations on Certain Activities by Century Aluminum of Kentucky LLC. (a) Limitation on Debt. Century will use all reasonable efforts to ensure that Century Aluminum of Kentucky LLC will not incur any: 59 66 (i) Debt, other than Debt of the type described in Section 4.06(b)(5) on behalf of the owners of the Hawesville facility, or (ii) Disqualified or Preferred Stock, other than shares of such stock held pro rata by each of the owners of Common Stock thereof in accordance with their respective percentage ownership interests in the Hawesville facility. (b) Limitation on Sale of Equity Interests. Century Aluminum of Kentucky LLC will not issue or sell any of its Equity Interests unless, after giving effect thereto, Century and one or more of the Guarantors own a percentage of Equity Interests of Century Aluminum of Kentucky LLC that is not less than the Company's percentage ownership interest (including any ownership owned by any of its Restricted Subsidiaries) in the Hawesville facility. (c) Limitation on Liens. Century Aluminum of Kentucky LLC will not, directly or indirectly, incur or permit to exist any Lien of any nature whatsoever on any of its properties or assets, whether owned at the Issue Date or thereafter acquired, other than (i) Permitted Liens of the type described under clauses (2), (4), (5), (6), (8), (9), (13), (15) and (19) (with respect to Liens described under clauses (2) and (15)) of the definition thereof, assuming that references in clauses (8) and (15) to the Company or any Restricted Subsidiary were to Century Aluminum of Kentucky LLC, and (ii) Liens in favor of the owners of the Hawesville facility incurred in the ordinary course of business and not securing Debt pursuant to agreements in effect on the Issue Date. (d) Limitation on Asset Sales. (i) Century Aluminum of Kentucky LLC will not sell, lease, transfer or dispose (each, a "DISPOSITION") of the Hawesville power contract, or any rights to power thereunder, to any Person other than to the Company or one of its Restricted Subsidiaries that is a Guarantor, unless: (A) The consideration to be distributed to the Company or any Guarantor with respect to the Company's pro rata portion of the disposition is at least equal to the fair market value of the Company's pro rata portion of the contracts or rights disposed of, as determined in good faith by the Board of Directors. (B) At least 75% of the consideration with respect to the Company's pro rata portion consists of cash received at closing; provided that the Company's pro rata portion of the non-cash consideration received is pledged as Collateral under the Security Documents substantially simultaneously with such disposition, in accordance with the requirements set forth in Section 4.19(c). 60 67 For purposes of this clause (B), instruments received from the purchaser that are promptly, but in any event within 30 days of the closing, converted by the Company or the applicable Guarantor to cash, to the extent of the cash actually so received, shall be considered cash received at closing. (C) The Company's pro rata portion of the consideration is distributed to the Company or one of its Restricted Subsidiaries that is a Guarantor substantially simultaneously with such disposition. (D) The Company's pro rata portion of the cash consideration, net of fees and expenses related to the disposition, is immediately deposited into the Cash Collateral Account and held as Collateral pending application pursuant to Section 4.13(d)(ii) (provided that the assets (including Voting Stock) acquired with such cash are pledged as Collateral under the Security Documents substantially simultaneously with such acquisition, in accordance with the requirements set forth in Section 4.19(c)) or Section 4.13(e) and, in the case of Section 4.13(e), released to the Company or the relevant Guarantor if remaining after consummation of the Offer to Purchase. (ii) Section 4.20(d)(i) shall not apply to (1) sales of power in the ordinary course of business, (2) any sale of another owner's pro rata portion of the power under the Hawesville power contract (provided that (i) such owner is required to reimburse the Company and its Restricted Subsidiaries, under the owners' agreement or otherwise, for any increase in costs of the Company's or such Restricted Subsidiaries' production at the Hawesville facility resulting therefrom and (ii) the production capacity of the Company and its Restricted Subsidiaries at the Hawesville facility is not reduced as a result of such sale) and (3) the assignment of portions of the Hawesville power contract to each of the owners of the Hawesville facility, pro rata in accordance with their respective ownership interests in the facility (provided that each owner agrees, in the owners' agreement or otherwise, that (i) power for the facility will thereafter no longer be a shared cost, but will instead be provided by each owner and (ii) each owner will reimburse the other owners for any increase in costs or reduction in production capacity of the other owners as a result of any failure to provide power). 61 68 (iii) As used herein, "PRO RATA PORTION" shall mean the Company's portion, based upon its ownership percentage (including any ownership owned by any of its Restricted Subsidiaries) of Equity Interests of Century Aluminum of Kentucky LLC. (e) Consolidation or Merger. Century Aluminum of Kentucky LLC will not consolidated or merger with any other Person or permit any Person to merge with or into it, unless (i) Century Aluminum of Kentucky LLC is the surviving Person or (ii) the surviving Person expressly assumes, in a document delivered to the Trustee, all of the obligations of Century Aluminum of Kentucky LLC hereunder. ARTICLE 5 CONSOLIDATION, MERGER OR SALE OF ASSETS SECTION 5.01. Consolidation, Merger or Sale of Assets by the Company; No Lease of All or Substantially All Assets. (a) The Company will not (i) consolidate with or merge with or into any Person, or (ii) sell, convey, transfer, or otherwise dispose of all or substantially all of the assets of the Company and its consolidated Subsidiaries, as an entirety or substantially as an entirety, in one transaction or a series of related transactions, to any Person or (iii) permit any Person to merge with or into the Company unless (A) either (x) the Company is the continuing Person or (y) the resulting, surviving or transferee Person is a corporation organized and validly existing under the laws of the United States of America or any jurisdiction thereof and expressly assumes by supplemental indenture all of the obligations of the Company under the Indenture and the Notes and expressly assumes all of the obligations of the Company under the Security Documents; (B) immediately after giving effect to the transaction, no Default has occurred and is continuing; (C) immediately after giving effect to the transaction on a pro forma basis, the Company or the resulting, surviving or transferee Person has a Consolidated Net Worth (without taking into account any purchase accounting adjustments) equal to or greater than the Consolidated Net Worth of the Company immediately prior to the transaction; 62 69 (D) immediately after giving effect to the transaction on a pro forma basis, the Company or the resulting surviving or transferee Person could Incur at least $1.00 of Debt under Section 4.06(a); and (E) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that the consolidation, merger or transfer and the supplemental indenture (if any) comply with the Indenture; provided that clauses (B) through (D) do not apply (i) to the consolidation or merger of the Company with or into a Wholly Owned Restricted Subsidiary or the consolidation or merger of a Wholly Owed Restricted Subsidiary with or into the Company or (ii) if, in the good faith determination of the Board of Directors of the Company, whose determination is evidenced by a Board Resolution, the sole purpose of the transaction is to change the jurisdiction of incorporation of the Company. (b) The Company shall not lease all or substantially all of the assets of the Company and its consolidated Subsidiaries, whether in one transaction or a series of transactions, to one or more other Persons. (c) Upon the consummation of any transaction effected in accordance with these provisions, if the Company is not the continuing Person, the resulting, surviving or transferee Person will succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture and the Security Documents with the same effect as if such successor Person had been named as the Company in the Indenture and the Security Documents. Upon such substitution, unless the successor is one or more of the Company's Subsidiaries, the Company will be released from its obligations under the Indenture, the Notes and the Security Documents. SECTION 5.02. Consolidation, Merger or Sale of Assets by a Guarantor. (a) No Guarantor may (i) consolidate with or merge with or into any Person, or (ii) sell, convey, transfer or dispose of, all or substantially all its assets as an entirety or substantially as an entirety, in one transaction or a series of related transactions, to any Person, or (iii) permit any Person to merge with or into the Guarantor unless (A) the other Person is the Company or any Wholly Owned Restricted Subsidiary that is a Guarantor or becomes a Guarantor concurrently with the transaction; or 63 70 (B) (1) either (x) the Guarantor is the continuing Person or (y) the resulting, surviving or transferee Person expressly assumes by supplemental indenture all of the obligations of the Guarantor under its Note Guaranty and expressly assumes all of the obligations of the Guarantor under the Security Documents to which it is a party; and (2) immediately after giving effect to the transaction, no Default has occurred and is continuing; or (C) the transaction constitutes a sale or other disposition (including by way of consolidation or merger) of the Guarantor or the sale or disposition of all or substantially all the assets of the Guarantor (in each case other than to the Company or a Restricted Subsidiary) otherwise permitted by the Indenture. (b) In connection with, and as a condition to, any transaction subject to Section 5.02, the Company shall deliver to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that the consolidation, merger or transfer and the supplemental indenture (if any) comply with the Indenture. ARTICLE 6 DEFAULT AND REMEDIES SECTION 6.01. Events of Default. An "EVENT OF DEFAULT" occurs if (1) the Company defaults in the payment of the principal of any Note when the same becomes due and payable at maturity, upon acceleration or redemption, or otherwise; (2) the Company defaults in the payment of interest (including any Additional Interest) on any Note when the same becomes due and payable, and the default continues for a period of 30 days; (3) the Company fails to make an Offer to Purchase and thereafter accept and pay for Notes tendered when and as required pursuant to Section 4.12 or Section 4.13, or the Company or any Restricted Subsidiary fails to comply with Section 4.06 or Section 4.07 or the Company or any Guarantor fails to comply with Article 5 or Century Aluminum of Kentucky LLC defaults in the performance of or breaches any of the covenants in Section 4.20 applicable to it; (4) the Company or any Restricted Subsidiary defaults in the performance of or breaches any other covenant or agreement of the Company in the Indenture or under the Notes or in the Security Documents and the default or breach continues for a period of 60 consecutive days after written notice to the 64 71 Company by the Trustee or to the Company and the Trustee by the Holders of 25% or more in aggregate principal amount of the Notes; (5) there occurs with respect to any Debt of the Company or any of its Restricted Subsidiaries having an outstanding principal amount of $10.0 million or more in the aggregate for all such Debt of all such Persons (i) an event of default that has caused the holder thereof to declare such Debt to be due and payable prior to its scheduled maturity or (ii) failure to make a principal payment when due and such defaulted payment is not made, waived or extended within the applicable grace period; (6) one or more final judgments or orders for the payment of money are rendered against the Company or any of its Restricted Subsidiaries and are not paid or discharged, and there is a period of 60 consecutive days following entry of the final judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid or discharged against all such Persons to exceed $10.0 million (in excess of amounts which the Company's insurance carriers have agreed to pay under applicable policies) during which a stay of enforcement, by reason of a pending appeal or otherwise, is not in effect (a "JUDGMENT DEFAULT"); (7) an involuntary case or other proceeding is commenced against the Company or any Significant Restricted Subsidiary with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding remains undismissed and unstayed for a period of 60 days; or an order for relief is entered against the Company or any Significant Restricted Subsidiary under the federal bankruptcy laws as now or hereafter in effect; (8) the Company or any of its Significant Restricted Subsidiaries (i) commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (ii) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any of its Significant Restricted Subsidiaries or for all or substantially all of the property and assets of the Company or any of its Significant Restricted Subsidiaries or (iii) effects any general assignment for the benefit of creditors (an event of default specified in clause (7) or (8) a "BANKRUPTCY DEFAULT"); (9) any Note Guaranty ceases to be in full force and effect, other than in accordance the terms of the Indenture, or a Guarantor denies or disaffirms its obligations under its Note Guaranty; or 65 72 (10) with respect to any Collateral with an aggregate fair market value of $10.0 million or more, (A) the security interest under the Security Documents, at any time, ceases to be in full force and effect for any reason other than in accordance with their terms and the terms of the Indenture and other than the satisfaction in full of all obligations under the Indenture and discharge of the Indenture or (B) any security interest created under the Security Documents or under the Indenture is declared invalid or unenforceable or (C) the Company or any Guarantor asserts, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable. SECTION 6.02. Acceleration. (a) If an Event of Default, other than a bankruptcy default with respect to the Company, occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding, by written notice to the Company (and to the Trustee if the notice is given by the Holders), may, and the Trustee at the request of such Holders shall, declare the principal of and accrued interest on the Notes to be immediately due and payable. Upon a declaration of acceleration, such principal and interest will become immediately due and payable. If a bankruptcy default occurs with respect to the Company, the principal of and accrued interest on the Notes then outstanding will become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. If an Event of Default has occurred and is continuing, the Trustee may and, upon the written request of Holders of at least 25% in aggregate principal amount of the Outstanding Notes, the Trustee shall, direct the Collateral Agent to foreclose upon and take possession of all Collateral pursuant to, or take any other action to enforce, the provisions of the Security Documents. (b) The Holders of a majority in principal amount of the outstanding Notes by written notice to the Company and to the Trustee may waive all past defaults and rescind and annul a declaration of acceleration and its consequences if (1) all existing Events of Default, other than the nonpayment of the principal of, premium, if any, and interest on the Notes that have become due solely by the declaration of acceleration, have been cured or waived, and (2) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction. SECTION 6.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue, in its own name or as trustee of an express trust any available remedy by proceeding at law or in equity to collect the payment of principal of and interest on the Notes or to enforce the performance of any provision of the Notes or the Indenture, and any recovery of judgment shall be for the ratable benefit of the Holders of the Notes. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. 66 73 SECTION 6.04. Waiver of Past Defaults. Except as otherwise provided in Sections 6.02, 6.07 and 9.02, the Holders of a majority in principal amount of the outstanding Notes may, by notice to the Trustee, waive an existing Default and its consequences. Upon such waiver, the Default will cease to exist, and any Event of Default arising therefrom will be deemed to have been cured, but no such waiver will extend to any subsequent or other Default or impair any right consequent thereon. SECTION 6.05. Control by Majority. The Holders of a majority in aggregate principal amount of the outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or the Indenture, that may involve the Trustee in personal liability, or that the Trustee determines in good faith may be unduly prejudicial to the rights of Holders of Notes not joining in the giving of such direction, and may take any other action it deems proper that is not inconsistent with any such direction received from Holders of Notes. SECTION 6.06. Limitation on Suits. A Holder may not institute any proceeding, judicial or otherwise, with respect to the Indenture or the Notes, or for the appointment of a receiver or trustee, or for any other remedy under the Indenture or the Notes, unless: (1) the Holder has previously given to the Trustee written notice of a continuing Event of Default; (2) Holders of at least 25% in aggregate principal amount of outstanding Notes have made written request to the Trustee to institute proceedings in respect of the Event of Default in its own name as Trustee under the Indenture; (3) Holders have offered to the Trustee indemnity reasonably satisfactory to the Trustee against any costs, liabilities or expenses to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) during such 60-day period, the Holders of a majority in aggregate principal amount of the outstanding Notes have not given the Trustee a direction that is inconsistent with such written request. SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding anything to the contrary, the right of a Holder of a Note to receive payment of principal of or interest on its Note on or after the Stated Maturities thereof, or to bring suit for the enforcement of any such payment on or after such respective dates, may not be impaired or affected without the consent of that Holder. 67 74 SECTION 6.08. Collection Suit by Trustee. If an Event of Default in payment of principal or interest specified in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust for the whole amount of principal and accrued interest remaining unpaid, together with interest on overdue principal and, overdue installments of interest, in each case at the rate specified in the Notes, and such further amount as is sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee hereunder. SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee hereunder) and the Holders allowed in any judicial proceedings relating to the Company or any Guarantor or their respective creditors or property, and is entitled and empowered to collect, receive and distribute any money, securities or other property payable or deliverable upon conversion or exchange of the Notes or upon any such claims. Any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, if the Trustee consents to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agent and counsel, and any other amounts due the Trustee hereunder. Nothing in the Indenture will be deemed to empower the Trustee to authorize or consent to, or accept or adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. SECTION 6.10. Priorities. If the Trustee collects any money pursuant to this Article or receives any money from the Collateral Agent upon foreclosure and sale of any Collateral, it shall pay out the money in the following order: First: to the Trustee for all amounts due hereunder; Second: to Holders for amounts then due and unpaid for principal of and interest on the Notes, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest; and Third: to the Company or relevant Guarantor or as a court of competent jurisdiction may direct. The Trustee, upon written notice to the Company, may fix a record date and payment date for any payment to Holders pursuant to this Section. 68 75 SECTION 6.11. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted a proceeding to enforce any right or remedy under the Indenture and the proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to the Holder, then, subject to any determination in the proceeding, the Company, any Guarantors, the Trustee and the Holders will be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Company, any Guarantors, the Trustee and the Holders will continue as though no such proceeding had been instituted. SECTION 6.12. Undertaking for Costs. In any suit for the enforcement of any right or remedy under the Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court may require any party litigant in such suit (other than the Trustee) to file an undertaking to pay the costs of the suit in the manner and to the extent provided in the Trust Indenture Act, and the court may assess reasonable costs, including reasonable attorneys fees, against any party litigant (other than the Trustee) in the suit having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by a Holder to enforce payment of principal of or interest on any Note on the respective due dates, or a suit by Holders of more than 10% in principal amount of the outstanding Notes. SECTION 6.13. Rights and Remedies Cumulative. No right or remedy conferred or reserved to the Trustee or to the Holders under this Indenture is intended to be exclusive of any other right or remedy, and all such rights and remedies are, to the extent permitted by law, cumulative and in addition to every other right and remedy hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or exercise of any right or remedy hereunder, or otherwise, will not prevent the concurrent assertion or exercise of any other right or remedy. SECTION 6.14. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default will impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. SECTION 6.15. Waiver of Stay, Extension or Usury Laws. The Company and each Guarantor covenants, to the extent that it may lawfully do so, that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive the Company or the Guarantor from paying all or any portion of the principal of, or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the performance of the Indenture. The Company and each Guarantor hereby expressly waives, to the extent that it may lawfully do so, all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. 69 76 ARTICLE 7 THE TRUSTEE SECTION 7.01. General. (a) The duties and responsibilities of the Trustee are as provided by the Trust Indenture Act and as set forth herein. Whether or not expressly so provided, every provision of the Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee is subject to this Article. (b) Except during the continuance of an Event of Default, the Trustee need perform only those duties that are specifically set forth in the Indenture and no others, and no implied covenants or obligations will be read into the Indenture against the Trustee. In case an Event of Default has occurred and is continuing, the Trustee shall exercise those rights and powers vested in it by the Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of the Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct. SECTION 7.02. Certain Rights of Trustee. Subject to Trust Indenture Act Sections 315(a) through (d): (1) In the absence of bad faith on its part, the Trustee may rely, and will be protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in any such document, but, in the case of any document which is specifically required to be furnished to the Trustee pursuant to any provision hereof, the Trustee shall examine the document to determine whether it conforms to the requirements of the Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). The Trustee, in its discretion, may make further inquiry or investigation into such facts or matters as it sees fit. (2) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel conforming to Section 12.05 and the Trustee will not be liable for any action it takes or omits to take in good faith in reliance on the certificate or opinion. (3) The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care. 70 77 (4) The Trustee will be under no obligation to exercise any of the rights or powers vested in it by the Indenture at the request or direction of any of the Holders, unless such Holders have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. (5) The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers or for any action it takes or omits to take in accordance with the direction of the Holders in accordance with Section 6.05 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under the Indenture. (6) The Trustee may consult with counsel, and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (7) No provision of the Indenture will require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties hereunder, or in the exercise of its rights or powers, unless it receives indemnity satisfactory to it against any loss, liability or expense. (8) The Trustee shall not be charged with knowledge of any Default or Event of Default with respect to the Notes unless either (a) a trust officer of the Trustee shall have actual knowledge thereof or (b) a written notice of such Default or Event of Default shall have been given to the Trustee by the Company or any Holder of Notes. (9) The Trustee shall not have any responsibility or liability for or with respect to (a) the legality, validity or enforceability of any Lien on the Collateral (or the perfection or priority thereof), (b) the value of any Collateral, (c) any arrangement or agreement between the Collateral Agent and any Person with respect thereto or (d) the sufficiency of the Collateral following any Event of Default. (10) The permissive rights of the Trustee to take actions enumerated in this Indenture or any Security Document shall not be construed as a duty, and the Trustee shall not be answerable for other than its negligence or wilful misconduct with respect to such permissive rights. SECTION 7.03. Individual Rights of Trustee. The Trustee, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not the Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Trust Indenture Act Sections 310(b) and 311. For purposes of Trust Indenture Act Section 311(b)(4) and (6): 71 78 (a) "CASH TRANSACTION" means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; and (b) "SELF-LIQUIDATING PAPER" means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation. SECTION 7.04. Trustee's Disclaimer. The Trustee (i) makes no representation as to the validity or adequacy of the Indenture, the Notes or any Security Documents, (ii) is not accountable for the Company's use or application of the proceeds from the Notes, (iii) is not responsible for any statement in the Notes other than its certificate of authentication and (iv) is not responsible for the creation, priority or perfection of any security interest created or purported to be created by any Security Document. SECTION 7.05. Notice of Default. If any Default occurs and is continuing and is known to the Trustee, the Trustee will send notice of the Default to each Holder within 90 days after it occurs, unless the Default has been cured; provided that, except in the case of a default in the payment of the principal of or interest on any Note, the Trustee may withhold the notice if and so long as the board of directors, the executive committee or a trust committee of directors of the Trustee in good faith determines that withholding the notice is in the interest of the Holders. Notice to Holders under this Section will be given in the manner and to the extent provided in Trust Indenture Act Section 313(c). SECTION 7.06. Reports by Trustee to Holders. Within 60 days after each May 15, beginning with May 15, 2001, the Trustee will mail to each Holder, as provided in Trust Indenture Act Section 313(c), a brief report dated as of such May 15, if required by Trust Indenture Act Section 313(a). The Trustee will also mail to each Holder any report required by Trust Indenture Act Section 313(b). SECTION 7.07. Compensation and Indemnity. (a) The Company will pay the Trustee compensation as agreed upon in writing for its services. The compensation of the Trustee is not limited by any law on compensation of a Trustee of an express trust. The Company will reimburse the Trustee upon request for all reasonable and documented out-of-pocket expenses, disbursements and advances incurred or made by the Trustee, including the reasonable compensation and expenses of the Trustee's agents and counsel. 72 79 (b) The Company will indemnify the Trustee for, and hold it harmless against, any loss or liability or expense incurred by it without negligence or bad faith on its part arising out of or in connection with the acceptance or administration of the Indenture and its duties under the Indenture, the Security Documents and the Notes, including the reasonable costs and expenses of defending itself against any claim or liability and of complying with any process served upon it or any of its officers in connection with the exercise or performance of any of its powers or duties under the Indenture, the Security Documents and the Notes. The Trustee shall promptly notify the Company of any claim for which it may seek indemnity. The Company shall defend the claim, and the Trustee shall cooperate in the defense thereof. The Company shall have no obligation to pay for any settlement of any such claim without its consent, which consent shall not be unreasonably withheld. (c) To secure the Company's payment obligations in this Section, the Trustee will have a lien prior to the Notes on all money or property held or collected by the Trustee, in its capacity as Trustee, except money or property held in trust to pay principal of, and interest on particular Notes. SECTION 7.08. Replacement of Trustee. (a) (1) The Trustee may resign at any time by written notice to the Company. (2) The Holders of a majority in principal amount of the outstanding Notes may remove the Trustee by written notice to the Trustee. (3) If the Trustee is no longer eligible under Section 7.10 or in the circumstances described in Trust Indenture Act Section 310(b), any Holder that satisfies the requirements of Trust Indenture Act Section 310(b) may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (4) The Company may remove the Trustee if: (i) the Trustee is no longer eligible under Section 7.10; (ii) the Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver or other public officer takes charge of the Trustee or its property; or (iv) the Trustee becomes incapable of acting. A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. (b) If the Trustee has been removed by the Holders, Holders of a majority in principal amount of the Notes may appoint a successor Trustee with the consent of the Company. Otherwise, if the Trustee resigns or is removed, or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee. If the successor Trustee does not deliver its written acceptance within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in principal amount of the outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. 73 80 (c) Upon delivery by the successor Trustee of a written acceptance of its appointment to the retiring Trustee and to the Company, (i) the retiring Trustee will transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07, (ii) the resignation or removal of the retiring Trustee will become effective, and (iii) the successor Trustee will have all the rights, powers and duties of the Trustee under the Indenture. Upon request of any successor Trustee, the Company will execute any and all instruments for fully and vesting in and confirming to the successor Trustee all such rights, powers and trusts. The Company will give notice of any resignation and any removal of the Trustee and each appointment of a successor Trustee to all Holders, and include in the notice the name of the successor Trustee and the address of its Corporate Trust Office. (d) Notwithstanding replacement of the Trustee pursuant to this Section, the Company's obligations under Section 7.07 will continue for the benefit of the retiring Trustee. (e) The Trustee agrees to give the notices provided for in, and otherwise comply with, Trust Indenture Act Section 310(b). SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or national banking association, the resulting, surviving or transferee corporation or national banking association without any further act will be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee in the Indenture. SECTION 7.10. Eligibility. The Indenture must always have a Trustee that satisfies the requirements of Trust Indenture Act Section 310(a) and has a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition. SECTION 7.11. Money Held in Trust. The Trustee will not be liable for interest on any money received by it except as it may agree with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law and except for money held in trust under Article 8. SECTION 7.12. Collateral Agent. (a) The Trustee is hereby appointed to act as the Collateral Agent under the Security Documents, with such powers, rights and obligations as are expressly delegated to the Collateral Agent by the terms of this Indenture and by the Security Documents. The Trustee may, from time to time, appoint another financial institution to act as Collateral Agent so long as such institution meets the requirements of Section 7.10. The Collateral Agent, acting in its capacity as such, shall have only such duties with respect to the Collateral as are set forth in the Security Documents. 74 81 (b) Subject to the appointment and acceptance of a successor Collateral Agent as provided in this subsection, the Collateral Agent (if other than the Trustee) may resign at any time by notifying the Trustee and the Company. Upon any such resignation, the Trustee shall have the right to appoint a successor Collateral Agent. If no successor shall have been so appointed by the Trustee and shall have accepted such appointment within 30 days after the retiring Collateral Agent gives notice of its resignation, then the retiring Collateral Agent may, on behalf of the Holders and the Trustee, appoint a successor Collateral Agent which shall meet the eligibility requirements of Section 7.10 and shall accept and comply in all material respects with the Pledge and Security Agreement, including without limitation the maintenance of an office and the Cash Collateral Account in the State of New York. Upon a successor's acceptance of its appointment as Collateral Agent hereunder, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent hereunder and under the Security Documents, and the retiring Collateral Agent shall be discharged from its duties and obligations hereunder and under the Security Documents. After the Collateral Agent's resignation hereunder, the provisions of this Section, Section 4.02 of each Mortgage and Sections 12 and 14 of the Pledge and Security Agreement shall continue in effect for the benefit of such retiring Collateral Agent and its sub-agents in respect of any actions taken or omitted to be taken by any of them while the retiring Collateral Agent was acting as Collateral Agent. If the Trustee shall be acting at any time as the Collateral Agent, then it will be deemed to have resigned as Collateral Agent upon its replacement as Trustee pursuant to Section 7.07, and the successor Trustee shall select (or may act as) the replacement Collateral Agent. ARTICLE 8 DEFEASANCE AND DISCHARGE SECTION 8.01. Discharge of Company's Obligations. (a) Subject to paragraph (b), the Company's obligations under the Notes and the Indenture, and each Guarantor's obligations under its Note Guaranty, will terminate if: (1) all Notes previously authenticated and delivered (other than (i) destroyed, lost or stolen Notes that have been replaced or (ii) Notes that are paid pursuant to Section 4.01 or (iii) Notes for whose payment money or U.S. Government Obligations have been held in trust and then repaid to the Company pursuant to Section 8.05) have been delivered to the Trustee for cancellation and the Company has paid all sums payable by it hereunder; or (2) (A) the Notes mature within one year, or all of them are to be called for redemption within one year under arrangements satisfactory to the Trustee for giving the notice of redemption, (B) the Company irrevocably deposits in trust with the Trustee, as trust funds solely for the benefit of the Holders, money or U.S. Government Obligations or a combination thereof sufficient, in the 75 82 opinion of a nationally recognized firm of independent public accountants expressed in a written certificate delivered to the Trustee, without consideration of any reinvestment, to pay principal of and interest on the Notes to maturity or redemption, as the case may be, and to pay all other sums payable by it hereunder, (C) no Default has occurred and is continuing on the date of the deposit, (D) the deposit will not result in a breach or violation of, or constitute a default under, the Indenture or any other agreement or instrument to which the Company is a party or by which it is bound, and (E) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the satisfaction and discharge of the Indenture have been complied with. (b) After satisfying the conditions in clause (1), only the Company's obligations under Section 7.07 will survive. After satisfying the conditions in clause (2), only the Company's obligations in Article 2 and Sections 4.01, 4.02, 7.07, 7.08, 8.05 and 8.06 will survive. In either case, the Trustee upon request will acknowledge in writing the discharge of the Company's obligations under the Notes and the Indenture other than the surviving obligations. SECTION 8.02. Legal Defeasance. After the 123rd day following the deposit referred to in clause (1) below, the Company will be deemed to have paid and will be discharged from its obligations in respect of the Notes and the Indenture (other than its obligations in Article 2 and Sections 4.01, 4.02, 7.07, 7.08, 8.05 and 8.06) and the Security Documents and each Guarantor's obligations under its Note Guaranty and the Security Documents will terminate; provided the following conditions have been satisfied: (1) The Company has irrevocably deposited in trust with the Trustee, as trust funds solely for the benefit of the Holders, money or U.S. Government Obligations or a combination thereof sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certificate thereof delivered to the Trustee, without consideration of any reinvestment, to pay principal of and interest on the Notes to maturity or redemption, as the case may be, provided that any redemption before maturity has been irrevocably provided for under arrangements satisfactory to the Trustee. (2) No Default has occurred and is continuing on the date of the deposit or occurs at any time during the 123-day period following the deposit. 76 83 (3) The deposit will not result in a breach or violation of, or constitute a default under, the Indenture or any other agreement or instrument to which the Company is a party or by which it is bound. (4) The Company has delivered to the Trustee (A) either (x) a ruling received from the Internal Revenue Service to the effect that the Holders will not recognize income, gain or loss for federal income tax purposes as a result of the defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would otherwise have been the case or (y) an Opinion of Counsel, based on a change in law after the date of the Indenture, to the same effect as the ruling described in clause (x), and (B) an Opinion of Counsel to the effect that (i) the creation of the defeasance trust does not violate the Investment Company Act of 1940, (ii) the Holders have a valid first priority Note interest in the trust funds (subject to customary exceptions), and (iii) after the passage of 123 days following the deposit, the trust funds will not be subject to the effect of Section 547 of the United States Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law. (5) If the Notes are listed on a national securities exchange, the Company has delivered to the Trustee an Opinion of Counsel to the effect that the deposit and defeasance will not cause the Notes to be delisted. (6) The Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the defeasance have been complied with. Prior to the end of the 123-day period, none of the Company's obligations under the Indenture will be discharged. Thereafter, the Trustee upon request will acknowledge in writing the discharge of the Company's obligations under the Notes and the Indenture except for the surviving obligations specified above. SECTION 8.03. Covenant Defeasance. After the 123rd day following the deposit referred to in clause (1), the Company's obligations set forth in Sections 4.06 through 4.17, and clauses (C) and (D) of Section 5.01(a) and its obligations under the Security Documents, and each Guarantor's obligations under its Note Guaranty and the Security Documents will terminate, and clauses (3), (4), (5), (6) and (9) of Section 6.01 will no longer constitute Events of Default; provided the following conditions have been satisfied: (1) The Company has complied with clauses (1), (2), (3), 4(B), (5) and (6) of Section 8.02; and 77 84 (2) the Company has delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for federal income tax purposes as a result of the defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would otherwise have been the case. Upon satisfaction of the conditions described above, the Company may omit to comply with the covenants and clauses described above and shall have no liability in respect thereof, including by reason of any reference to such covenants or clauses elsewhere in the Indenture or the Security Documents. Except as specifically stated above, none of the Company's obligations under the Indenture will be discharged. SECTION 8.04. Application of Trust Money. Subject to Section 8.05, the Trustee will hold in trust the money or U.S. Government Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03, and apply the deposited money and the proceeds from deposited U.S. Government Obligations to the payment of principal of and interest on the Notes in accordance with the Notes and the Indenture. Such money and U.S. Government Obligations need not be segregated from other funds except to the extent required by law. SECTION 8.05. Repayment to Company. Subject to Sections 7.07, 8.01, 8.02 and 8.03, the Trustee will promptly pay to the Company upon request any excess money held by the Trustee at any time and thereupon be relieved from all liability with respect to such money. The Trustee will pay to the Company upon request any money held for payment with respect to the Notes that remains unclaimed for two years, provided that before making such payment the Trustee may at the expense of the Company publish once in a newspaper of general circulation in New York City, or send to each Holder entitled to such money, notice that the money remains unclaimed and that after a date specified in the notice (at least 30 days after the date of the publication or notice) any remaining unclaimed balance of money will be repaid to the Company. After payment to the Company, Holders entitled to such money must look solely to the Company for payment, unless applicable law designates another Person, and all liability of the Trustee with respect to such money will cease. SECTION 8.06. Reinstatement. If and for so long as the Trustee is unable to apply any money or U.S. Government Obligations held in trust pursuant to Section 8.01, 8.02 or 8.03 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under the Indenture and the Notes and the Guarantors' obligations under the Indenture and the Note Guaranties will be reinstated as though no such deposit in trust had been made. If the Company makes any payment of principal of or interest on any Notes because of the reinstatement of its obligations, it will be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held in trust. 78 85 ARTICLE 9 AMENDMENTS, SUPPLEMENTS AND WAIVERS SECTION 9.01. Amendments Without Consent of Holders. (a) The Company and the Trustee (and, in the case of the Security Documents, the Collateral Agent) may amend or supplement the Indenture, the Notes and/or the Security Documents without notice to or the consent of any Noteholder (1) to cure any ambiguity, defect or inconsistency in the Indenture, the Notes or any Security Document; (2) to comply with Article 5; (3) to comply with any requirements of the Commission in connection with the qualification of the Indenture under the Trust Indenture Act; (4) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee; (5) to provide for uncertificated Notes in addition to or in place of certificated Notes, provided that the uncertified Notes are issued in registered form for purposes of Section 163(f) of the Internal Revenue Code of 1986, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Internal Revenue Code of 1986; or (6) to provide for any Guarantee of the Notes, to provide additional security for the Notes or to confirm and evidence the release, termination or discharge of any Guarantee of or Lien securing the Notes when such release, termination or discharge is permitted by the Indenture; SECTION 9.02. Amendments With Consent of Holders. (a) Except as otherwise provided in Sections 6.02, 6.04 and 6.07 or paragraph (b), the Company and the Trustee (and, in the case of any Security Documents, the Collateral Agent) may amend the Indenture, the Notes and/or the Security Documents with the written consent of the Holders of a majority in principal amount of the then outstanding Notes, and the Holders of a majority in principal amount of the then outstanding Notes by written notice to the Trustee may waive future compliance by the Company with any provision of the Indenture, the Notes or any Security Document. (b) Notwithstanding the provisions of paragraph (a), without the consent of each Holder affected, an amendment or waiver may not (1) reduce the principal amount of or change the Stated Maturity of any installment of principal of any Note, (2) reduce the rate of or change the Stated Maturity of any interest payment on any Note, 79 86 (3) reduce the amount payable upon the redemption of any Note or change the time of any mandatory redemption or, in respect of an optional redemption, the times at which any Note may be redeemed or, once notice of redemption has been given, the time at which it must thereupon be redeemed, (4) after the time an Offer to Purchase is required to have been made, reduce the purchase amount or purchase price, or extend the latest expiration date or purchase date thereunder, (5) make any Note payable in money other than that stated in the Note, (6) impair the right of any Holder of Notes to receive any principal payment or interest payment on such Holder's Notes, on or after the Stated Maturity thereof, or to institute suit for the enforcement of any such payment, (7) make any change in the percentage of the principal amount of the Notes required for amendments or waivers, (8) modify or change any provision of the Indenture affecting the ranking of the Notes or any Note Guaranty in a manner adverse to the Holders of the Notes, or (9) except as provided in Article 10, make any change in any Note Guaranty that would adversely affect the Noteholders, or effect a release of all or substantially all the Collateral provided that the provisions of Section 4.12 and Section 4.13 may, except as provided above, be amended or waived with the consent of Holders holding not less than 66-2/3% in aggregate principal amount of the Notes. (c) It is not necessary for Noteholders to approve the particular form of any proposed amendment, supplement or waiver, but is sufficient if their consent approves the substance thereof. (d) An amendment, supplement or waiver under this Section will become effective on receipt by the Trustee of written consents from the Holders of the requisite percentage in principal amount of the outstanding Notes. After an amendment, supplement or waiver under this Section becomes effective, the Company will send to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. The Company will send supplemental indentures to Holders upon request. Any failure of the Company to send such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such supplemental indenture or waiver. SECTION 9.03. Effect of Consent. (a) After an amendment, supplement or waiver becomes effective, it will bind every Holder unless it is of the type requiring the 80 87 consent of each Holder affected. If the amendment, supplement or waiver is of the type requiring the consent of each Holder affected, the amendment, supplement or waiver will bind each Holder that has consented to it and every subsequent Holder of a Note that evidences the same debt as the Note of the consenting Holder. (b) If an amendment, supplement or waiver changes the terms of a Note, the Trustee may require the Holder to deliver it to the Trustee so that the Trustee may place an appropriate notation of the changed terms on the Note and return it to the Holder, or exchange it for a new Note that reflects the changed terms. The Trustee may also place an appropriate notation on any Note thereafter authenticated. However, the effectiveness of the amendment, supplement or waiver is not affected by any failure to annotate or exchange Notes in this fashion. SECTION 9.04. Trustee's Rights and Obligations. The Trustee is entitled to receive, and will be fully protected in relying upon, in addition to the documents required by Section 12.04, an Opinion of Counsel stating that the execution of any amendment, supplement or waiver authorized pursuant to this Article is authorized or permitted by the Indenture. If the Trustee has received such an Opinion of Counsel, it shall sign the amendment, supplement or waiver so long as the same does not adversely affect the rights of the Trustee. The Trustee may, but is not obligated to, execute any amendment, supplement or waiver that affects the Trustee's own rights, duties or immunities under the Indenture or any Security Document. SECTION 9.05. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act. SECTION 9.06. Payments for Consents. Neither the Company nor any of its Subsidiaries or Affiliates may, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture, the Notes or any Security Documents unless such consideration is offered to be paid or agreed to be paid to all Holders of the Notes that consent, waive or agree to amend such term or provision within the time period set forth in the solicitation documents relating to the consent, waiver or amendment. ARTICLE 10 GUARANTIES SECTION 10.01. The Guaranties. Subject to the provisions of this Article, each Guarantor hereby irrevocably and unconditionally guarantees, jointly and severally, the full and punctual payment (whether at Stated Maturity, upon redemption, purchase pursuant to an Offer to Purchase or acceleration, or otherwise) of the principal of, premium, if any, and interest on, and all other amounts payable under, each Note, and the full and punctual payment of all other amounts payable by the Company under the 81 88 Indenture and each Security Document. Upon failure by the Company to pay punctually any such amount, each Guarantor shall forthwith on demand pay the amount not so paid at the place and in the manner specified in the Indenture and the Security Documents. SECTION 10.02. Guaranty Unconditional. The obligations of each Guarantor hereunder are unconditional and absolute and, without limiting the generality of the foregoing, will not be released, discharged or otherwise affected by (1) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Company under the Indenture, any Security Document or any Note, by operation of law or otherwise; (2) any modification or amendment of or supplement to the Indenture, any Security Document or any Note; (3) any change in the corporate existence, structure or ownership of the Company, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company or its assets or any resulting release or discharge of any obligation of the Company contained in the Indenture, any Security Document or any Note; (4) the existence of any claim, set-off or other rights which the Guarantor may have at any time against the Company, the Trustee or any other Person, whether in connection with the Indenture or any unrelated transactions, provided that nothing herein prevents the assertion of any such claim by separate suit or compulsory counterclaim; (5) any invalidity or unenforceability relating to or against the Company for any reason of the Indenture, any Security Document or any Note, or any provision of applicable law or regulation purporting to prohibit the payment by the Company of the principal of or interest on any Note or any other amount payable by the Company under the Indenture or any Security Document; or (6) any other act or omission to act or delay of any kind by the Company, the Trustee or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to such Guarantor's obligations hereunder. SECTION 10.03. Discharge; Reinstatement. Each Guarantor's obligations hereunder will remain in full force and effect until the principal of, premium, if any, and interest on the Notes and all other amounts payable by the Company under the Indenture and the Security Documents have been paid in full. If at any time any payment of the principal of, premium, if any, or interest on any Note or any other amount payable by the Company under the Indenture or any Security Document is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Company or otherwise, each Guarantor's obligations hereunder with respect to such 82 89 payment will be reinstated as though such payment had been due but not made at such time. SECTION 10.04. Waiver by the Guarantors. Each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Company or any other Person. SECTION 10.05. Subrogation and Contribution. Upon making any payment with respect to any obligation of the Company under this Article, the Guarantor making such payment will be subrogated to the rights of the payee against the Company with respect to such obligation, provided that the Guarantor may not enforce either any right of subrogation, or any right to receive payment in the nature of contribution, or otherwise, from any other Guarantor, with respect to such payment so long as any amount payable by the Company hereunder, under the Security Documents or under the Notes remains unpaid. SECTION 10.06. Stay of Acceleration. If acceleration of the time for payment of any amount payable by the Company under the Indenture, the Security Documents or the Notes is stayed upon the insolvency, bankruptcy or reorganization of the Company, all such amounts otherwise subject to acceleration under the terms of the Indenture are nonetheless payable by the Guarantors hereunder forthwith on demand by the Trustee or the Holders. SECTION 10.07. Limitation on Amount of Guaranty. Notwithstanding anything to the contrary in this Article, each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guaranty of such Guarantor not constitute a fraudulent conveyance under applicable fraudulent conveyance provisions of the United States Bankruptcy Code or any comparable provision of state law. To effectuate that intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each Guarantor under its Note Guaranty are limited to the maximum amount that would not render the Guarantor's obligations subject to avoidance under applicable fraudulent conveyance provisions of the United States Bankruptcy Code or any comparable provision of state law. SECTION 10.08. Execution and Delivery of Guaranty. The execution by each Guarantor of the Indenture (or a supplemental indenture substantially in the form of Exhibit B) evidences the Note Guaranty of such Guarantor, whether or not the person signing as an officer of the Guarantor still holds that office at the time of authentication of any Note. The delivery of any Note by the Trustee after authentication constitutes due delivery of the Note Guaranty set forth in the Indenture on behalf of each Guarantor. SECTION 10.09. Release of Guaranty. The Note Guaranty of a Guarantor will terminate upon 83 90 (1) a sale or other disposition (including by way of consolidation or merger) of the Guarantor or the sale or disposition of all or substantially all the assets of the Guarantor (in each case other than to the Company or a Restricted Subsidiary) otherwise permitted by the Indenture, (2) the designation in accordance with the Indenture of the Guarantor as an Unrestricted Subsidiary, or (3) defeasance or discharge of the Notes, as provided in Article 8. Upon delivery by the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to the foregoing effect, the Trustee will execute any documents reasonably required in order to evidence the release of the Guarantor from its obligations under its Note Guaranty. ARTICLE 11 SECURITY ARRANGEMENTS SECTION 11.01. Security. (a) In order to secure the Obligations under the Indenture and the Notes, the Company will, and will cause each of its Restricted Subsidiaries named in any Security Document as a party thereto, to execute and deliver to the Collateral Agent on or prior to the Issue Date each Security Document to which it is a party and create the Liens intended to be created thereunder on the Collateral. (b) The Company and its Restricted Subsidiaries shall comply with all covenants and agreements contained in the Security Documents. (c) Each Holder, by accepting a Note, agrees to all of the terms and provisions of the Security Documents, as the same may be amended from time to time pursuant to the provisions of the Security Documents and this Indenture. (d) As among the Holders, the Collateral as now or hereafter constituted shall be held for the equal and ratable benefit of the Holders without preference, priority or distinction of any thereof over any other by reason of difference in time of issuance, sale or otherwise, as security for the Obligations under the Indenture and the Notes. SECTION 11.02. Disposition of Collateral. (a) The Company and its Restricted Subsidiaries may sell, transfer or otherwise dispose of any Collateral to any Person, and the Trustee and the Collateral Agent shall release the same from the Lien of the Indenture and the Security Documents upon consummation of the disposition and upon receipt by the Trustee and the Collateral Agent of: (i) an Officers' Certificate (which may, but need not be, in the form of Exhibit J hereto) requesting such release and stating that: 84 91 (A) the proposed disposition is in compliance with Section 4.13(a) and Section 4.13(b) or is exempt therefrom, and setting forth the exemption in reasonable detail; and (B) except as stated below, the proposed disposition is, in the Board of Directors' good faith judgment, desirable in the proper conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole; (ii) an engineer's or appraiser's certificate stating in substance: (A) a description in reasonable detail of the property to be released; (B) a description in reasonable detail of the consideration for the property to be released; (C) except as set forth in Section 11.03(e), the then fair value, in the opinion of the signer, of the property to be released, which fair value shall not be more than the amount of the consideration received or to be received by the Company or the applicable Restricted Subsidiary from the disposition of the property to be released; and (D) that such release, in the opinion of the signer, will not impair the security under the Indenture in contravention of the provisions of the Indenture; and (iii) if the fair value of such property and all other Collateral being disposed of in any related transactions exceeds $2.5 million, the cash proceeds of such disposition, which shall be deposited in the Cash Collateral Account pursuant to Section 11.03. If the fair value of such property and of all other Collateral released from the Lien of the Indenture and the Security Documents since the commencement of the then current calendar year is 10% or more of the aggregate principal amount of the Notes at the time outstanding, the engineering or appraisal certificate shall be made by an independent engineer, appraiser or other expert; provided that the certificate may be made by an engineer, appraiser or other expert that is not independent if the fair value of the property to be released, as stated in the required certificate, is less than the greater of (x) $25,000 or (y) 1% of the aggregate principal amount of Notes at the time outstanding. (b) If any Collateral is being released in connection with an exchange for property that will be subjected to the Lien of the Indenture and the Security Documents, the engineer's or appraiser's certificate shall also state in substance: 85 92 (i) a description in reasonable detail of the property to be subjected to the Lien; and (ii) the then fair value, in the opinion of the signer, of the property to be subjected to the Lien, which fair value shall not be less than the then fair value of the property to be released. If within six months prior to the date of acquisition by the Company or any Restricted Subsidiary, the property being subjected to a Lien has been used or operated by another Person or Persons in a business similar to that of the Company and its Restricted Subsidiaries, the engineering or appraisal certificate shall be made by an independent engineer, appraiser or other expert; provided that the certificate may be made by an engineer, appraiser or other expert that is not independent if the fair value of the property to be subjected to a Lien, as stated in the required certificate, is less than the greater of (x) $25,000 or (y) 1% of the aggregate principal amount of Notes at the time outstanding. (c) Notwithstanding the foregoing, the Lien of the Indenture and the Security Documents will not be released if any sale, transfer or other disposition of Collateral is made as part of a transaction that is governed by Section 5.01. (d) To the extent applicable and not otherwise provided herein, the Company and each obligor on the Notes shall comply with Trust Indenture Act Section 314(d) relating to the release of property or securities from the Liens of the Indenture and the Security Documents. (e) The release of any Collateral in accordance with the provisions of the Indenture and the Security Documents will not be deemed to impair the security interest with respect to the Collateral in contravention of the provisions of this Indenture. Any engineer or appraiser may rely on this clause (e) in delivering a certificate requesting release pursuant to Section 11.02(a) or 11.02(b) so long as all other provisions of the Indenture and the Security Documents with respect to such release have been complied with. (f) Notwithstanding the foregoing, the Officers' Certificate need not include the statement referred to in Section 11.02(a)(i)(B) above if (i) the disposition is in the ordinary course of business, (ii) the assets being disposed of are obsolete or worn out equipment and (iii) the assets disposed of in such transaction and any related transactions have an aggregate fair market value (as stated in the accompanying engineer's or appraiser's certificate) of not more than $200,000. In lieu of such statement, the Officers' Certificate shall certify compliance with this clause (f). SECTION 11.03. Cash Collateral Account. (a) The Company and the Guarantors shall deposit in the Cash Collateral Account the Net Cash Proceeds from any sale, lease, transfer or other disposition (or series of related sales, leases, transfers or other dispositions) of Restricted Assets having an aggregate fair market value of more than $2.5 million. 86 93 (b) All Casualty Proceeds received by the Collateral Agent, the Company or any Subsidiary shall be applied as follows: (i) if the amount of such Casualty Proceeds is less than $2,500,000, such Casualty Proceeds shall be retained by the Company or the relevant Subsidiary, as the case may be, and used to restore, repair, replace (including with an asset of like kind) or rebuild the asset in respect of which such Casualty Proceeds were received (to the extent required by the applicable Security Document) or otherwise such Proceeds may be used in accordance with Section 4.13(d) (provided that any assets (including Voting Stock) acquired are pledged as Collateral) or Section 4.13(e); and (ii) if the amount of such Casualty Proceeds is equal to or greater than $2,500,000, such Casualty Proceeds shall be deposited and held in the Cash Collateral Account and be released from that account as provided in Section 11.03(c) below. (c) Amounts held in the Cash Collateral Account may only be released to the Company or the applicable Guarantor for use as permitted by Section 4.13(d)(provided that any assets (including Voting Stock) acquired are pledged as Collateral) or Section 4.13(e) and, in the case of Section 4.13(e), will be released to the Company or the applicable Guarantor if remaining after the consummation of the Offer to Purchase. (d) Notwithstanding the foregoing, the Company will not be required to deposit any Casualty Proceeds to the extent that it furnishes the Collateral Agent and the Trustee with an Officers' Certificate certifying that it has invested an amount in compliance with Section 4.13(d) (and any assets (including Voting Stock) acquired are pledged as Collateral) or Section 4.13(e) equal to, or in excess of, the amount of such proceeds in anticipation of receipt of such funds. (e) The Guarantors will be required to comply with the requirements of Section 11.02 (other than Section 11.02(a)(ii)(C) in the case of any release of funds to be applied pursuant to Section 4.13(e) or released thereafter to the Company or the applicable Guarantor) before any Collateral held in the Cash Collateral Account may be released from the Lien of the Pledge and Security Agreement. SECTION 11.04. Suits to Protect the Collateral. Subject to the provisions of the Security Documents, the Trustee shall have power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts which may be unlawful or in violation of any of the Security Documents or this Indenture, including suits and proceedings against the Collateral Agent and such suits and proceedings as the Trustee may deem expedient to preserve or protect its interests and the interests of the Holders in the Collateral. SECTION 11.05. Determinations Relating to Collateral. In the event (i) the Trustee shall receive any written request from the Company, a Guarantor or the Collateral Agent under any Security Document for consent or approval with respect to 87 94 any matter or thing relating to any Collateral or the Company's or such Guarantor's obligations with respect thereto, (ii) there shall be due to or from the Trustee or the Collateral Agent under the provisions of any Security Document any material performance or the delivery of any material instrument or (iii) the Trustee shall become aware of any nonperformance by the Company or a Guarantor of any covenant or any breach of any representation or warranty of the Company or such Guarantor set forth in any Security Document, then, in each such event, the Trustee shall be entitled to hire experts, consultants, agents and attorneys to advise the Trustee on the manner in which the Trustee should respond, or direct the Collateral Agent to respond, to such request or render any requested performance or respond, or direct the Collateral Agent to respond, to such nonperformance or breach; provided that the Trustee's right to direct the Collateral Agent to respond shall be subject to the terms of the Security Documents. The Trustee shall be fully protected in the taking of any action recommended or approved by any such expert, consultant, agent or attorney or agreed to by the Holders of a majority in principal amount of the outstanding Notes. SECTION 11.06. Release upon Termination of the Company's Obligations. In the event that (i) all of the Obligations under the Indenture, the Notes and the Security Documents have been paid, (ii) the Notes have been discharged pursuant to Section 8.01, (iii) the Notes have been legally defeased pursuant to Section 8.02 or (iv) the covenants of the Notes have been defeased pursuant to Section 8.03, and the Company delivers an Officers' Certificate to that effect to the Trustee, then the Liens of the Security Documents on the Collateral shall be automatically released and the Collateral Agent shall execute all such instruments as shall be requested by the Company to release all the Collateral as to which a security interest has been granted pursuant to this Indenture and the Security Documents (other than any Collateral pledged as part of the trust required to defease or discharge the Notes). The Trustee and the Collateral Agent shall, at the direction and expense of the Company, take all necessary measures to effectuate such release, including, but not limited to, executing UCC-3 termination statements to be filed by the Company in the appropriate jurisdiction. ARTICLE 12 MISCELLANEOUS SECTION 12.01. Trust Indenture Act of 1939. The Indenture shall incorporate and be governed by the provisions of the Trust Indenture Act that are required to be part of and to govern indentures qualified under the Trust Indenture Act. SECTION 12.02. Noteholder Communications; Noteholder Actions. (a) The rights of Holders to communicate with other Holders with respect to the Indenture or the Notes are as provided by the Trust Indenture Act, and the Company and the Trustee shall comply with the requirements of Trust Indenture Act Section 312(a). Neither the Company nor the Trustee will be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act. 88 95 (b)(i) Any request, demand, authorization, direction, notice, consent to amendment, supplement or waiver or other action provided by this Indenture to be given or taken by a Holder (an "ACT") may be evidenced by an instrument signed by the Holder delivered to the Trustee. The fact and date of the execution of the instrument, or the authority of the person executing it, may be proved in any manner that the Trustee deems sufficient. (ii) The Trustee may make reasonable rules for action by or at a meeting of Holders, which will be binding on all the Holders. (c) Any act by the Holder of any Note binds that Holder and every subsequent Holder of a Note that evidences the same debt as the Note of the acting Holder, even if no notation thereof appears on the Note. Subject to paragraph (d), a Holder may revoke an act as to its Notes, but only if the Trustee receives the notice of revocation before the date the amendment or waiver or other consequence of the act becomes effective. (d) The Company may, but is not obligated to, fix a record date (which need not be within the time limits otherwise prescribed by Trust Indenture Act Section 316(c)) for the purpose of determining the Holders entitled to act with respect to any amendment or waiver or in any other regard, except that during the continuance of an Event of Default, only the Trustee may set a record date as to notices of default, any declaration or acceleration or any other remedies or other consequences of the Event of Default. If a record date is fixed, those Persons that were Holders at such record date and only those Persons will be entitled to act, or to revoke any previous act, whether or not those Persons continue to be Holders after the record date. No act will be valid or effective for more than 90 days after the record date. SECTION 12.03. Notices. (a) Any notice or communication to the Company will be deemed given if in writing (i) when delivered in person or (ii) five days after mailing when mailed by first class mail, or (iii) when sent by facsimile transmission, with transmission confirmed. Notices or communications to a Guarantor will be deemed given if given to the Company. Any notice to the Trustee will be effective only upon receipt. In each case the notice or communication should be addressed as follows: if to the Company: Century Aluminum Company 2511 Garden Road, Building A, Suite 200, Monterey, CA 93940 Facsimile: (831) 642-9080 Attn: Chief Financial Officer if to the Trustee: Wilmington Trust Company Rodney Square North 1100 North Market Street 89 96 Wilmington, DE 19890 Facsimile: (302) 651-8584 Attn: Corporate Trust Division The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. (b) Except as otherwise expressly provided with respect to published notices, any notice or communication to a Holder will be deemed given when mailed to the Holder at its address as it appears on the Register by first class mail or, as to any Global Note registered in the name of DTC or its nominee, as agreed by the Company, the Trustee and DTC. Copies of any notice or communication to a Holder, if given by the Company, will be mailed to the Trustee at the same time. Defect in mailing a notice or communication to any particular Holder will not affect its sufficiency with respect to other Holders. (c) Where the Indenture provides for notice, the notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and the waiver will be the equivalent of the notice. Waivers of notice by Holders must be filed with the Trustee, but such filing is not a condition precedent to the validity of any action taken in reliance upon such waivers. SECTION 12.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under the Indenture or any Security Document, the Company will furnish to the Trustee: (1) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in the Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel stating that all such conditions precedent have been complied with. SECTION 12.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in the Indenture must include: (1) a statement that each person signing the certificate or opinion has read the covenant or condition and the related definitions; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in the certificate or opinion is based; (3) a statement that, in the opinion of each such person, that person has made such examination or investigation as is necessary to enable the person 90 97 to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of each such person, such condition or covenant has been complied with, provided that an Opinion of Counsel may rely on an Officers' Certificate or certificates of public officials with respect to matters of fact. SECTION 12.06. Payment Date Other Than a Business Day. If any payment with respect to a payment of any principal of, premium, if any, or interest on any Note (including any payment to be made on any date fixed for redemption or purchase of any Note) is due on a day which is not a Business Day, then the payment need not be made on such date, but may be made on the next Business Day with the same force and effect as if made on such date, and no interest will accrue with respect to such payment for the intervening period. SECTION 12.07. Governing Law. The Indenture, including any Note Guaranties, and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York. SECTION 12.08. No Adverse Interpretation of Other Agreements. The Indenture may not be used to interpret another indenture or loan or debt agreement of the Company or any Subsidiary of the Company, and no such indenture or loan or debt agreement may be used to interpret the Indenture. SECTION 12.09. Successors. All agreements of the Company or any Guarantor in the Indenture and the Notes will bind its successors. All agreements of the Trustee in the Indenture will bind its successor. SECTION 12.10. Duplicate Originals. The parties may sign any number of copies of the Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. SECTION 12.11. Separability. In case any provision in the Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby. SECTION 12.12. Table of Contents and Headings. The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of the Indenture have been inserted for convenience of reference only, are not to be considered a part of the Indenture and in no way modify or restrict any of the terms and provisions of the Indenture. SECTION 12.13. No Liability of Directors, Officers, Employees, Incorporators and Stockholders. No director, officer, employee, incorporator, member or stockholder of the Company or any Guarantor, as such, will have any liability for any obligations of the Company or such Guarantor under the Notes, any Note Guaranty, any Security 91 98 Document or the Indenture or for any claim based on, in respect of, or by reason of, such obligations. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. 92 99 SIGNATURES IN WITNESS WHEREOF, the parties hereto have caused the Indenture to be duly executed as of the date first written above. CENTURY ALUMINUM COMPANY, as Issuer By: ---------------------------------------------- Name: Title: WILMINGTON TRUST COMPANY, as Trustee By: ---------------------------------------------- Name: Title: CENTURY OF WEST VIRGINIA, INC., as a Guarantor By: ---------------------------------------------- Name: Title: BERKELEY ALUMINUM, INC., as a Guarantor By: ---------------------------------------------- Name: Title: 93 100 VIRGIN ISLANDS ALUMINA CORPORATION LLC, as a Guarantor By: ---------------------------------------------- Name: Title: CENTURY KENTUCKY, INC., as a Guarantor By: ---------------------------------------------- Name: Title: METALSCO LTD., as a Guarantor By: ---------------------------------------------- Name: Title: SKYLINER, INC., as a Guarantor By: ---------------------------------------------- Name: Title: NSA, LTD., as a Guarantor By: ---------------------------------------------- Name: Title: 94 101 EXHIBIT A [FACE OF NOTE] CENTURY ALUMINUM COMPANY 11 3/4% Senior Secured First Mortgage Note Due 2008 [CUSIP] [CINS] _______________ No. $_______________ Century Aluminum Company, a Delaware corporation (the "COMPANY", which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to ____________________, or its registered assigns, the principal sum of ____________ DOLLARS ($______) [or such other amount as indicated on the Schedule of Exchange of Notes attached hereto]1 on April 15, 2008. [Initial](2) Interest Rate: 11 3/4% per annum. Interest Payment Dates: April 15 and October 15, commencing October 15, 2001. Regular Record Dates: April 1 and October 1. Reference is hereby make to the further provisions of this Note set forth on the reverse hereof, which will for all purposes have the same effect as if set forth at this place. IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officer. Date: CENTURY ALUMINUM COMPANY By: --------------------------------- Name: Title: (1)For Global Notes. (2)For Initial Notes or Initial Additional Notes only. A-1 102 (Form of Trustee's Certificate of Authentication) This is one of the 11 3/4% Senior Secured First Mortgage Notes Due 2008 described in the Indenture referred to in this Note. WILMINGTON TRUST COMPANY, as Trustee By: ---------------------------------- Authorized Signatory A-2 103 [REVERSE SIDE OF NOTE] CENTURY ALUMINUM COMPANY 11 3/4% Senior Secured First Mortgage Note Due 2008 1. Principal and Interest. The Company promises to pay the principal of this Note on April 15, 2008. The Company promises to pay interest on the principal amount of this Note on each interest payment date, as set forth on the face of this Note, at the rate of 11 3/4% per annum [(subject to adjustment as provided below)].(1) Interest will be payable semiannually (to the holders of record of the Notes at the close of business on the April 1 or October 1 immediately preceding the interest payment date) on each interest payment date, commencing October 15, 2001. The Holder of this Note is entitled to the benefits of the Registration Rights Agreement, dated April 2, 2001, among the Company, the Guarantors party thereto and the Initial Purchasers named therein (the "REGISTRATION RIGHTS AGREEMENT"). In the event that the Exchange Offer (as defined in the Registration Rights Agreement) is not consummated and the Shelf Registration Statement (as defined in the Registration Rights Agreement) is not declared effective on or prior to the date that is 180 days after the Issue Date (the "EFFECTIVENESS DEADLINE"), the interest rate on this Note will increase by a rate of 0.50% per annum until the Exchange Offer is consummated or the Shelf Registration Statement is declared effective by the Commission. The interest rate on this Note will not increase by more than 0.50% per annum notwithstanding the Company's failure to meet more than one of these requirements.](2) Interest on this Note will accrue from the most recent date to which interest has been paid on this Note [or the Note surrendered in exchange for this Note]3 (or, if there is no existing default in the payment of interest and if this Note is authenticated between a regular record date and the next interest payment date, from such interest payment date) or, if no interest has been paid, from the Issue Date. Interest will be computed in the basis of a 360-day year of twelve 30-day months. The Company will pay interest on overdue principal, premium, if any, and interest at a rate per annum that is 2% in excess of 11 3/4%. Interest not paid when due and any interest on principal, premium or interest not paid when due will be paid to the - -------- (1)Include only for Initial Note. (2)Include only for Initial Note. (3)Include only for Exchange Note. A-3 104 Persons that are Holders on a special record date, which will be the 15th day preceding the date fixed by the Company for the payment of such interest, whether or not such day is a Business Day. At least 15 days before a special record date, the Company will send to each Holder and to the Trustee a notice that sets forth the special record date, the payment date and the amount of interest to be paid. 2. Indentures; Note Guaranty. This is one of the Notes issued under an Indenture dated as of April 2, 2001 (as amended from time to time, the "INDENTURE"), among the Company, the Guarantors party thereto and Wilmington Trust Company, as Trustee. Capitalized terms used herein are used as defined in the Indenture unless otherwise indicated. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture will control. The Notes are general obligations of the Company, secured by Liens on the Collateral pursuant to the Security Documents. The Indenture limits the original aggregate principal amount of the Notes to $325,000,000. This Note is guarantied, as set forth in the Indenture and secured by Liens on the Collateral pursuant to the Security Documents. 3. Redemption and Repurchase; Discharge Prior to Redemption or Maturity. This Note is subject to optional redemption, and may be the subject of an Offer to Purchase, as further described in the Indenture. There is no sinking fund or mandatory redemption applicable to this Note. If the Company deposits with the Trustee money or U.S. Government Obligations sufficient to pay the then outstanding principal of, premium, if any, and accrued interest on the Notes to redemption or maturity, the Company may in certain circumstances be discharged from the Indenture and the Notes or may be discharged from certain of its obligations under certain provisions of the Indenture. 4. Registered Form; Denominations; Transfer; Exchange. The Notes are in registered form without coupons in denominations of $1,000 principal amount and any multiple of $1,000 in excess thereof. A Holder may register the transfer or exchange of Notes in accordance with the Indenture. The Trustee may require a Holder to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. Pursuant to the Indenture, there are certain periods during which the Trustee will not be required to issue, register the transfer of or exchange any Note or certain portions of a Note. 5. Defaults and Remedies. A-4 105 If an Event of Default, as defined in the Indenture, occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Notes may declare all the Notes to be due and payable. If a bankruptcy default with respect to the Company occurs and is continuing, the Notes automatically become due and payable. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Notes. Subject to certain limitations, Holders of a majority in principal amount of the Notes then outstanding may direct the Trustee in its exercise of remedies. 6. Amendment and Waiver. Subject to certain exceptions, the Indenture, the Notes and any Security Document may be amended, or default may be waived, with the consent of the Holders of a majority in principal amount of the outstanding Notes. Without notice to or the consent of any Holder, the Company and the Trustee may amend or supplement the Indenture, the Notes and any Security Document to, among other things, cure any ambiguity, defect or inconsistency. 7. Authentication. This Note is not valid until the Trustee (or Authenticating Agent) signs the certificate of authentication on the other side of this Note. 8. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A/ (= Uniform Gifts to Minors Act). The Company will furnish a copy of the Indenture to any Holder upon written request and without charge. A-5 106 [FORM OF TRANSFER NOTICE] FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto Insert Taxpayer Identification No. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Please print or typewrite name and address including zip code of assignee - -------------------------------------------------------------------------------- the within Note and all rights thereunder, hereby irrevocably constituting and appointing - -------------------------------------------------------------------------------- attorney to transfer said Note on the books of the Company with full power of substitution in the premises. A-6 107 [THE FOLLOWING PROVISION TO BE INCLUDED ON ALL CERTIFICATES BEARING A RESTRICTED LEGEND] In connection with any transfer of this Note occurring prior to ______________, the undersigned confirms that such transfer is made without utilizing any general solicitation or general advertising and further as follows: Check One / / (1) This Note is being transferred to a "qualified institutional buyer" in compliance with Rule 144A under the Securities Act of 1933, as amended and certification in the form of Exhibit F to the Indenture is being furnished herewith. / / (2) This Note is being transferred to a Non-U.S. Person in compliance with the exemption from registration under the Securities Act of 1933, as amended, provided by Regulation S thereunder, and certification in the form of Exhibit E to the Indenture is being furnished herewith. or / / (3) This Note is being transferred other than in accordance with (1) or (2) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture. If none of the foregoing boxes is checked, the Trustee is not obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in the Indenture have been satisfied. Date:____________________ __________________________ Seller By________________________ NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever. Signature Guarantee:4 _______________________________ ________ (4)Signatures must be guaranteed by an "ELIGIBLE GUARANTOR INSTITUTION" meeting the requirements of the Registrar, which requirements include membership or participation in the Note Transfer Agent Medallion Program ("STAMP") or such other "SIGNATURE GUARANTEE PROGRAM" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. A-7 108 By______________________________ To be executed by an executive officer A-8 109 OPTION OF HOLDER TO ELECT PURCHASE If you wish to have all of this Note purchased by the Company pursuant to Section 4.12 or Section 4.13 of the Indenture, check the box: / / If you wish to have a portion of this Note purchased by the Company pursuant to Section 4.12 or Section 4.13 of the Indenture, state the amount (in original principal amount) below: $_____________________. Date:____________ Your Signature:__________________________ (Sign exactly as your name appears on the other side of this Note) Signature Guarantee:(1)_____________________________ ________ (1)Signatures must be guaranteed by an "ELIGIBLE GUARANTOR INSTITUTION" meeting the requirements of the Trustee, which requirements include membership or participation in the Note Transfer Agent Medallion Program ("STAMP") or such other "SIGNATURE GUARANTEE PROGRAM" as may be determined by the Trustee in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. A-9 110 SCHEDULE OF EXCHANGES OF NOTES(1) The following exchanges of a part of this Global Note for Physical Notes or a part of another Global Note have been made:
PRINCIPAL AMOUNT OF THIS GLOBAL NOTE AMOUNT OF DECREASE AMOUNT OF INCREASE FOLLOWING SUCH SIGNATURE OF IN PRINCIPAL AMOUNT IN PRINCIPAL AMOUNT DECREASE (OR AUTHORIZED OFFICER OF DATE OF EXCHANGE OF THIS GLOBAL NOTE OF THIS GLOBAL NOTE INCREASE) TRUSTEE
- -------- (1)For Global Notes A-10 111 EXHIBIT B SUPPLEMENTAL INDENTURE dated as of __________, ____ among CENTURY ALUMINUM COMPANY, The Guarantor(s) Party Hereto and WILMINGTON TRUST COMPANY, as Trustee ____________________________________ 11 3/4% SENIOR SECURED FIRST MORTGAGE NOTES DUE 2008 112 THIS SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), entered into as of __________, ____, among Century Aluminum Company, a Delaware corporation (the "COMPANY"), [insert each Guarantor executing this Supplemental Indenture and its jurisdiction of incorporation] (each an "UNDERSIGNED") and Wilmington Trust Company, as trustee (the "TRUSTEE"). RECITALS WHEREAS, the Company, the Guarantors party thereto and the Trustee entered into the Indenture, dated as of April 2, 2001 (the "INDENTURE"), relating to the Company's 11 3/4% Senior Secured First Mortgage Notes due 2008 (the "NOTES"); WHEREAS, as a condition to the Trustee entering into the Indenture and the purchase of the Notes by the Holders, the Company agreed pursuant to the Indenture to cause any newly acquired or created Domestic Restricted Subsidiaries to provide Guaranties. AGREEMENT NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and intending to be legally bound, the parties to this Supplemental Indenture hereby agree as follows: SECTION 1. Capitalized terms used herein and not otherwise defined herein are used as defined in the Indenture. SECTION 2. Each Undersigned, by its execution of this Supplemental Indenture, agrees to be a Guarantor under the Indenture and to be bound by the terms of the Indenture applicable to Guarantors, including, but not limited to, Article 10 thereof. SECTION 3. This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York. SECTION 4. This Supplemental Indenture may be signed in various counterparts which together will constitute one and the same instrument. SECTION 5. This Supplemental Indenture is an amendment supplemental to the Indenture and the Indenture and this Supplemental Indenture will henceforth be read together. SECTION 6. The Trustee makes no representation as to the validity or adequacy of this Supplemental Indenture or the recitals contained herein. B-1 113 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written. CENTURY ALUMINUM COMPANY, as Issuer By: --------------------------------- Name: Title: [GUARANTOR] By: --------------------------------- Name: Title: WILMINGTON TRUST COMPANY, as Trustee By: --------------------------------- Name: Title: B-2 114 EXHIBIT C RESTRICTED LEGEND THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT (A) IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A "QUALIFIED INSTITUTIONAL BUYER" (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (WITHIN THE MEANING OF RULE 501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT) AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) IN A PRINCIPAL AMOUNT OF NOT LESS THAN $100,000, TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, DELIVERS TO THE TRUSTEE A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE C-1 115 OBTAINED FROM THE TRUSTEE) RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE, OR (F) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) ABOVE OR (2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(E) OR (F) ABOVE, THE COMPANY RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. C-2 116 EXHIBIT D DTC LEGEND UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN. TRANSFERS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE INDENTURE. D-1 117 EXHIBIT E Regulation S Certificate _________, ____ Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, Delaware 19860 Attention: Corporate Trust Administration Re: Century Aluminum Company 11 3/4% Senior Secured First Mortgage Notes due 2008 (the "NOTES") Issued under the Indenture (the "INDENTURE") dated as of April 2, 2001 relating to the Notes Dear Sirs: Terms are used in this Certificate as used in Regulation S ("Regulation S") under the Securities Act of 1933, as amended (the "Securities Act"), except as otherwise stated herein. [CHECK A OR B AS APPLICABLE.] [ ] A. This Certificate relates to our proposed transfer of $____ principal amount of Notes issued under the Indenture. We hereby certify as follows: 1. The offer and sale of the Notes was not and will not be made to a person in the United States (unless such person is excluded from the definition of "U.S. person" pursuant to Rule 902(k)(2)(vi) or the account held by it for which it is acting is excluded from the definition of "U.S. person" pursuant to Rule 902(k)(2)(i) under the circumstances described in Rule 902(g)(3)) and such offer and sale was not and will not be specifically targeted at an identifiable group of U.S. citizens abroad. 2. Unless the circumstances described in the parenthetical in paragraph 1 above are applicable, either (a) at the time the buy order was originated, the buyer was outside the United States or we and any person acting on our behalf reasonably believed that the buyer was outside the United States or (b) the transaction was executed in, on or through the facilities of a designated offshore securities market, and neither we nor any person acting on our E-1 118 behalf knows that the transaction was pre-arranged with a buyer in the United States. 3. Neither we, any of our affiliates, nor any person acting on our or their behalf has made any directed selling efforts in the United States with respect to the Notes. 4. The proposed transfer of Notes is not part of a plan or scheme to evade the registration requirements of the Securities Act. 5. If we are a dealer or a person receiving a selling concession, fee or other remuneration in respect of the Notes, and the proposed transfer takes place during the Restricted Period (as defined in the Indenture), or we are an officer or director of the Company or an Initial Purchaser (as defined in the Indenture), we certify that the proposed transfer is being made in accordance with the provisions of Rule 904(b) of Regulation S. [ ] B. This Certificate relates to our proposed exchange of $____ principal amount of Notes issued under the Indenture for an equal principal amount of Notes to be held by us. We hereby certify as follows: 1. At the time the offer and sale of the Notes was made to us, either (i) we were not in the United States or (ii) we were excluded from the definition of "U.S. person" pursuant to Rule 902(k)(2)(vi) or the account held by us for which we were acting was excluded from the definition of "U.S. person" pursuant to Rule 902(k)(2)(i) under the circumstances described in Rule 902(g)(3); and we were not a member of an identifiable group of U.S. citizens abroad. 2. Unless the circumstances described in paragraph 1(ii) above are applicable, either (a) at the time our buy order was originated, we were outside the United States or (b) the transaction was executed in, on or through the facilities of a designated offshore securities market and we did not pre-arrange the transaction in the United States. 3. The proposed exchange of Notes is not part of a plan or scheme to evade the registration requirements of the Securities Act. E-2 119 You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Very truly yours, [NAME OF SELLER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)] By: --------------------------------- Name: Title: Address: Date: --------------------------- E-3 120 EXHIBIT F Rule 144A Certificate ---------, ---- Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, Delaware 19860 Attention: Corporate Trust Administration Re: Century Aluminum Company 11 3/4% Senior Secured First Mortgage Notes due 2008 (the "NOTES") Issued under the Indenture (the "INDENTURE") dated as as of April 2, 2001 relation to the Notes Ladies and Gentlemen: TO BE COMPLETED BY PURCHASER IF (1) ABOVE IS CHECKED. This Certificate relates to: [CHECK A OR B AS APPLICABLE.] [ ] A. Our proposed purchase of $____ principal amount of Notes issued under the Indenture. [ ] B. Our proposed exchange of $____ principal amount of Notes issued under the Indenture for an equal principal amount of Notes to be held by us. We and, if applicable, each account for which we are acting, are a qualified institutional buyer within the meaning of Rule 144A ("Rule 144A") under the Securities Act of 1933, as amended (the "Securities Act"). If we are acting on behalf of an account, we exercise sole investment discretion with respect to such account. We are aware that the transfer of Notes to us, or such exchange, as applicable, is being made in reliance upon the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. Prior to the date of this Certificate we have received such information regarding the Company as we have requested pursuant to Rule 144A(d)(4) or have determined not to request such information. F-1 121 You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Very truly yours, [NAME OF PURCHASER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)] By: --------------------------------- Name: Title: Address: Date: ------------------------- F-2 122 EXHIBIT G Institutional Accredited Investor Certificate Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, Delaware 19860 Attention: Corporate Trust Administration Re: Century Aluminum Company 11 3/4% Senior Secured First Mortgage Notes due 2008 (the "NOTES") Issued under the Indenture (the "INDENTURE") dated as as of April 2, 2001 relation to the Notes Ladies and Gentlemen: This Certificate relates to: [CHECK A OR B AS APPLICABLE.] [ ] A. Our proposed purchase of $____ principal amount of Notes issued under the Indenture. [ ] B. Our proposed exchange of $____ principal amount of Notes issued under the Indenture for an equal principal amount of Notes to be held by us. We hereby confirm that: 1. We are an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the "Securities Act") (an "Institutional Accredited Investor"). 2. Any acquisition of Notes by us will be for our own account or for the account of one or more other Institutional Accredited Investors as to which we exercise sole investment discretion. 3. We have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of an investment in the Notes and we and any accounts for which we are acting are able to bear the economic risks of and an entire loss of our or their investment in the Notes. 4. We are not acquiring the Notes with a view to any distribution thereof in a transaction that would violate the Securities Act or the securities laws of G-1 123 any State of the United States or any other applicable jurisdiction; provided that the disposition of our property and the property of any accounts for which we are acting as fiduciary will remain at all times within our and their control. 5. We acknowledge that the Notes have not been registered under the Securities Act and that the Notes may not be offered or sold within the United States or to or for the benefit of U.S. persons except as set forth below. 6. The principal amount of Notes to which this Certificate relates is at least equal to $100,000. We agree for the benefit of the Company, on our own behalf and on behalf of each account for which we are acting, that such Notes may be offered, sold, pledged or otherwise transferred only in accordance with the Securities Act and any applicable securities laws of any State of the United States and only (a) to the Company, (b) pursuant to a registration statement which has become effective under the Securities Act, (c) to a qualified institutional buyer in compliance with Rule 144A under the Securities Act, (d) in an offshore transaction in compliance with Rule 904 of Regulation S under the Securities Act, (e) in a principal amount of not less than $100,000, to an Institutional Accredited Investor that, prior to such transfer, delivers to the Trustee a duly completed and signed certificate (the form of which may be obtained from the Trustee) relating to the restrictions on transfer of the Notes or (f) pursuant to an exemption from registration provided by Rule 144 under the Securities Act or any other available exemption from the registration requirements of the Securities Act. Prior to the registration of any transfer in accordance with (c) or (d) above, we acknowledge that a duly completed and signed certificate (the form of which may be obtained from the Trustee) must be delivered to the Trustee. Prior to the registration of any transfer in accordance with (e) or (f) above, we acknowledge that the Company reserves the right to require the delivery of such legal opinions, certifications or other evidence as may reasonably be required in order to determine that the proposed transfer is being made in compliance with the Securities Act and applicable state securities laws. We acknowledge that no representation is made as to the availability of any Rule 144 exemption from the registration requirements of the Securities Act. We understand that the Trustee will not be required to accept for registration of transfer any Notes acquired by us, except upon presentation of evidence satisfactory to the Company and the Trustee that the foregoing restrictions on transfer have been complied with. We further understand that the Notes acquired by us will be in the form of definitive physical certificates and that such certificates will bear a legend reflecting the substance of the preceding paragraph. We further agree to provide to any person acquiring any of the Notes from us a notice advising such person that resales of the Notes are restricted as stated herein and that certificates representing the Notes will bear a legend to that effect. G-2 124 We agree to notify you promptly in writing if any of our acknowledgments, representations or agreements herein ceases to be accurate and complete. We represent to you that we have full power to make the foregoing acknowledgments, representations and agreements on our own behalf and on behalf of any account for which we are acting. You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Very truly yours, [NAME OF PURCHASER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)] By: ---------------------------------- Name: Title: Address: Date: ------------------------ G-3 125 Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows: By: ------------------------------------------------ Date: ----------------------------------------------- Taxpayer ID number: -------------------------------- G-4 126 EXHIBIT H [COMPLETE FORM I OR FORM II AS APPLICABLE.] [FORM I] Certificate of Beneficial Ownership To: Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, Delaware 19860 Attention: Corporate Trust Administration OR [Euroclear Bank S.A./N.V., as operator of the Euroclear System] OR [Clearstream Banking SA] Re: Century Aluminum Company 11 3/4% Senior Secured First Mortgage Notes due 2008 (the "NOTES") Issued under the Indenture (the "INDENTURE") dated as as of April 2, 2001 relating to the Notes Ladies and Gentlemen: We are the beneficial owner of $____ principal amount of Notes issued under the Indenture and represented by a Temporary Offshore Global Note (as defined in the Indenture). We hereby certify as follows: [CHECK A OR B AS APPLICABLE.] [ ] A. We are a non-U.S. person (within the meaning of Regulation S under the Securities Act of 1933, as amended). [ ] B. We are a U.S. person (within the meaning of Regulation S under the Securities Act of 1933, as amended) that purchased the Notes in a transaction that did not require registration under the Securities Act of 1933, as amended. You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. H-1 127 Very truly yours, [NAME OF BENEFICIAL OWNER] By: ---------------------------------- Name: Title: Address: Date: ------------------------------ [FORM II] Certificate of Beneficial Ownership To: Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, Delaware 19860 Attention: Corporate Trust Administration Re: Century Aluminum Company 11 3/4% Senior Secured First Mortgage Notes due 2008 (the "NOTES") Issued under the Indenture (the "INDENTURE") dated as as of April 2, 2001 relating to the Notes Ladies and Gentlemen: This is to certify that based solely on certifications we have received in writing, by tested telex or by electronic transmission from member organizations ("Member Organizations") appearing in our records as persons being entitled to a portion of the principal amount of Notes represented by a Temporary Offshore Global Note issued under the above-referenced Indenture, that as of the date hereof, $____ principal amount of Notes represented by the Temporary Offshore Global Note being submitted herewith for exchange is beneficially owned by persons that are either (i) non-U.S. persons (within the meaning of Regulation S under the Securities Act of 1933, as amended) or (ii) U.S. persons that purchased the Notes in a transaction that did not require registration under the Securities Act of 1933, as amended. We further certify that (i) we are not submitting herewith for exchange any portion of such Temporary Offshore Global Note excepted in such Member Organization certifications and (ii) as of the date hereof we have not received any notification from any Member Organization to the effect that the statements made by such Member Organization with respect to any portion of such Temporary Offshore Global Note H-2 128 submitted herewith for exchange are no longer true and cannot be relied upon as of the date hereof. You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. Yours faithfully, [EUROCLEAR BANK S.A./N.V., as operator of the Euroclear System] OR [CLEARSTREAM BANKING SA] By: ---------------------------------- Name: Title: Address: Date: ------------------------------ H-3 129 EXHIBIT I TEMPORARY OFFSHORE GLOBAL NOTE LEGEND THIS NOTE IS A TEMPORARY GLOBAL NOTE. PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD BY ANY PERSON OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON THAT PURCHASED SUCH INTEREST IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). BENEFICIAL INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR PHYSICAL NOTES OTHER THAN A PERMANENT GLOBAL NOTE IN ACCORDANCE WITH THE TERMS OF THE INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN REGULATION S UNDER THE SECURITIES ACT. I-1 130 EXHIBIT J OFFICERS' CERTIFICATE PURSUANT TO SECTION 11.02 This certificate is being delivered pursuant to Section 11.02 of the Indenture (the "INDENTURE") dated as of April 2, 2001, among Century Aluminum Company (the "COMPANY"), the Guarantors party thereto and Wilmington Trust Company, as Trustee (the "TRUSTEE"). Terms defined in the Indenture and not otherwise defined herein are used herein as defined therein. The undersigned officers of the Company do hereby certify as follows and request release of the collateral listed on Schedule I (the "COLLATERAL") from the Lien of the Indenture and the Security Documents as of the date set forth below: 1. All conditions precedent under the Indenture and the Security Documents to the release of the Collateral from the Lien have been complied with. 2. The disposition of the Collateral to [name of transferee] is [in compliance with Section 4.13(a) and Section 4.13(b) of the Indenture as described][exempt from Section 4.13(a) and Section 4.13(b) of the Indenture for the reason set forth] below: [set forth evidence of compliance or reason for exemption in detail]. 3. The proposed disposition of the Collateral to [name of transferee] is, in the Board of Directors' good faith judgment (as evidenced by the Board Resolution attached hereto as Exhibit A), desirable in the proper conduct of the business of the Company and the Restricted Subsidiaries, taken as a whole. 4. Attached hereto as Exhibit B is an [engineer's][appraiser's] certificate as required by, and complying with the requirements of, Section 11.02(a)(ii) [and Section 11.02(b)] of the Indenture. The [engineer][appraiser] is [not] independent [if not independent - provide calculation evidencing that an independent expert is not required pursuant to Section 11.02] [5. The cash proceeds of the disposition of the Collateral will be deposited into the Cash Collateral Account.][The Collateral being disposed of consists of amounts held in the Cash Collateral Account, and the proceeds are being applied in accordance with Section 4.13(d) or Section 4.13(e) of the Indenture. Set forth below is an explanation of the use of proceeds.] We have read the covenants and conditions referred to in paragraph 1 above and the other documents referred to herein and our statements are based upon review of the Board Resolution, the [appraiser's][engineer's] certificate, the Indenture [and add other appropriate documents] and such further examination or investigation as we deemed necessary to enable us to express an informed opinion as to the matters set forth above. J-1 131 IN WITNESS WHEREOF, we have signed this certificate. Dated: Century Aluminum Company By: ------------------------ Name: Title: By: ------------------------ Name: Title: Receipt of this Officers' Certificate and the accompanying exhibits is acknowledged, and the Collateral is hereby released from the Lien of the Indenture and the Security Documents upon consummation of the disposition referred to above on the date hereof [and delivery of the cash proceeds to the Cash Collateral Account][and satisfaction of the Collateral Requirements with respect to the property received in exchange]. WILMINGTON TRUST COMPANY, as Trustee and Collateral Agent By: ------------------------------------------------- Name: Title: J-2 132 SCHEDULE I [Description of property to be disposed] I-1 EX-4.3 7 y47973ex4-3.txt REGISTRATION RIGHTS AGREEMENT 1 Exhibit 4.3 ================================================================================ REGISTRATION RIGHTS AGREEMENT Dated as of April 2, 2001 among CENTURY ALUMINUM COMPANY, the GUARANTORS party hereto and CREDIT SUISSE FIRST BOSTON CORPORATION, and FLEET SECURITIES, INC. ================================================================================ 2 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and entered into as of April 2, 2001, among CENTURY ALUMINUM COMPANY, a Delaware corporation (the "COMPANY"), each of the GUARANTORS party hereto (the "GUARANTORS") and CREDIT SUISSE FIRST BOSTON CORPORATION and FLEET SECURITIES, INC. (the "INITIAL PURCHASERS"). This Agreement is made pursuant to the Purchase Agreement dated March 28, 2001, among the Company, the Guarantors and the Initial Purchasers (the "PURCHASE AGREEMENT"), which provides for the sale by the Company to the Initial Purchasers of an aggregate of $325,000,000 principal amount of the Company's 11.75% Senior Secured First Mortgage Notes due 2008 (the "SECURITIES"). The Notes will be unconditionally and irrevocably guaranteed (the "GUARANTEES") as to payment of principal, premium, if any, and interest by the Guarantors and shall be secured by a pledge of certain plant, property and equipment of the Company and the Guarantors. In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Company and the Guarantors have agreed to provide to the Initial Purchasers and their direct and indirect transferees the registration rights set forth in this Agreement. The execution of this Agreement by the Company and the Guarantors is a condition to the closing under the Purchase Agreement. In consideration of the foregoing, the parties hereto agree as follows: 1. Definitions As used in this Agreement, the following capitalized defined terms shall have the following meanings: "1933 ACT" shall mean the Securities Act of 1933, as amended from time to time. "1934 ACT" shall mean the Securities Exchange Act of 1934, as amended from time to time. "BLOCKAGE NOTICE" shall have the meaning set forth in Section 3 hereof. "CLOSING DATE" shall mean the Closing Date as defined in the Purchase Agreement. 3 "COMPANY" shall have the meaning set forth in the preamble and shall also include the Company's successors. "EXCHANGE OFFER" shall mean the exchange offer by the Company of Exchange Securities for Registrable Securities pursuant to Section 2(a) hereof. "EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933 Act effected pursuant to Section 2(a) hereof. "EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to such registration statement, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "EXCHANGE SECURITIES" shall mean securities issued by the Company under the Indenture and guaranteed by the Guarantors containing terms identical to the Securities (except that (i) interest thereon shall accrue from the last date on which interest was paid on the Securities (or if authenticated between a record date and interest payment date, from such interest payment date) or, if no such interest has been paid, from April 2, 2001, (ii) the Exchange Securities will be registered under the 1933 Act and will not contain restrictions on transfer and (iii) the provisions relating to additional interest will be eliminated) and to be offered to Holders of Securities in exchange for Securities pursuant to the Exchange Offer. "GUARANTORS" shall mean the Guarantors listed on the signature pages hereof, and shall also include any successor to a Guarantor. "HOLDER" shall mean the Initial Purchasers, for so long as they own any Registrable Securities, and each of their respective successors, assigns and direct and indirect transferees who become registered owners of Registrable Securities under the Indenture; provided that for purposes of Sections 4 and 5 of this Agreement, the term "HOLDER" shall include Participating Broker-Dealers (as defined in Section 4(a)). "INDENTURE" shall mean the Indenture relating to the Securities dated as of April 2, 2001 among the Company, the Guarantors party thereto and Wilmington Trust Company, as trustee, and as the same may be amended from time to time in accordance with the terms thereof. "INITIAL PURCHASERS " shall have the meaning set forth in the preamble. 2 4 "MAJORITY HOLDERS" shall mean the Holders of a majority of the aggregate principal amount of outstanding Registrable Securities; provided that whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company, the Guarantors or any of their affiliates (as such term is defined in Rule 405 under the 1933 Act) (other than the Initial Purchasers or subsequent Holders of Registrable Securities if such subsequent holders are deemed to be such affiliates solely by reason of their holding of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage or amount. "PERSON" shall mean an individual, partnership, limited liability company, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof. "PROSPECTUS" shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to such prospectus, and in each case including all material incorporated by reference therein. "PURCHASE AGREEMENT" shall have the meaning set forth in the preamble. "REGISTRABLE SECURITIES" shall mean the Securities (including the Guarantees); provided, however, that the Securities shall cease to be Registrable Securities (i) when a Registration Statement with respect to such Securities shall have been declared effective under the 1933 Act and such Securities shall have been disposed of pursuant to such Registration Statement, (ii) when such Securities have been sold to the public pursuant to Rule 144(k) (or any similar provision then in force, but not Rule 144A) under the 1933 Act or (iii) when such Securities shall have ceased to be outstanding. "REGISTRATION EXPENSES" shall mean any and all expenses incident to performance of or compliance by the Company and the Guarantors with this Agreement, including without limitation: (i) all SEC, stock exchange or National Association of Securities Dealers, Inc. registration and filing fees, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws (including reasonable and documented fees and disbursements of counsel for any underwriters or Holders in connection with blue sky qualification of any of the Exchange Securities or Registrable Securities), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and 3 5 distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements and other documents relating to the performance of and compliance with this Agreement, (iv) all rating agency fees, (v) all fees and disbursements relating to the qualification of the Indenture under applicable securities laws, (vi) the fees and disbursements of the Trustee and its counsel, (vii) the fees and disbursements of counsel for the Company and the Guarantors and, in the case of a Shelf Registration Statement, the reasonable and documented fees and disbursements of one counsel for the Holders (which counsel shall be selected by the Majority Holders and which counsel may also be counsel for the Initial Purchasers) and (viii) the fees and disbursements of the independent public accountants of the Company and the Guarantors, including the expenses of any special audits or "COLD COMFORT" letters required by or incident to such performance and compliance, but excluding fees and expenses of counsel to the underwriters (other than fees and expenses set forth in clause (ii) above) or the Holders and underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder, which shall be the responsibility of the Holders. "REGISTRATION STATEMENT" shall mean any registration statement of the Company and the Guarantors that covers any of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement and all amendments and supplements to any such Registration Statement, including post- effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. "SEC" shall mean the Securities and Exchange Commission. "SHELF REGISTRATION" shall mean a registration effected pursuant to Section 2(b) hereof. "SHELF REGISTRATION STATEMENT" shall mean a "SHELF" registration statement of the Company and the Guarantors pursuant to the provisions of Section 2(b) of this Agreement which covers (x) all of the Registrable Securities, except Registrable Securities that the Holders thereof have elected not to include in such Shelf Registration Statement and (y) no other securities unless approved by the Holders whose Registrable Securities are covered by such Shelf Registration Statement, on an appropriate form under Rule 415 under the 1933 Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. 4 6 "TRUSTEE" shall mean the trustee with respect to the Securities under the Indenture. "UNDERWRITER" shall have the meaning set forth in Section 3 hereof. "UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" shall mean a registration in which Registrable Securities are sold to an Underwriter for reoffering to the public. 2. Registration Under the 1933 Act. (a) To the extent not prohibited by any applicable law or applicable interpretation of the Staff of the SEC, the Company and the Guarantors shall use their best efforts to cause to be filed an Exchange Offer Registration Statement covering the offer by the Company and the Guarantors to the Holders to exchange all of the Registrable Securities for Exchange Securities and to have such Registration Statement remain effective until the closing of the Exchange Offer. The Company and the Guarantors shall commence the Exchange Offer promptly after the Exchange Offer Registration Statement has been declared effective by the SEC and use their best efforts to have the Exchange Offer consummated not later than 60 days after such effective date. The Company and the Guarantors shall commence the Exchange Offer by mailing the related exchange offer Prospectus and accompanying documents to each Holder stating, in addition to such other disclosures as are required by applicable law: (i) that the Exchange Offer is being made pursuant to this Registration Rights Agreement and that all Registrable Securities validly tendered pursuant to the Exchange Offer will be accepted for exchange; (ii) the dates of acceptance for exchange (which shall be a period of at least 20 business days from the date such notice is mailed) (the "EXCHANGE DATES"); (iii) that any Registrable Security not tendered will remain outstanding and continue to accrue interest, but will not retain any rights under this Registration Rights Agreement; (iv) that Holders electing to have a Registrable Security exchanged pursuant to the Exchange Offer will be required to surrender such Registrable Security, together with the enclosed 5 7 letters of transmittal, to the institution and at the address (located in the Borough of Manhattan, The City of New York) specified in the notice prior to the close of business on the last Exchange Date; (v) that Holders electing to have Registrable Securities exchanged in the Exchange Offer shall be required to (a) represent that all Exchange Securities to be received by them shall be acquired in the ordinary course of their business and that at the time of the consummation of the Exchange Offer they shall have no arrangement or understanding to participate in the distribution (within the meaning of the 1933 Act) of the Exchange Securities and (b) make such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to render the use of Form S-4 or other appropriate form under the 1933 Act available; and (vi) that Holders will be entitled to withdraw their election, not later than the close of business on the last Exchange Date, by sending to the institution and at the address (located in the Borough of Manhattan, The City of New York) specified in the notice a telegram, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Registrable Securities delivered for exchange and a statement that such Holder is withdrawing his election to have such Securities exchanged. As soon as practicable after the last Exchange Date, the Company and the Guarantors shall: (i) accept for exchange Registrable Securities or portions thereof properly tendered and not validly withdrawn pursuant to the Exchange Offer; and (ii) deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Securities or portions thereof so accepted for exchange and issue, and cause the Trustee to promptly authenticate and mail to each Holder, an Exchange Security equal in principal amount to the principal amount of the Registrable Securities surrendered by such Holder. The Company and the Guarantors shall use their respective best efforts to complete the Exchange Offer as provided above and shall comply with the applicable requirements of the 1933 Act, the 1934 Act and other applicable laws and regulations in connection with the Exchange Offer. The Exchange Offer shall 6 8 not be subject to any conditions, other than that the Exchange Offer does not violate applicable law or any applicable interpretation of the Staff of the SEC. The Company and the Guarantors shall inform the Initial Purchasers of the names and addresses of the Holders to whom the Exchange Offer is made, and the Initial Purchasers shall have the right, subject to applicable law, to contact such Holders and otherwise facilitate the tender of Registrable Securities in the Exchange Offer. (b) In the event that (i) the Company and the Guarantors determine that the Exchange Offer Registration provided for in Section 2(a) above is not available or may not be consummated as soon as practicable after the last Exchange Date because it would violate applicable law or the applicable interpretations of the Staff of the SEC, (ii) the Exchange Offer is not for any other reason consummated by September 29, 2001 or (iii) the Exchange Offer has been completed and in the opinion of counsel for the Initial Purchasers a Registration Statement must be filed and a Prospectus must be delivered by the Initial Purchasers in connection with any offering or sale of Registrable Securities, the Company and the Guarantors shall use their best efforts to cause to be filed as soon as practicable after such determination, date or notice of such opinion of counsel is given to the Company, as the case may be, a Shelf Registration Statement providing for the sale by the Holders of all of the Registrable Securities and to have such Shelf Registration Statement declared effective by the SEC. In the event the Company and the Guarantors are required to file a Shelf Registration Statement solely as a result of the matters referred to in clause (iii) of the preceding sentence, the Company and the Guarantors shall use their best efforts to file and have declared effective by the SEC both an Exchange Offer Registration Statement pursuant to Section 2(a) with respect to all Registrable Securities and a Shelf Registration Statement (which may be a combined Registration Statement with the Exchange Offer Registration Statement) with respect to offers and sales of Registrable Securities held by the Initial Purchasers after completion of the Exchange Offer. The Company and the Guarantors agree to use their best efforts to keep the Shelf Registration Statement continuously effective until the expiration of the period referred to in Rule 144(k) with respect to the Registrable Securities or such shorter period that will terminate when all of the Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or cease to be outstanding or otherwise to be Registrable Securities. The Company and the Guarantors further agree to supplement or amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Company and the Guarantors for such Shelf Registration Statement or by the 1933 Act or by any other rules and regulations thereunder for 7 9 shelf registration or if reasonably requested by a Holder with respect to information relating to such Holder, and to use their best efforts to cause any such amendment to become effective and such Shelf Registration Statement to become usable as soon as thereafter practicable. The Company and the Guarantors agree to furnish to the Holders of Registrable Securities copies of any such supplement or amendment promptly after its being used or filed with the SEC. (c) The Company and the Guarantors shall pay all Registration Expenses in connection with the registration pursuant to Section 2(a) and Section 2(b). Each Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder's Registrable Securities pursuant to the Shelf Registration Statement. (d) An Exchange Offer Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement pursuant to Section 2(b) hereof will not be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that, if, after it has been declared effective, the offering of Registrable Securities pursuant to a Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, such Registration Statement will be deemed not to have become effective during the period of such interference until the offering of Registrable Securities pursuant to such Registration Statement may legally resume. In the event the Exchange Offer is not consummated and the Shelf Registration Statement is not declared effective on or prior to September 29, 2001, the interest rate on the Securities will be increased by a rate of 0.5% per annum from such date until the Exchange Offer is consummated or the Shelf Registration Statement is declared effective by the SEC. (e) Without limiting the remedies available to the Initial Purchasers and the Holders, each of the Company and the Guarantors acknowledges that any failure by it to comply with its obligations under Section 2(a) and Section 2(b) hereof may result in material injury to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be reasonably required to specifically enforce the Company's or such Guarantor's obligations under Section 2(a) and Section 2(b) hereof. 8 10 3. Registration Procedures. In connection with the obligations of the Company and the Guarantors with respect to the Registration Statements pursuant to Section 2(a) and Section 2(b) hereof, the Company and the Guarantors shall as expeditiously as possible: (a) prepare and file with the SEC a Registration Statement on the appropriate form under the 1933 Act, which form (x) shall be selected by the Company and the Guarantors and (y) shall, in the case of a Shelf Registration, be available for the sale of the Registrable Securities by the selling Holders thereof and (z) shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith, and use their best efforts to cause such Registration Statement to become effective and remain effective in accordance with Section 2 hereof; (b) prepare and file with the SEC such amendments and post- effective amendments to each Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period and cause each Prospectus to be supplemented by any required prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424 under the 1933 Act; to keep each Prospectus current during the period described under Section 4(3) and Rule 174 under the 1933 Act that is applicable to transactions by brokers or dealers with respect to the Registrable Securities or Exchange Securities; (c) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities, to counsel for the Initial Purchasers, to counsel for the Holders and to each Underwriter of an Underwritten Offering of Registrable Securities, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder or Underwriter may reasonably request, in order to facilitate the public sale or other disposition of the Registrable Securities; and the Company and the Guarantors consent to the use of such Prospectus and any amendment or supplement thereto in accordance with applicable law by each of the selling Holders of Registrable Securities and any such Underwriters in connection with the offering and sale of the Registrable Securities covered by and in the manner described in such Prospectus or any amendment or supplement thereto in accordance with applicable law; (d) use their best efforts to register or qualify the Registrable Securities under all applicable state securities or "BLUE SKY" laws of such 9 11 jurisdictions as any Holder of Registrable Securities covered by a Registration Statement shall reasonably request in writing by the time the applicable Registration Statement is declared effective by the SEC, to cooperate with such Holders in connection with any filings required to be made with the National Association of Securities Dealers, Inc. and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in each such jurisdiction of such Registrable Securities owned by such Holder; provided, however, that neither the Company nor any Guarantor shall be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d), (ii) file any general consent to service of process or (iii) subject itself to taxation in any such jurisdiction if it is not so subject; (e) in the case of a Shelf Registration, notify each Holder of Registrable Securities, counsel for the Holders and counsel for the Initial Purchasers promptly and, if requested by any such Holder or counsel, confirm such advice in writing (i) when a Registration Statement has become effective and when any post-effective amendment thereto has been filed and becomes effective, (ii) of any request by the SEC or any state securities authority for amendments and supplements to a Registration Statement and Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) if, between the effective date of a Registration Statement and the closing of any sale of Registrable Securities covered thereby, the representations and warranties of the Company or any Guarantor contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to the offering cease to be true and correct in all material respects or if the Company or any Guarantor receives any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, (v) of the happening of any event during the period a Shelf Registration Statement is effective which makes any statement made in such Registration Statement or the related Prospectus untrue in any material respect or which requires the making of any changes in such Registration Statement or Prospectus in order to make the statements therein not misleading and (vi) of any determination by the Company or any Guarantor that a post-effective amendment to a Registration Statement would be appropriate; 10 12 (f) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest possible moment and provide immediate notice to each Holder of the withdrawal of any such order; (g) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto (without documents incorporated therein by reference or exhibits thereto, unless requested); (h) in the case of a Shelf Registration, cooperate with the selling Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing the Registrable Securities to be sold that are free of any restrictive legends and enable such Registrable Securities to be in such denominations (consistent with the provisions of the Indenture) and registered in such names as the selling Holders may reasonably request at least one business day prior to the closing of any sale of Registrable Securities; (i) in the case of a Shelf Registration, upon the occurrence of any event contemplated by Section 3(e)(v) hereof, use their best efforts to prepare and file with the SEC a supplement or post-effective amendment to a Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company and the Guarantors agree to notify the Holders with instructions to suspend use of the Prospectus as promptly as practicable after the occurrence of such an event, (provided that the Company is not required to specify the nature of the event giving rise to the notice requirement hereunder) and the Holders hereby agree to suspend use of the Prospectus until the Company and the Guarantors have amended or supplemented the Prospectus to correct such misstatement or omission; (j) a reasonable time prior to the filing of any Registration Statement, any Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or any document which is to be incorporated by reference into a Registration Statement or a Prospectus after the initial filing of a Registration Statement, provide copies of such document to the Initial Purchasers and their counsel (and, in the case of a 11 13 Shelf Registration Statement, the Holders and their counsel) and make such of the representatives of the Company and the Guarantors as shall be reasonably requested by the Initial Purchasers or their counsel (and, in the case of a Shelf Registration Statement, the Holders or their counsel) available for discussion of such document, and shall not at any time file or make any amendment to the Registration Statement, any Prospectus or any amendment of or supplement to a Registration Statement or a Prospectus or any document which is to be incorporated by reference into a Registration Statement or a Prospectus, of which the Initial Purchasers and their counsel (and, in the case of a Shelf Registration Statement, the Holders and their counsel) shall not have previously been advised and furnished a copy or to which the Initial Purchasers or their counsel (and, in the case of a Shelf Registration Statement, the Holders or their counsel) shall reasonably object; (k) obtain a CUSIP number for all Exchange Securities or Registrable Securities, as the case may be, not later than the effective date of a Registration Statement; (l) cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended (the "TIA"), in connection with the registration of the Exchange Securities or Registrable Securities, as the case may be, cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the TIA and execute, and use their best efforts to cause the Trustee to execute, all documents as may be required to effect such changes and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner; (m) in the case of a Shelf Registration, make available for inspection by a representative of the Holders of the Registrable Securities, any Underwriter participating in any disposition pursuant to such Shelf Registration Statement, and such attorneys and accountants as are designated by the Holders, at reasonable times and in a reasonable manner, all financial and other records, pertinent documents and properties of the Company and the Guarantors, and cause the respective officers, directors and employees of the Company and the Guarantors to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with a Shelf Registration Statement; provided that such persons shall first agree in writing with the Company that any information that is reasonably and in good faith designated by the Company in writing as confidential at the time of delivery of such 12 14 information shall be kept confidential by such persons unless (i) disclosure of such information is required by court or administrative order or is necessary to respond to inquiries of regulatory authorities, (ii) disclosure of such information is required by law (including any disclosure requirements pursuant to Federal securities laws in connection with the filing of the Shelf Registration Statement or the use of any Prospectus), (iii) such information becomes generally available to the public other than as a result of disclosure or failure to safeguard by any such person, or (iv) such information becomes available to any such person from a source other than the Company and such source is not bound by a confidentiality agreement or other obligation not to disclose such information; (n) in the case of a Shelf Registration, use their best efforts to cause all Registrable Securities to be listed on any securities exchange or any automated quotation system on which similar securities issued by the Company and the Guarantors are then listed if requested by the Majority Holders, to the extent such Registrable Securities satisfy applicable listing requirements; (o) use their best efforts to cause the Exchange Securities or Registrable Securities, as the case may be, to be rated by two nationally recognized statistical rating organizations (as such term is defined in Rule 436(g)(2) under the 1933 Act); (p) if reasonably requested by any Holder of Registrable Securities covered by a Registration Statement, (i) promptly incorporate in a Prospectus supplement or post-effective amendment such information with respect to such Holder as such Holder reasonably requests to be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as the Company or any Guarantor has received notification of the matters to be incorporated in such filing; and (q) in the case of a Shelf Registration, enter into such customary agreements and take all such other actions in connection therewith (including those reasonably requested by the Holders of a majority of the Registrable Securities being sold) in order to expedite or facilitate the disposition of such Registrable Securities including, but not limited to, an Underwritten Offering and in such connection, (i) to the extent possible, make such representations and warranties to the Holders and any Underwriters of such Registrable Securities with respect to the business of the Company, the Guarantors and their respective subsidiaries, the Registration Statement, Prospectus and documents incorporated by 13 15 reference or deemed incorporated by reference therein, if any, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings and confirm the same if and when requested, (ii) obtain opinions of counsel to the Company and the Guarantors (which counsel and opinions, in form, scope and substance, shall be reasonably satisfactory to the Holders and such Underwriters and their respective counsel) addressed to each selling Holder and Underwriter of Registrable Securities, covering the matters customarily covered in opinions requested in underwritten offerings, (iii) obtain "COLD COMFORT" letters from the independent certified public accountants of the Company and the Guarantors (and, if necessary, any other certified public accountant of any subsidiary of the Company or any Guarantor, or of any business acquired by the Company or any Guarantor for which financial statements and financial data are or are required to be included in the Registration Statement) addressed to each selling Holder and Underwriter of Registrable Securities, such letters to be in customary form and covering matters of the type customarily covered in "COLD COMFORT" letters in connection with underwritten offerings, and (iv) deliver such documents and certificates as may be reasonably requested by the Holders of a majority in principal amount of the Registrable Securities being sold or the Underwriters, and which are customarily delivered in underwritten offerings, to evidence the continued validity of the representations and warranties of the Company and the Guarantors made pursuant to clause (i) above and to evidence compliance with any customary conditions contained in an underwriting agreement. In the case of a Shelf Registration Statement, the Company and the Guarantors may require each Holder of Registrable Securities to furnish to them such information regarding the Holder and the proposed distribution by such Holder of such Registrable Securities as they may from time to time reasonably request in writing. No Holder of Registrable Securities shall be entitled to any additional interest thereon pursuant to Section 2(d) unless and until such Holder shall have provided all such information which is required by the 1933 Act or rules or regulations of the SEC to be included in the Shelf Registration Statement prior to the time it is declared effective. In the case of a Shelf Registration Statement, each Holder agrees that, upon receipt of any notice (a "BLOCKAGE NOTICE") from the Company or any Guarantor of (x) the happening of any event of the kind described in Section 3(e)(v) hereof, or 14 16 (y) the determination by the Company and the Guarantors that, in their reasonable best judgment and upon written advice of counsel, the continued effectiveness and use of the Shelf Registration Statement would require the disclosure of confidential information or interfere with any financing, acquisition, reorganization or other material transaction involving the Company, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to a Registration Statement until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(i) hereof (or a notice from the Company that such Holder may resume use of the existing Prospectus), and, if so directed by the Company or such Guarantor, such Holder will deliver to the Company or such Guarantor (at its expense) all copies in its possession, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. If the Company or any Guarantor shall give any such notice to suspend the disposition of Registrable Securities pursuant to a Registration Statement, the Company and the Guarantors shall extend the period during which the Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders shall have (x) received copies of the supplemented or amended Prospectus necessary to resume such dispositions or (y) a notice permitting use of the existing Prospectus. The Company may give any such notice only twice during any 365 day period and any such suspensions may not exceed 30 days for each suspension and there may not be more than two suspensions in effect during any 365 day period. The Holders of Registrable Securities covered by a Shelf Registration Statement who desire to do so may sell such Registrable Securities in an Underwritten Offering. In any such Underwritten Offering, the investment banker or investment bankers and manager or managers (the "UNDERWRITERS") that will administer the offering will be selected by the Majority Holders of the Registrable Securities included in such offering. 4. Participation of Broker-Dealers in Exchange Offer. (a) The Staff of the SEC has taken the position that any broker-dealer that receives Exchange Securities for its own account in the Exchange Offer in exchange for Securities that were acquired by such broker-dealer as a result of market-making or other trading activities (a "PARTICIPATING BROKER-DEALER"), may be deemed to be an "UNDERWRITER" within the meaning of the 1933 Act and must deliver a prospectus meeting 15 17 the requirements of the 1933 Act in connection with any resale of such Exchange Securities. The Company and the Guarantors understand that it is the Staff's position that if the Prospectus contained in the Exchange Offer Registration Statement includes a plan of distribution containing a statement to the above effect and the means by which Participating Broker-Dealers may resell the Exchange Securities, without naming the Participating Broker-Dealers or specifying the amount of Exchange Securities owned by them, such Prospectus may be delivered by Participating Broker-Dealers to satisfy their prospectus delivery obligation under the 1933 Act in connection with resales of Exchange Securities for their own accounts, so long as the Prospectus otherwise meets the requirements of the 1933 Act. (b) In light of the above, notwithstanding the other provisions of this Agreement, the Company and the Guarantors agree that the provisions of this Agreement as they relate to a Shelf Registration shall also apply to an Exchange Offer Registration to the extent, and with such reasonable modifications thereto as may be, reasonably requested by the Initial Purchasers or by one or more Participating Broker-Dealers, in each case as provided in clause (ii) below, in order to expedite or facilitate the disposition of any Exchange Securities by Participating Broker-Dealers consistent with the positions of the Staff recited in Section 4(a) above; provided that: (i) the Company and the Guarantors shall not be required to amend or supplement the Prospectus contained in the Exchange Offer Registration Statement, as would otherwise be contemplated by Section 3(i), for a period exceeding 180 days after the last Exchange Date (as such period may be extended pursuant to the penultimate paragraph of Section 3 of this Agreement) and Participating Broker-Dealers shall not be authorized by the Company and the Guarantors to deliver and shall not deliver such Prospectus after such period in connection with the resales contemplated by this Section 4; and (ii) the application of the Shelf Registration procedures set forth in Section 3 of this Agreement to an Exchange Offer Registration, to the extent not required by the positions of the Staff of the SEC or the 1933 Act and the rules and regulations thereunder, will be in conformity with the reasonable request in writing to the Company and the Guarantors by the Initial 16 18 Purchasers or with the reasonable request in writing to the Company and the Guarantors by one or more broker-dealers who certify to the Initial Purchasers, the Company and the Guarantors in writing that they anticipate that they will be Participating Broker- Dealers; and provided further that, in connection with such application of the Shelf Registration procedures set forth in Section 3 to an Exchange Offer Registration, the Company and the Guarantors shall be obligated (x) to deal only with one entity representing the Participating Broker-Dealers, which shall be Credit Suisse First Boston Corporation unless it elects not to act as such representative, in which case it shall be the entity chosen by the consent of a majority of the Participating Broker-Dealers, (y) to pay the fees and expenses of only one counsel representing the Participating Broker-Dealers, which shall be counsel to the Initial Purchasers unless such counsel elects not to so act, in which case it shall be the counsel chosen by the consent of a majority of the Participating Broker-Dealers and (z) to cause to be delivered only one, if any, "COLD COMFORT" letter with respect to the Prospectus in the form existing on the last Exchange Date and with respect to each subsequent amendment or supplement, if any, effected during the period specified in clause (i) above. (c) The Initial Purchasers shall have no liability to the Company, the Guarantors or any Holder with respect to any good faith request that they may make pursuant to Section 4(b) above. 5. Indemnification and Contribution. (a) The Company and the Guarantors agree, jointly and severally, to indemnify and hold harmless the Initial Purchasers, each Holder and each Person, if any, who controls any Initial Purchaser or any Holder within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, or is under common control with, or is controlled by, any Initial Purchaser or any Holder, from and against all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred by the Initial Purchaser any Holder or any such controlling or affiliated Person in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment thereto) pursuant to which Exchange Securities or Registrable Securities were registered under the 1933 Act, including all documents incorporated therein by reference, or caused by any omission or alleged omission to state therein a material fact required 17 19 to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or caused by any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (as amended or supplemented if the Company or any Guarantor shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact necessary to make the statements therein in light of the circumstances under which they were made not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission in reliance upon and in conformity with written information furnished to the Company by any Initial Purchaser or any selling Holder expressly for use therein; provided that the Company and the Guarantors shall not be liable to any Initial Purchaser, any Holder or any such controlling or affiliated Person with respect to any Initial Purchaser or Holder to the extent that any such losses, claims, damages or liabilities (the "LOSSES") arise out of or are based upon an untrue statement or alleged untrue statement of material fact or omission or alleged omission if either (A)(i) such Initial Purchaser or Holder was required by law to send or deliver, and failed to send or deliver, a copy of the Prospectus with or prior to delivery of written confirmation of the sale by such Initial Purchaser or Holder to the person asserting the claims from which such Losses arise and (ii) the Prospectus made available by the Company prior to the time of delivery of such confirmation would have corrected such untrue statement or alleged untrue statement or omission or alleged omission or (B)(i) such Holder disposed of Registrable Securities to the person asserting the claim from which such Losses arise pursuant to a Registration Statement and sent or delivered, or was required by law to send or deliver, a Prospectus to such person in connection with such disposition and (ii) such Holder received a Blockage Notice or a notice from the Company of the happening of an event of the kind described in Section 3(e)(iii) in writing prior to execution and delivery of a contract for such disposition. In connection with any Underwritten Offering permitted by Section 3, the Company and the Guarantors will also indemnify the Underwriters, if any, selling brokers, dealers and similar securities industry professionals participating in the distribution, their officers and directors and each Person who controls such Persons (within the meaning of the 1933 Act and the 1934 Act) to the same extent as provided above with respect to the indemnification of the Holders, if requested in connection with any Registration Statement. (b) Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company and the Guarantors, the Initial Purchasers and the other selling Holders, and each of their respective directors, 18 20 officers who sign the Registration Statement and each Person, if any, who controls the Company or any Guarantor, any Initial Purchaser and any other selling Holder within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same extent as the foregoing indemnity from the Company and the Guarantors to the Initial Purchasers and the Holders, but only with reference to any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment thereto) pursuant to which Exchange Securities or Registrable Securities were registered under the 1933 Act, including all documents incorporated therein by reference, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or caused by any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement thereto), or caused by any omission or alleged omission to state therein a material fact necessary to make the statements therein in light of the circumstances under which they were made not misleading, made in reliance upon and in conformity with written information furnished to the Company by such Holder expressly for use therein. (c) In case any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant to either paragraph (a) or paragraph (b) above, such Person (the "INDEMNIFIED PARTY") shall promptly notify the Person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing; provided that the failure to so notify the indemnifying party (i) will not relieve it from liability under paragraphs (a) and (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligations provided in paragraph (a) or (b) above. In case any such action is brought against any indemnified party, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other 19 21 than reasonable costs of investigation. It is understood that the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (A) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Initial Purchasers and all Persons, if any, who control any Initial Purchaser within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, (B) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Company and the Guarantors, their respective directors, officers who sign the Registration Statement and each Person, if any, who controls the Company or any Guarantor within the meaning of either such Section and (C) the fees and expenses of more than one separate firm (in addition to any local counsel) for all Holders and all Persons, if any, who control any Holders within the meaning of either such Section, and that all such fees and expenses shall be reimbursed as they are incurred. In such case involving the Initial Purchasers and Persons who control the Initial Purchasers, such firm shall be designated in writing by Credit Suisse First Boston Corporation. In such case involving the Holders and such Persons who control Holders, such firm shall be designated in writing by the Majority Holders. In all other cases, such firm shall be designated by the Company. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent but, if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which such indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and does not include a statement as to or an admission of fault, culpability or failure to act by or on behalf of any indemnified party. (d) If the indemnification provided for in paragraph (a) or paragraph (b) of this Section 5 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the 20 22 statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company and the Guarantors, on the one hand, and the Holders, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or any Guarantor or by the Holders and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Holders' respective obligations to contribute pursuant to this Section 5(d) are several in proportion to the respective principal amount of Registrable Securities of such Holder that were registered pursuant to a Registration Statement. (e) The Company, each Guarantor and each Holder agree that it would not be just or equitable if contribution pursuant to this Section 5 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 5, no Holder shall be required to indemnify or contribute any amount in excess of the amount by which the total price at which Registrable Securities were sold by such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 5 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. The indemnity and contribution provisions contained in this Section 5 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Initial Purchasers, any Holder or any Person controlling any Initial Purchaser or any Holder, or by or on behalf of the Company and the Guarantors, their officers or directors or any Person controlling the Company or any Guarantor, 21 23 (iii) acceptance of any of the Exchange Securities and (iv) any sale of Registrable Securities pursuant to a Shelf Registration Statement. 6. Miscellaneous. (a) No Inconsistent Agreements. Neither the Company nor any Guarantor has entered into, and on or after the date of this Agreement will enter into, any agreement which is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of other issued and outstanding securities of the Company or any Guarantor under any such agreements. (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company and the Guarantors have obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Registrable Securities affected by such amendment, modification, supplement, waiver or consent; provided, however, that no amendment, modification, supplement, waiver or consent to any departure from the provisions of Section 5 hereof shall be effective as against any Holder of Registrable Securities unless consented to in writing by such Holder. (c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telecopier, or any courier guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such Holder to the Company by means of a notice given in accordance with the provisions of this Section 6(c), which address initially is, with respect to the Initial Purchasers, the address set forth in the Purchase Agreement; and (ii) if to the Company and the Guarantors, initially at the Company's address set forth in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 6(c). All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged, if telecopied; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery. 22 24 Copies of all such notices, demands, or other communications shall be concurrently delivered by the Person giving the same to the Trustee, at the address specified in the Indenture. (d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement. If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such Person shall be entitled to receive the benefits hereof. The Initial Purchasers (in their capacity as Initial Purchasers) shall have no liability or obligation to the Company or the Guarantors with respect to any failure by a Holder to comply with, or any breach by any Holder of, any of the obligations of such Holder under this Agreement. (e) Purchases and Sales of Securities. The Company and the Guarantors shall not, and shall use their best efforts to cause their respective affiliates (as defined in Rule 405 under the 1933 Act) not to, purchase and then resell or otherwise transfer any Securities which constitute "restricted securities" under Rule 144 under the 1933 Act except pursuant to an effective registration statement under the 1933 Act. (f) Third Party Beneficiary. The Holders shall be third party beneficiaries to the agreements made hereunder between the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights or the rights of Holders hereunder. (g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 23 25 (h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (i) Governing Law. This Agreement shall be governed by the laws of the State of New York. (j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. 24 26 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. CENTURY ALUMINUM COMPANY By:______________________________________ Name: Title: CENTURY ALUMINUM OF WEST VIRGINIA, INC., as a Guarantor By:______________________________________ Name: Title: BERKELEY ALUMINUM, INC., as a Guarantor By:______________________________________ Name: Title: CENTURY OF KENTUCKY, INC., as a Guarantor By:______________________________________ Name: Title: 25 27 VIRGIN ISLANDS ALUMINA CORPORATION, LLC., as a Guarantor By:______________________________________ Name: Title: METALSCO LTD., as a Guarantor By:______________________________________ Name: Title: SKYLINER, INC., as a Guarantor By:______________________________________ Name: Title: NSA, LTD., as a Guarantor By:______________________________________ Name: Title: 26 28 Confirmed and accepted as of the date first above written: CREDIT SUISSE FIRST BOSTON CORPORATION FLEET SECURITIES, INC. By: Credit Suisse First Boston Corporation By:_____________________________________________ Name: Title: 27 EX-4.4 8 y47973ex4-4.txt MORTGAGE, ASSIGNMENT OF LEASES AND RENTS 1 Exhibit 4.4 This instrument was prepared by the attorney described below in consultation with counsel in the State in which the Property is located and, when recorded, the recorded counterparts should be returned to: Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10017 Attention: James P. McIntyre, Esq. ================================================================================ MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT dated as of April 2, 2001 from NSA, LTD., the Mortgagor, to WILMINGTON TRUST COMPANY, as Collateral Agent, the Mortgagee Property: Hancock County, Kentucky ================================================================================ THIS INSTRUMENT IS FOR COMMERCIAL PURPOSES AND CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS AND SECURES, INTER ALIA, OBLIGATIONS WHICH PROVIDE FOR AN INCREASING RATE OF INTEREST. 2 TABLE OF CONTENTS PAGE PREAMBLE......................................................................1 RECITALS......................................................................1 GRANTING CLAUSES..............................................................2 GRANTING CLAUSE I. Land...................................................2 GRANTING CLAUSE II. Improvements...........................................3 GRANTING CLAUSE III. Equipment..............................................3 GRANTING CLAUSE IV. Appurtenant Rights.....................................4 GRANTING CLAUSE V. Agreements.............................................4 GRANTING CLAUSE VI. Leases.................................................4 GRANTING CLAUSE VII. Rents, Issues and Profits..............................4 GRANTING CLAUSE VIII. Permits................................................5 GRANTING CLAUSE IX. Deposits...............................................5 GRANTING CLAUSE X. Proceeds and Awards....................................5 GRANTING CLAUSE XI. Further Property.......................................6 ARTICLE 1 DEFINITIONS AND INTERPRETATION Section 1.01. Definitions.................................................7 Section 1.02. Interpretation.............................................12 Section 1.03. Resolution of Drafting Ambiguities.........................13 ARTICLE 2 CERTAIN WARRANTIES AND COVENANTS OF THE MORTGAGOR Section 2.01. Title and Authority........................................13 Section 2.02. Secured Obligations........................................14 Section 2.03. Impositions................................................14 Section 2.04. Material Agreements and Legal and Insurance Requirements...15 Section 2.05. Status and Care of the Property............................16 Section 2.06. Permitted Contests.........................................17 Section 2.07. Other Instruments..........................................17 Section 2.08. Liens......................................................18 Section 2.09. Transfer...................................................18 i 3 PAGE ARTICLE 3 INSURANCE, CASUALTY AND CONDEMNATION Section 3.01. Insurance..................................................18 Section 3.02. Casualty...................................................19 Section 3.03. Insurance Claims and Proceeds..............................19 Section 3.04. Condemnation...............................................20 Section 3.05. Condemnation Proceedings and Awards........................20 ARTICLE 4 INCREASED COSTS AND INDEMNIFICATION Section 4.01. Increased Costs............................................21 Section 4.02. Indemnification............................................21 ARTICLE 5 DEFAULTS, REMEDIES AND RIGHTS Section 5.01. Events of Default..........................................22 Section 5.02. Remedies...................................................22 Section 5.03. Waivers by the Mortgagor...................................26 Section 5.04. Jurisdiction and Process...................................27 Section 5.05. Sales......................................................27 Section 5.06. Proceeds...................................................29 Section 5.07. Assignment of Leases.......................................30 Section 5.08. Dealing with the Mortgaged Property........................31 Section 5.09. Right of Entry.............................................31 Section 5.10. Right to Perform Obligations...............................31 Section 5.11. Concerning the Mortgagee...................................32 ARTICLE 6 SECURITY AGREEMENT AND FIXTURE FILING Section 6.01. Security Agreement.........................................33 Section 6.02. Fixture Filing.............................................33 Section 6.03 Further Assurances; General Covenants......................34 ARTICLE 7 MISCELLANEOUS Section 7.01. Release of Mortgaged Property..............................35 Section 7.02. Notices....................................................36 Section 7.03. Amendments in Writing......................................36 Section 7.04. Severability...............................................37 Section 7.05. Binding Effect.............................................37 Section 7.06. GOVERNING LAW..............................................37 ii 4 PAGE Exhibit A Description of the Land iii 5 THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FINANCING STATEMENT (this "MORTGAGE") is dated as of April 2, 2001 by NSA, LTD., a Kentucky limited partnership, having an address at c/o Century Aluminum Company, 2511 Garden Road, Building A, Suite 200, Monterey, CA 93940 (the "MORTGAGOR"), to WILMINGTON TRUST COMPANY, a Delaware banking corporation, as Trustee under the Indenture referred to herein in its capacity as Collateral Agent for itself and the holders of the Notes (hereinafter defined), having its principal address at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890 (the "MORTGAGEE"). WITNESSETH:(1) RECITALS A. Indenture. Reference is hereby made to the Indenture dated as of April 2, 2001 (the "INDENTURE"), among Century Aluminum Company (the "COMPANY"), the Guarantors (including the Mortgagor) party thereto and Wilmington Trust Company, as Trustee. Pursuant to the Indenture, the Company has issued $325,000,000 principal amount of its 11 3/4% Senior Secured First Mortgage Notes due 2008 (together with any Exchange Notes issued therefor as provided in the Indenture, the "NOTES"). B. Note Guaranties. Pursuant to the Note Guaranties contained in the Indenture (the "NOTE GUARANTIES"), each Guarantor (including the Mortgagor) has guaranteed the payment by the Company of principal of, premium, if any, and interest on, and all other amounts payable under, the Notes, the Indenture and the other Security Documents. C. Mortgage. The Lien of this Mortgage is being granted to secure payment, performance and observance of the following indebtedness, liabilities and obligations, whether now or hereafter owed or owing, hereinafter referred to collectively as the "SECURED OBLIGATIONS": (i) the prompt and complete payment of (a) all obligations (whether in existence on the date hereof or arising afterwards, absolute or contingent, direct or indirect) of the Mortgagor under its Note Guaranty, including for or in respect of principal (when due, upon acceleration, upon redemption, upon mandatory repayment or repurchase pursuant to a mandatory offer to - -------- (1) Capitalized terms are defined in, or by reference in, Section 1.01. 6 purchase, or otherwise), premium, interest, including additional interest under the Registration Rights Agreement, penalties, fees, indemnification, reimbursement and other amounts payable and liabilities with respect to such obligations, including all interest accrued or accruing after the commencement of any bankruptcy, insolvency or reorganization or similar case or proceeding at the contract rate (including any contract rate applicable upon default) specified in the Credit Documents, whether or not the claim for such interest is allowed as a claim in such case or proceeding, (b) all amounts payable by the Mortgagor hereunder (including advances made to protect the Mortgaged Property and the Liens created hereby); and (c) any amendments, restatements, renewals, extensions or modifications of any of the foregoing; and (ii) performance and observance of each other term, covenant, agreement, requirement, condition and provision to be performed or observed by the Mortgagor under the Indenture or this Mortgage. GRANTING CLAUSES NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, for the purpose of securing the due and punctual payment, performance and observance of the Secured Obligations and intending to be bound hereby, the Mortgagor does hereby MORTGAGE, GRANT, BARGAIN, SELL, CONVEY, ASSIGN, TRANSFER AND WARRANT to the Mortgagee and its successors as Collateral Agent and (to the extent covered by the UCC) does hereby GRANT AND WARRANT to the Mortgagee and its successors as Collateral Agent, a continuing security interest in all of the property and rights described in the following Granting Clauses other than the Excluded Property (all of which property and rights, other than the Excluded Property, are collectively called the "MORTGAGED PROPERTY"), to wit: GRANTING CLAUSE I. Land. All estate, right, title and interest of the Mortgagor in, to, under or derived from the lots, pieces, tracts or parcels of land located in the County of Hancock, the State of Kentucky, more particularly described in Exhibit A (the "LAND"). 2 7 GRANTING CLAUSE II. Improvements. All estate, right, title and interest of the Mortgagor in, to, under or derived from all buildings, structures, facilities and other improvements of every kind and description now or hereafter located on the Land, including pot lines, cast houses, power substations, paste plant, alumina silo, rodding shop and water treatment and pollution control facilities, and all parking areas, roads, driveways, walks, fences, walls, berms, recreation facilities, drainage facilities, lighting facilities and other site improvements, all water, sanitary and storm sewer, drainage, electricity, steam, gas, telephone and other utility equipment and facilities, all plumbing, lighting, heating, ventilating, air-conditioning, refrigerating, incinerating, compacting, fire protection and sprinkler, surveillance and security, vacuum cleaning, public address and communications equipment and systems, screens, awnings, floor coverings, partitions, elevators, escalators, motors, machinery, pipes, fittings and other items of equipment and personal property of every kind and description now or hereafter located on the Land or attached to the Improvements which by the nature of their location thereon or attachment thereto are real property under applicable law; and including all materials intended for the construction, reconstruction, repair, replacement, alteration, addition or improvement of or to such buildings, equipment, fixtures, structures and improvements, all of which materials shall be deemed to be part of the Mortgaged Property immediately upon delivery thereof on the Land and to be part of the improvements immediately upon their incorporation therein (the foregoing being collectively the "IMPROVEMENTS"). GRANTING CLAUSE III. Equipment. All estate, right, title and interest of the Mortgagor in, to, under or derived from all component parts of the Improvements, fixtures, chattels and articles of personal property owned by the Mortgagor or in which the Mortgagor has or shall acquire an interest, wherever situated, and now or hereafter located on, attached to or contained in the Land and the Improvements, whether or not attached thereto which are not real property under applicable law, including all pot lines, partitions, screens, awnings, shades, blinds, curtains, draperies, carpets, rugs, furniture and furnishings, heating, lighting, plumbing, ventilating, air conditioning, refrigerating, gas, steam, electrical, incinerating, compacting, water treatment, pollution control, and paste plants, systems, fixtures and equipment, anode bake ovens, elevators, stoves, ranges, other kitchen and laundry appliances, vacuum and other cleaning systems, call systems, switchboards, sprinkler systems and other fire prevention, alarm and extinguishing apparatus and materials, motors, machinery, pipes, conduits, dynamos, engines, compressors, generators, boilers, stokers, furnaces, pumps, trunks, ducts, appliances, equipment, utensils, tools, implements, fittings and fixtures (all of the foregoing being hereinafter collectively called the 3 8 "EQUIPMENT"; and the Land with the Improvements thereon and the Equipment therein being collectively called the "PROPERTY"). GRANTING CLAUSE IV. Appurtenant Rights. All estate, right, title and interest of the Mortgagor in, to, under or derived from all tenements, hereditaments and appurtenances now or hereafter relating to the Property; the streets, roads, sidewalks and alleys abutting the Property; all strips and gores within or adjoining the Land; all land in the bed of any body of water adjacent to the Land; all land adjoining the Land created by artificial means or by accretion; all air space and rights to use air space above the Land; all development or similar rights appurtenant to the Land; all rights of ingress and egress now or hereafter appertaining to the Property; all easements, servitudes, rights, ways, privileges and rights of way now or hereafter appertaining to the Property; and all royalties and other rights appertaining to the use and enjoyment of the Property, including alley, party walls, support, drainage, crop, timber, agricultural, horticultural, oil, gas and other mineral, water stock, riparian and other water rights. GRANTING CLAUSE V. Agreements. All estate, right, title and interest of the Mortgagor in, to, under or and derived from the Owners Agreement (other than any rights with respect to Excluded Property), the "Shared Services Agreement", "Groundwater Treatment Building Lease Agreement", and "Environmental Access and Cooperation Agreement" (as such quoted terms are defined in the Owners Agreement), all Insurance Policies (including all unearned premiums and dividends thereunder), guarantees and warranties relating to the Property and all supply and service contracts for water treatment, pollution control or for water, sanitary and storm sewer, drainage, electricity (other than the Power Contract), steam, gas, telephone and other utilities relating to the Property (the foregoing being collectively called the "AGREEMENTS"). GRANTING CLAUSE VI. Leases. All estate, right, title and interest of the Mortgagor in, to, under and derived from all Leases now or hereafter in effect, whether or not of record, for the use or occupancy of all or any part of the Property. GRANTING CLAUSE VII. Rents, Issues and Profits. All estate, right, title and interest of the Mortgagor in, to, under or derived from all rents, royalties, issues, profits, receipts, revenue, income and other benefits now or hereafter accruing with respect to the Property, 4 9 including all rents and other sums now or hereafter payable pursuant to the Leases; all other sums now or hereafter payable with respect to the use, occupancy, management, operation or control of the Property; and all other claims, rights and remedies now or hereafter belonging or accruing with respect to the Property, including fixed, additional and percentage rents, occupancy charges, security deposits, parking, maintenance, common area, tax, insurance, utility and service charges and contributions (whether collected under the Leases or otherwise), proceeds of sale of electricity, gas, heating, air-conditioning and other utilities and services (whether collected under the Leases or otherwise), and deficiency rents and liquidated damages following default or cancellation (the foregoing rents and other sums described in this Granting Clause being collectively called the "Rents"), all of which the Mortgagor hereby irrevocably directs be paid to the Mortgagee, subject to the license granted to the Mortgagor pursuant to Section 5.07(b), to be held, applied and disbursed as provided in this Mortgage. GRANTING CLAUSE VIII. Permits. All estate, right, title and interest of the Mortgagor in, to, under or derived from all licenses, authorizations, certificates, variances, consents, approvals and other permits now or hereafter appertaining to the Property (the foregoing being collectively called the "PERMITS"). GRANTING CLAUSE IX. Deposits. All estate, right, title and interest of the Mortgagor in, to, under or derived from all amounts deposited with the Mortgagee under the Credit Documents, including all Insurance Proceeds and Awards, including such proceeds and awards as are deposited in the Cash Collateral Account, and including all notes, certificates of deposit, securities and other investments relating thereto and all interest, dividends and other income thereon, proceeds thereof and rights relating thereto (the foregoing being collectively called the "DEPOSITS"). GRANTING CLAUSE X. Proceeds and Awards. All estate, right, title and interest of the Mortgagor in, to, under or derived from all proceeds of any sale, transfer, financing, refinancing or conversion into cash or liquidated claims, whether voluntary or involuntary, of any of the Mortgaged Property, including all Insurance Proceeds and Awards, and all rights, dividends and other claims of any kind whatsoever (including damage, secured, unsecured, priority and bankruptcy claims) now or hereafter relating to any of the Mortgaged Property, all of which the Mortgagor hereby irrevocably directs be paid to the Mortgagee to the extent provided hereunder or under any other Credit Document, to be held, applied and disbursed as provided in this Mortgage. 5 10 GRANTING CLAUSE XI. Further Property. All estate, right, title and interest of the Mortgagor in, to, under or derived from the Mortgaged Property hereafter acquired by the Mortgagor, and all right, title and interest of the Mortgagor in, to, under or derived from all extensions, improvements, betterments, renewals, substitutions and replacements of, and additions and appurtenances to, any of the Mortgaged Property hereafter acquired by or released to the Mortgagor or constructed or located on, or attached to, the Property, in each case, immediately upon such acquisition, release, construction, location or attachment, without any further conveyance, mortgage, assignment or other act by the Mortgagor; and all estate, right, title and interest of the Mortgagor in, to, under or derived from any other property and rights which are, by the provisions of the Credit Documents, required to be subjected to the Lien hereof; and all estate, right, title and interest of the Mortgagor in, to, under or derived from all other property and rights which are by any instrument or otherwise subjected to the Lien hereof by the Mortgagor or by anyone acting on its behalf. TO HAVE AND TO HOLD the Mortgaged Property, together with all estate, right, title and interest of the Mortgagor and anyone claiming by, through or under the Mortgagor in, to, under or derived from the Mortgaged Property and all rights and appurtenances relating thereto, unto the Mortgagee and its successors and assigns, forever, under and subject to the terms of the Indenture and this Mortgage for the benefit of the Secured Parties and for the security and enforcement of the complete and prompt payment and performance when due of all the Secured Obligations. PROVIDED ALWAYS that this Mortgage is upon the express condition that the Mortgaged Property shall be released from the Lien of this Mortgage in full in the manner and at the time provided in Section 7.01. NOTWITHSTANDING anything to the contrary set forth above, the rights of the Mortgagee hereunder are expressly limited to the right, title and interest of the Mortgagor (including its successors and assigns) in and to the Mortgaged Property and shall not impair or otherwise affect the right, title and interest of the other Co- Tenant or the Other Co-Tenant's right to any increase in the value of its Interest (as defined in the Owners Agreement) and the Mortgagee's rights hereunder, whether through foreclosure or otherwise, shall be expressly subject to the Other Co-Tenant's rights under the Owners Agreement, including under Section 2.3.2 and Articles IX and X. THE MORTGAGOR ADDITIONALLY COVENANTS AND AGREES WITH THE MORTGAGEE AS FOLLOWS: 6 11 ARTICLE 1 DEFINITIONS AND INTERPRETATION SECTION 1.01. Definitions. (a) As used herein, the following terms shall have the following meanings: "AGREEMENTS" is defined in Granting Clause V. "AWARDS" means, at any time, all awards or payments paid or payable by reason of any Condemnation, including all amounts paid or payable with respect to any Transfer in lieu or anticipation of Condemnation or any agreement with any condemning authority which has been made in settlement of in connection with any proceeding relating to a Condemnation. "CASH COLLATERAL ACCOUNT" is defined in the Pledge and Security Agreement. "CASUALTY" means any damage to, or destruction of, the Property. "COLLATERAL AGENT" is defined in the Indenture. "COMPANY" is defined in the recitals. "CREDIT AGREEMENT" is defined in the Indenture. "CREDIT DOCUMENTS" means the Indenture, the Notes, the Registration Rights Agreement, and the Security Documents. "CONDEMNATION" means any condemnation or other taking or temporary or permanent requisition of any Property, any interest therein or right appurtenant thereto, or any change of grade affecting any Property, as the result of the exercise of any right of condemnation or eminent domain. A Transfer in lieu or anticipation of Condemnation shall be deemed to be a Condemnation. "DEFAULT" is defined in the Indenture. "DEPOSITS" is defined in Granting Clause IX. "ENVIRONMENTAL LAWS" means any federal, state, local or foreign law (including common law), treaty, judicial decision, regulation, rule, judgment, order, decree, injunction, permit, or governmental restriction or requirement, or any agreement with any governmental authority or other third party, whether now or hereafter in effect, relating to human health and safety, the environment or to 7 12 pollutants, contaminants, wastes or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substances, wastes or materials. "EQUIPMENT" is defined in Granting Clause III. "EVENT OF DEFAULT" is defined in the Indenture. "EXCLUDED PROPERTY" means all "inventory", equipment constituting "mobile goods", and "accounts" as such quoted terms are defined or otherwise described in the UCC. "FIFTH POT LINE" means the fixed and movable assets comprising pot line five (5), together with the Land thereunder, owned by the Other Co-Tenant. "GUARANTOR" is defined in the Indenture. "HAZARDOUS SUBSTANCES" means any pollutant, contaminant, waste or chemical or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substance, waste or material, or any substance, waste or material having any constituent elements displaying any of the foregoing characteristics, including, without limitation, petroleum, its derivatives, by-products and other hydrocarbons, and any substance, waste or material regulated under any Environmental Law. "IMPOSITIONS" means all taxes (including real estate taxes and sales and use taxes), assessments (including all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof), water, sewer or other rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges, in each case whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereon), which at any time may be assessed, levied, confirmed or imposed on or in respect of, or be a Lien upon, (i) the Property, any other Mortgaged Property or any interest therein, (ii) any occupancy, use or possession of, or activity conducted on, the Property, (iii) the Rents from the Property or the use or occupancy thereof, or (iv) the Secured Obligations or the Security Documents, but excluding income, excess profits, franchise, capital stock, estate, inheritance, succession, gift or similar taxes of the Mortgagor, the Mortgagee or any other Secured Party, except to the extent that such taxes of the Mortgagor, the Mortgagee or any other Secured Party are imposed in whole or in part in lieu of, or as a substitute for, any taxes which are or would otherwise be Impositions. "IMPROVEMENTS" is defined in Granting Clause II. "INDENTURE" is defined in the Recitals. 8 13 "INSURANCE POLICIES" means the insurance policies and coverages required to be maintained by the Mortgagor with respect to the Property pursuant to this Mortgage. "INSURANCE PREMIUMS" means all premiums for the Insurance Policies. "INSURANCE PROCEEDS" means, at any time, all insurance proceeds or payments to which the Mortgagor may be or become entitled by reason of any Casualty under the Insurance Policies maintained by the Mortgagor pursuant to the Indenture with respect to the Property plus (i) the amounts of any deductibles under such Insurance Policies; (ii) if the Mortgagor fails to maintain any of such Insurance Policies, the amounts which would have been available with respect to such Casualty had the Mortgagor maintained such Insurance Policies; and (iii) all insurance proceeds and payments to which the Mortgagor may be or become entitled by reason of any Casualty under any other insurance policies or coverages maintained by the Mortgagor with respect to the Property. "INSURANCE REQUIREMENTS" means all provisions of the Insurance Policies, all requirements of the issuer of any of the Insurance Policies and all orders, rules, regulations and any other requirements of the National Board of Fire Underwriters (or any other body exercising similar functions) binding upon the Mortgagor or applicable to the Property, any adjoining vaults, sidewalks, parking areas or driveways or any use or condition thereof. "LAND" is defined in Granting Clause I. "LEASE" means any lease, tenancy, subtenancy, license, franchise, concession or other occupancy agreement relating to the Property, together with any guarantee of the obligations of the landlord or the tenant thereunder, or any occupancy or right to possession under any federal or state bankruptcy code in the event of the rejection of any Lease by the landlord or its trustee pursuant to said code; "LANDLORD" means the landlord, sublandlord, lessor, sublessor, franchisor or other grantor of a right of occupancy under a Lease and any guarantor of its obligations thereunder; and "TENANT" means the tenant, subtenant, lessee, sublessee, licensee, franchisee, concessionaire or other occupant under a Lease and any guarantor of its obligations thereunder. "LEGAL REQUIREMENTS" means all provisions of the Permitted Encumbrances, all provisions of the Permits and all applicable laws (including any Environmental Laws), statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions, rules, regulations, directions and requirements of, and agreements with, governmental bodies, agencies or officials, now or hereafter applicable to the Property, or any use or condition thereof. 9 14 "LIEN" is defined in the Indenture. "MATERIAL AGREEMENTS" means the Owners Agreement, "Shared Services Agreement, "Groundwater Treatment Building Lease Agreement", and "Environmental Access and Cooperation Agreement" (as such quoted terms are defined in the Owners Agreement). "MORTGAGE" is defined in the Preamble. "MORTGAGED PROPERTY" is defined in the Granting Clauses. "MORTGAGEE" is defined in the Preamble. "MORTGAGOR" is defined in the Preamble. "NATIONAL FLOOD INSURANCE PROGRAM" means the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973 (42 U.S.C. Sections 4001, et seq.) "NOTE GUARANTIES" is defined in the Recitals.. "NOTES" is defined in the Recitals. "OFFICERS' CERTIFICATE" is defined in the Indenture. "OPINION OF COUNSEL" is defined in the Indenture. "OTHER CO-TENANT" means Glencore Acquisition I LLC, as a party to the Owners Agreement, and its permitted successors and assigns under the Owners Agreement. "OWNERS AGREEMENT" means the Owners Agreement dated as of April 2, 2001, among the Mortgagor, the Other Co-Tenant and Century Aluminum of Kentucky LLC. "PERMITS" is defined in Granting Clause VIII. "PERMITTED ENCUMBRANCES" is defined in the Indenture. "PERSON" is defined in the Indenture. "PLEDGE AND SECURITY AGREEMENT" is defined in the Indenture. 10 15 "PLEDGED EQUIPMENT" is defined in Section 6.03(f). "POST-DEFAULT RATE" means the interest rate owed on any overdue payments of principal or interest on the Note as provided in each Note. "POT LINES" means the fixed and movable assets comprising pot lines one (1), two (2), three (3) and four (4), together with the Land thereunder, but excluding the right, title and interest of the Other Co-Tenant in the Fifth Pot Line unless an interest therein is hereafter acquired by the Mortgagor. "PROPERTY" is defined in Granting Clause II. "RECEIVER" is defined in Section . "REGISTRATION RIGHTS AGREEMENT" is defined in the Indenture. "RENTS" is defined in Granting Clause VII. "RESTORATION" means the restoration, repair, replacement or rebuilding of the Property after a Casualty or Condemnation and "RESTORE" means to restore, repair, replace or rebuild the Property after a Casualty or Condemnation, in each case as nearly as possible to its value and condition immediately prior to such Casualty or Condemnation. "REVISED ARTICLE 9" means revised Article 9 of the Uniform Commercial Code as set forth in the 1998 Official Text thereof; provided that, when used with respect to any jurisdiction on or after the date when revised Article 9 (with or without local changes therein) first becomes effective in such jurisdiction, "Revised Article 9" refers to Article 9 as in effect in such jurisdiction from time to time. "REVISED UCC" means (i) before the UCC Revision Date, the Uniform Commercial Code as set forth in the 1998 Official Text thereof and (ii) on and after the UCC Revision Date, the UCC. "SECURED OBLIGATIONS" is defined in the Recitals. "SECURED PARTIES" means the (i) Mortgagee, (ii) the Trustee, (iii) the Collateral Agent, and (iv) the holders from time to time of the Notes. "SECURITY DOCUMENTS" is defined in the Indenture. "TRANSFER" means, when used as a noun, any sale, conveyance, assignment, lease or other transfer and, when used as a verb, to sell, convey, assign, lease or 11 16 otherwise transfer, in each case (i) whether voluntary or involuntary, (ii) whether direct or indirect and (iii) including any agreement providing for a Transfer or granting any right or option providing for a Transfer. "TRUST INDENTURE ACT" is defined in the Indenture. "UNAVOIDABLE DELAYS" means delays due to acts of God, fire, flood, earthquake, explosion or other Casualty, inability to procure or shortage of labor, equipment, facilities, sources of energy (including electricity, steam, gas or gasoline), materials or supplies, failure of transportation, strikes, lockouts, action of labor unions, Condemnation, litigation relating to Legal Requirements, inability to obtain Permits or other causes beyond the control of the Mortgagor, provided that lack of funds shall not be deemed to be a cause beyond the control of the Mortgagor. "UCC" means the Uniform Commercial Code as in effect in the State in which the Land and Improvements are located provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non- perfection of the Lien on any Mortgaged Property is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State in which the Land and Improvements are located, UCC means the Uniform Commercial Code as in effect in such jurisdictions for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection. "UCC REVISION DATE" means the date when Revised Article 9 first becomes effective in the State in which the Land and Improvements are located; provided that, if perfection or the effect of perfection or non-perfection or the priority of any Lien on any Trust Property is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State in which the Land and Improvements are located, "UCC Revision Date" means the date when Revised Article 9 first becomes effective in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority. Such provisions often refer to the relevant date as the "applicable UCC Revision Date". (b) In this Mortgage, unless otherwise specified, references to this Mortgage, Agreements, Material Agreements, Owners Agreement, Leases, Permits, Indenture, Notes, Credit Documents, and Security Documents include all amendments, supplements, consolidations, replacements, restatements, extensions, renewals and other modifications thereof, in whole or in part. SECTION 1.02. Interpretation. In this Mortgage, unless otherwise specified, (i) singular words include the plural and plural words include the singular; (ii) words which include a number of constituent parts, things or elements, including the terms Leases, Improvements, Land, Secured Obligations, Property and Mortgaged Property, shall be construed as referring separately to each constituent part, thing or 12 17 element thereof, as well as to all of such constituent parts, things or elements as a whole; (iii) words importing any gender include the other genders; (iv) references to any Person include such Person's successors and assigns and in the case of an individual, the word "SUCCESSORS" includes such Person's heirs, devisees, legatees, executors, administrators and personal representatives; (v) references to any statute or other law include all applicable rules, regulations and orders adopted or made thereunder and all statutes or other laws amending, consolidating or replacing the statute or law referred to; (vi) the words "CONSENT", "APPROVE" and "AGREE", and derivations thereof or words of similar import, mean the prior written consent, approval or agreement of the Person in question; (vii) the words "include" and "including", and words of similar import, shall be deemed to be followed by the words "without limitation"; (viii) the words "HERETO", "HEREIN", "HEREOF" and "HEREUNDER", and words of similar import, refer to this Mortgage in its entirety; (ix) references to Articles, Sections, Schedules, Exhibits, subsections, paragraphs and clauses are to the Articles, Sections, Schedules, Exhibits, subsections, paragraphs and clauses of this Mortgage; (x) the Schedules and Exhibits to this Mortgage are incorporated herein by reference; (xi) the titles and headings of Articles, Sections, Schedules, Exhibits, subsections, paragraphs and clauses are inserted as a matter of convenience and shall not affect the construction of this Mortgage; (xii) all obligations of the Mortgagor hereunder shall be satisfied by the Mortgagor at the Mortgagor's sole cost and expense; and (xiii) all rights and powers granted to the Mortgagee hereunder shall be deemed to be coupled with an interest and be irrevocable. SECTION 1.03. Resolution of Drafting Ambiguities. The Mortgagor acknowledges that it was represented by counsel in connection with this Mortgage, that it and its counsel reviewed and participated in the preparation and negotiation of this Mortgage and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party or the Mortgagee shall not be employed in the interpretation of this Mortgage. ARTICLE 2 CERTAIN WARRANTIES AND COVENANTS OF THE MORTGAGOR SECTION 2.01. Title and Authority. (a) The Mortgagor represents and warrants that (i) the Mortgagor is the owner of (x) the Pot Lines, (y) an eighty percent (80%) interest in the Land and the Improvements thereon, the Equipment therein and all other items constituting the Mortgaged Property (other than the Pot Lines), to the extent the same are or will be "Jointly-Owned Property" (as defined in the Owners Agreement) and (z) all other items constituting the Mortgaged Property, in each case free and clear of all Liens other than the Permitted Encumbrances; (ii) the execution, delivery and performance by the Mortgagor of this 13 18 Mortgage are within the Mortgagor's power, have been duly authorized by all necessary action, require no action by or in respect of, or filing with, any governmental body, agency or official (except for the recording or filing of this Mortgage) and do not contravene, or constitute a default under, any provision of applicable law, the partnership agreement of the Mortgagor or any agreement, judgment, injunction, order, decree or other instrument binding upon the Mortgagor or relating to the Property or result in the creation or imposition of any Lien on any asset of the Mortgagor (other than the Lien of this Mortgage. (iii) this Mortgage constitutes a valid and binding agreement of the Mortgagor, enforceable against the Mortgagor in accordance with its terms, except as (x) the enforceability may be limited by bankruptcy, insolvency or similar laws now or hereafter in effect relating to or affecting creditor's rights or remedies generally and (y) the availability of equitable remedies may be limited by equitable principles of general applicability; and (iv ) the Lien of this Mortgage for the ratable benefit of the Secured Parties will constitute a valid and perfected first-priority Lien on the Mortgaged Property securing the Secured Obligations, enforceable as such against all creditors of the Mortgagor (and any Persons purporting to purchase any of the Mortgaged Property from the Mortgagor), subject only to the Owners Agreement and the other Permitted Encumbrances in existence on the date thereof. (b) The Mortgagor shall (i) cause the representations and warranties in Section 2.01(a) to be true and correct in each and every respect; and (ii) forever preserve, protect, warrant and defend (A) its estate, right, title and interest in and to the Mortgaged Property, (B) the validity, enforceability and priority of the Lien of this Mortgage on the Mortgaged Property, and (C) the right, title and interest of the Mortgagee and any purchaser at any sale of the Mortgaged Property hereunder or relating hereto, in each case against all other Liens and claims whatsoever, subject only to the Permitted Encumbrances. (c) The Mortgagor shall (i) promptly correct any material defect or error which may be discovered in this Mortgage or any financing statement or other document relating hereto; and (ii) promptly execute, acknowledge, deliver, record and re-record, register and re-register, and file and re-file this Mortgage and any financing statements or other documents as may be required by applicable law or which the Mortgagee may reasonably require from time to time (all in form and substance satisfactory to the Mortgagee) in order (A) to effectuate, complete, perfect, continue or preserve the Lien of this Mortgage as a first Lien on the Mortgaged Property, whether now owned or hereafter acquired, subject only to the Permitted Encumbrances, or (B) to effectuate, complete, perfect, continue or preserve any right, power or privilege granted or intended to be granted to the Mortgagee. SECTION 2.02. Secured Obligations. The Mortgagor shall duly and punctually pay, perform and observe the Secured Obligations. 14 19 SECTION 2.03. Impositions. The Mortgagor shall (i) subject to Section 2.06, duly and punctually pay all Impositions prior to the delinquency date thereof; (ii) subject to Section 2.06, duly and punctually file all returns and other statements required to be filed with respect to any Imposition; (iii) promptly notify the Mortgagee of the receipt by the Mortgagor of any notice of default in the payment of any Imposition or in the filing of any return or other statement relating to any Imposition and simultaneously furnish to the Mortgagee a copy of such notice of default; and (iv) upon reasonable request, promptly deliver to the Mortgagee (A) a certificate of the Mortgagor evidencing that the Mortgagor has complied with the provisions of this Section 2.03, accompanied to the extent required by copies of official receipts evidencing the payment of the Impositions, and (B) such other information and documents with respect to the matters referred to in this Section as the Mortgagee shall reasonably request. SECTION 2.04. Material Agreements and Legal and Insurance Requirements. (a) The Mortgagor represents and warrants that (i) the Property and the use and operation thereof materially comply with all Material Agreements, Legal Requirements, or Insurance Requirements; (ii) there is no default under any Material Agreement, Legal Requirement or Insurance Requirement which would have a material adverse effect on the Property; and (iii) the execution, delivery and performance of this Mortgage will not materially contravene any provision of or constitute a material default under any Material Agreement, Legal Requirement, or Insurance Requirement. (b) The Mortgagor shall (i) subject to Section 2.06, duly and punctually comply in all material respects with all Material Agreements, Legal Requirements, and Insurance Requirements; (ii) procure, maintain and, subject to Section 2.06, duly and punctually comply in all material respects with all Permits required for any construction, reconstruction, repair, alteration, addition, improvement, maintenance, management, use and operation of the Property; (iii) promptly notify the Mortgagee of the receipt by the Mortgagor of any notice of default regarding any Material Agreement, Legal Requirement, or Insurance Requirement or any reasonably likely or actual termination of any Permit or Insurance Policy and furnish to the Mortgagee a copy of such notice of default or termination; (iv) promptly after obtaining knowledge thereof notify the Mortgagee of any condition which, with or without the giving of notice or the passage of time or both, would constitute a default regarding any Material Agreement, Legal Requirement, or Insurance Requirement or a termination of any Permit or Insurance Policy and the action being taken to remedy such condition; (v) upon request, promptly furnish to the Mortgagee a copy of any Permit obtained by the Mortgagor with respect to the Property after the date hereof; and (vi) upon request, promptly deliver to the Mortgagee (A) a certificate of the Mortgagor evidencing that the Mortgagor has complied with the provisions of this Section, and (B) such other information and documents with respect to the matters referred to in this Section as the Mortgagee shall reasonably request. 15 20 (c) In furtherance of Section 4.19 of the Indenture, the Mortgagor shall not terminate the Owners Agreement or amend, modify or supplement the Owners Agreement (or consent or approve any action thereunder) in any manner which might or would have the result of materially impairing the Lien of this Mortgage or the practical realization of the benefits intended to be provided hereby. SECTION 2.05. Status and Care of the Property. (a) The Mortgagor represents and warrants that (i) the Property is served by all necessary water treatment and pollution control facilities and all necessary water, sanitary and storm sewer, drainage, electric, steam, gas, telephone and other utility facilities which facilities have capacities which are generally sufficient to serve the current and anticipated future use and occupancy of the Property as presently constructed; (ii) the Property has legal access to all streets or roads necessary for the operation of the Property, which have been fully completed and properly dedicated, accepted or otherwise legally constructed as a public street or road (including, as appropriate, access over properly-granted, perpetual, private rights of way or easements) sufficient to serve the current and anticipated future use and operation of the Property as presently constructed; and (iii) either the Property is not located in an area designated as "flood prone" (as defined under the regulations adopted under the National Flood Insurance Program or, to the extent the Property is located (in whole or part) in an area designated as "flood prone", the Mortgagor shall maintain in full force and effect flood insurance under the National Flood Insurance Program, to the extent and in the amounts required by applicable law. (b) The Mortgagor (i) shall not cause or permit the Property to be misused, wasted, disfigured or damaged in any material manner or (except, subject to the provisions of this Section, for reasonable wear and tear) to deteriorate in any material manner; (ii) shall operate and maintain the Property, or cause the same to be operated and maintained, in good order, repair and condition; (iii) shall promptly make, or cause to be made, all repairs, replacements, renewals, restorations, alterations, additions and improvements of and to the Property, whether interior or exterior, structural or nonstructural, foreseen or unforeseen, or necessary or appropriate to keep the Property in good order, repair and condition, all of which repairs, replacements, renewals and restorations shall be equal in quality to or better than the Property as of the date hereof; (iv) shall do or cause others to do all shoring of the Property, including the foundations and walls thereof, and to take all other actions necessary or appropriate for the preservation and safety thereof by reason of or in connection with any excavation or other construction operation on the Property, whether or not the Mortgagor shall be required by any Legal Requirement to take such action or be liable for failure to do so; (v) shall not initiate or affirmatively support any change in the applicable zoning adversely affecting the Property, seek any variance (or any change in any variance) under the zoning adversely affecting the Property, execute or file any subdivision or other plat or map adversely affecting the 16 21 Property or consent to any of the foregoing; (vi) shall, promptly after receiving notice or obtaining knowledge of any proposed or threatened change in the zoning adversely affecting the Property which would result in the current use of such Property being a non-conforming use, notify the Mortgagee thereof and diligently contest the same by any action or proceeding deemed reasonably appropriate by the Mortgagor or reasonably requested by the Mortgagee; and (vii) upon request, shall promptly deliver to the Mortgagee (A) a certificate of the Mortgagor evidencing that the Mortgagor has complied with the provisions of this Section and (B) such other information and documents with respect to the matters referred to in this Section as the Mortgagee shall reasonably request. SECTION 2.06. Permitted Contests. The Mortgagor may contest, by appropriate proceedings conducted in good faith and with due diligence, any Legal Requirement, any Insurance Requirement, any Imposition or Lien therefor on the Mortgaged Property or any interest therein, any Lien of any laborer, mechanic, materialman, supplier or vendor on the Mortgaged Property or any interest therein, or any alleged default under a Material Agreement, provided (i) if the matter being contested affects or relates to a material portion of the Mortgaged Property, prior notice of the contest is given to the Mortgagee, (ii) no material Mortgaged Property is in danger of being sold, forfeited or lost while such proceedings are pending; (iii) the Mortgagee and the other Secured Parties are not in danger of any criminal or material civil penalty or any other liability for failure to comply therewith and no material Mortgaged Property is subject to the imposition of any Lien as a result of such failure which is not properly contested pursuant to this Section 2.06; (iv) in the case of any Insurance Requirement, no Insurance Policy or coverage is in danger of being forfeited or lost while such proceedings are pending; and (v) in the case of (A) any Lien of a laborer, mechanic, materialman, supplier or vendor, or (B) any Imposition or Lien therefor, such proceedings suspend the foreclosure of such Lien or any other collection thereof from the Mortgaged Property and all interests therein. Upon request, the Mortgagor shall promptly deliver to the Mortgagee (x) a certificate of the Mortgagor describing in detail satisfactory to the Mortgagee the contests pending as of the date thereof and evidencing that the Mortgagor has complied with the provisions of this Section with respect thereto and (y) such other information and documents with respect to the contests conducted pursuant to this Section as the Mortgagee shall reasonably request. SECTION 2.07. Other Instruments. (a) The Mortgagor shall execute, acknowledge and deliver, from time to time, such further instruments as Mortgagee may reasonably require to accomplish the purposes of this Mortgage. (b) The Mortgagor, immediately upon the execution and delivery of this Mortgage and thereafter from time to time, shall cause this Mortgage, any mortgage supplemental hereto and each instrument of further assurance to be filed, registered or recorded and refiled, re-registered or re-recorded in such manner and in such 17 22 places as may be required by any present or future law in order to publish notice, and perfect the lien, of this Mortgage upon the Mortgaged Property. (c) The Mortgagor shall pay all filing, registration and recording fees, all refiling, re-registration and re-recording fees and all expenses incident to the execution and acknowledgment of this Mortgage, any mortgage supplemental hereto and any instrument of further assurance and all federal, state, county and municipal stamp taxes and other taxes, duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of the Indenture, the Notes, this Mortgage, the other Security Documents, any mortgage supplemental hereto or any instruments of further assurance. SECTION 2.08. Liens. The Mortgagor shall not create or permit to be created or to remain, and shall, subject to Section 2.06, immediately discharge or cause to be discharged, any Lien on the Mortgaged Property, in each case (i) whether voluntarily or involuntarily created, and (ii) whether or not subordinated hereto, except Permitted Encumbrances and the Lien of this Mortgage. The provisions of this Section 2.08 shall apply to each and every Lien (other than Permitted Encumbrances) on the Mortgaged Property, regardless of whether or not a consent to, or waiver of a right to consent to, any other Lien thereon has been previously obtained in accordance with the terms of the Credit Documents. SECTION 2.09. Transfer. The Mortgagor shall not Transfer, or suffer any Transfer of, the Mortgaged Property or any part thereof or interest therein, except as permitted by Section 11.02 of the Indenture or otherwise permitted by the Indenture. The provisions of this Section 2.09 shall apply to each and every Transfer of the Mortgaged Property or any interest therein, regardless of whether or not a consent to, or waiver of a right to consent to, any other Transfer thereof has been previously obtained in accordance with the terms of the Credit Documents. ARTICLE 3 INSURANCE, CASUALTY AND CONDEMNATION SECTION 3.01. Insurance. (a) The Mortgagor shall maintain in full force and effect insurance policies with respect to the Property as required by Section 4.05 of the Indenture. The physical damage insurance maintained with respect to the Property shall (i) bear the New York standard non-contributory mortgage endorsement (or equivalent thereto) in favor of the Mortgagee and (ii) provide that all property losses incurred against shall be adjusted by the Mortgagor, subject to the Mortgagee's rights pursuant to Section 3.03. The public liability insurance maintained with respect to the Property shall name the Mortgagee and the other Secured Parties as additional insureds. All insurance maintained by the Mortgagor 18 23 with respect to the Property shall provide that no cancellation or material change thereof shall be effective until at least thirty (30) days after receipt by the Mortgagee of written notice thereof; and all losses shall be payable notwithstanding any foreclosure or other action or proceeding taken pursuant to this Mortgage. (b) The Mortgagor shall furnish to the Mortgagee from time to time not later than fifteen (15) days prior to the expiration date of each policy required to be maintained by the Mortgagor hereunder, an insurance certificate or certificates executed by the insurer or its authorized agent with respect to the new or extended policy. If the Mortgagor fails to maintain the Insurance Policies required to be maintained under this Section, the Mortgagee shall have the right, but not the obligation, to obtain such Insurance Policies or pay the premiums therefor. If the Mortgagee obtains such Insurance Policies or pays the premium therefor, upon demand, the Mortgagor shall reimburse the Mortgagee for its expenses in connection therewith, together with interest thereon at the Post-Default Rate. (c) The Mortgagor may effect such coverage under subsection (a) of this Section under blanket insurance policies covering the other properties of the Company, provided that (i) any such blanket insurance policy shall specify therein, or the insurer under such policy shall certify to the Mortgagee, (A) the maximum amount of the total insurance afforded by the blanket policy allocated to the Property; and (B) any sublimits in such blanket policy applicable to the Property, which sublimits shall not be less than the amounts required pursuant to this Section; (ii) any such blanket insurance policy shall comply in all respects with the other provisions of this Section; and (iii) the protection afforded under any such blanket insurance policy shall be no less than that which would have been afforded under a separate policy relating only to the policy. (d) The Mortgagor shall not maintain additional or separate insurance concurrent in form or contributing in the event of loss with the insurance required under this Section, unless the Mortgagee and the other Secured Parties are included in such policies as loss payees or additional insureds. SECTION 3.02. Casualty. (a) The Mortgagor represents and warrants that, as of the date hereof, there is no Casualty materially affecting the Property. (b) In the event of any Casualty, the Mortgagor shall (i) promptly give notice thereof to the Mortgagee in the form of an Officers' Certificate, describing in detail reasonably satisfactory to the Mortgagee the nature and extent of such Casualty, the work required to Restore the Property affected thereby and the Mortgagor's best estimate of the cost of such Restoration, itemized in detail reasonably satisfactory to the Mortgagee; and (ii) immediately take such action as may be reasonably necessary or appropriate to preserve the undamaged portion of such Property and to protect against personal injury or property damage. In the event 19 24 of any Casualty, Mortgagor shall promptly commence and diligently pursue to completion, or cause to be commenced and diligently pursued to completion, the Restoration of such Property, subject to Unavoidable Delays, whether or not the Insurance Proceeds with respect to such Casualty available to the Mortgagor to pay the cost of Restoration are sufficient, provided that pursuant to Section 11.03 of the Indenture and subject to Section 3.03 below, the Mortgagee shall make available to Mortgagor any Insurance Proceeds held by the Mortgagee. SECTION 3.03. Insurance Claims and Proceeds. In the event of any Casualty, (i) the Mortgagor shall promptly make proof of loss under the applicable Insurance Policies and diligently pursue to conclusion its claim for the Insurance Proceeds payable thereunder and any suit, action or other proceeding necessary or appropriate to obtain payment of such Insurance Proceeds; (ii) if an Event of Default is continuing, the Mortgagor shall have no right to settle, and shall not settle, any such claim or proceeding without the consent of the Mortgagee, which consent shall not be unreasonably withheld or delayed; and (iii) upon receipt of Insurance Proceeds aggregating $2,500,000 or more, the Mortgagor shall promptly pay the Insurance Proceeds with respect to any Casualty to the Mortgagee for deposit in the Cash Collateral Account (except as provided in Section 11.03 of the Indenture) to be held, applied and disbursed in accordance with Sections 11.02 and 11.03 of the Indenture. SECTION 3.04. Condemnation. (a) The Mortgagor represents and warrants that, as of the date hereof, (i) there is no Condemnation affecting any Property, (ii) there are no negotiations or proceedings which might result in such a Condemnation, and (iii) to the knowledge of the Mortgagor, no such Condemnation is proposed or threatened. (b) In the event of any material Condemnation or the commencement of any negotiation or proceeding which might result in a material Condemnation, or in the event of any proposed or threatened material Condemnation, the Mortgagor shall promptly after receiving notice or obtaining knowledge thereof give notice thereof to the Mortgagee in the form of an Officers' Certificate, describing in detail reasonably satisfactory to the Mortgagee the nature and extent of such Condemnation, negotiation or proceeding, the action which the Mortgagor intends to take with respect thereto, the work required to Restore the Property affected by such Condemnation and the Mortgagor's best estimate of the cost of such Restoration. In the event of any such Condemnation, whether or not the Awards with respect to such Condemnation available to the Mortgagor to pay the cost of Restoration are sufficient for that purpose, the Mortgagor shall promptly commence and diligently pursue to completion the Restoration of the Property affected by such Condemnation, subject to Unavoidable Delays, provided that, pursuant to Section 11.03 of the Indenture and subject to Section 3.05 below, the Mortgagee shall make available to Mortgagor any Awards held by the Mortgagee. 20 25 SECTION 3.05. Condemnation Proceedings and Awards. In the event of any Condemnation or the commencement of any negotiation or proceeding which might result in a Condemnation, or in the event of any proposed or threatened Condemnation, (i) the Mortgagor shall, promptly after receiving notice or obtaining knowledge thereof, do all things deemed necessary or appropriate by the Mortgagor or reasonably requested by the Mortgagee to preserve the Mortgagor's interest in such Property and promptly make claim for Awards payable with respect thereto and diligently pursue to conclusion such claim for such Awards and any suit, action or other proceeding necessary or appropriate to obtain payment thereof; (ii) if an Event of Default is continuing, the Mortgagor shall have no right to settle, and shall not settle, any such claim, negotiation or proceeding without the consent of the Mortgagee, which consent shall not be unreasonably withheld or delayed; and (iii) upon receipt of Awards aggregating $2,500,000 or more, the Mortgagor, shall promptly pay the Awards with respect to such Condemnation to the Mortgagee for deposit in the Cash Collateral Account (except as provided in Section 11.03 of the Indenture) to be held, applied and disbursed in accordance with Sections 11.02 and 11.03 of the Indenture. ARTICLE 4 INCREASED COSTS AND INDEMNIFICATION SECTION 4.01. Increased Costs. In the event of the enactment after the date hereof of any applicable law deducting from the value of the Property for the purpose of taxation any Lien thereon or changing in any way the applicable law for the taxation of mortgages, deeds of trust or other Liens or obligations secured thereby, or the manner of collection of such taxes, so as to affect this Mortgage, the Secured Obligations, the Mortgagee or any other Secured Party, upon demand by the Mortgagee, to the extent permitted under applicable law, the Mortgagor shall pay or reimburse the Mortgagee or such Secured Party, for all taxes, assessments or other charges which the Mortgagee or such Secured Party is obligated to pay as a result thereof. SECTION 4.02. Indemnification. The Mortgagor shall indemnify each of the Mortgagee and the other Secured Parties (collectively, the "INDEMNITEES") against, and hold each Indemnitee harmless from, any and all losses, claims, liabilities and related expenses, including the reasonable and duly documented fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (a) the Mortgagee's exercise pursuant to the terms of this Mortgage of any of its rights and remedies hereunder upon default, or failure to perform as required hereunder, of the Mortgagor; (b) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about the Mortgaged Property or any part thereof or on 21 26 the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, street or ways; (c) any failure on the part of the Mortgagor to perform or comply with any of the terms of this Mortgage; (d) the performance of any labor or services or the furnishing of any materials or other property in respect of the Mortgaged Property or any part thereof; or (e) any other conduct or misconduct of the Mortgagor, any lessee of any of the Mortgaged Property, or any of their respective agents, contractors, subcontractors, servants, employees, licensees or invitees; provided, however, that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and unappealable judgment to have resulted, except as otherwise required under the Trust Indenture Act, from the gross negligence or willful misconduct of such Indemnitee. Any amount payable under this Section 4.02 will be deemed a demand obligation and will bear interest at the Post-Default Rate from the date of such demand through the date paid. The obligations of the Mortgagor under this Section, in respect of periods prior to the release of this Mortgage, shall survive the release of this Mortgage. ARTICLE 5 DEFAULTS, REMEDIES AND RIGHTS SECTION 5.01. Events of Default. (a) Any Event of Default under the Indenture shall constitute an Event of Default hereunder. (b) All notice and cure periods provided in the Indenture and the other Credit Documents shall run concurrently with any notice or cure periods provided under applicable law. SECTION 5.02. Remedies. (a) Subject to Section 6.02 of the Indenture, if an Event of Default is continuing, the Mortgagee is hereby authorized and empowered, at its option, and without affecting the lien hereby created or the priority of said lien or any right of the Mortgagee hereunder, to declare, without further notice, all Secured Obligations to be immediately due and payable, whether or not such Event of Default is thereafter remedied by Mortgagor. Upon such acceleration, all Secured Obligations shall bear interest thereon at the Post-Default Rate, and the Mortgagee, subject to the terms and conditions of the Owners Agreement, may immediately proceed to foreclose this Mortgage and/or exercise any right, power or remedy provided by any of the Credit Documents, including the following remedies and rights, subject to mandatory provisions of applicable law, whether or not the maturity of the Secured Obligations has been accelerated, to wit: (i) to institute a proceeding or proceedings, by advertisement, judicial process or otherwise as provided under applicable law, for the 22 27 complete or partial foreclosure of this Mortgage or the complete or partial sale of the Mortgaged Property under the power of sale hereunder or under any applicable provision of law; or (ii) to sell the Mortgaged Property, and all estate, right, title, interest, claim and demand of the Mortgagor therein and thereto, and all rights of redemption thereof, at one or more sales, as an entirety or in parcels, with such elements of real or personal property, at such time and place and upon such terms as the Mortgagee may deem expedient or as may be required under applicable law, and in the event of a sale hereunder or under any applicable provision of law of less than all of the Mortgaged Property, this Mortgage shall continue as a Lien on the remaining Mortgaged Property; or (iii) to institute a suit, action or proceeding for the specific performance of any of the provisions of the Security Documents; or (iv) to apply for the appointment of a receiver, supervisor, trustee, liquidator, conservator or other custodian (a "RECEIVER") of the Mortgaged Property, to be appointed, to the fullest extent permitted by law, as a matter of right and without regard to, or the necessity to disprove, the adequacy of the security for the Secured Obligations or the solvency of the Company, the Mortgagor or any other Guarantor, and the Mortgagor hereby, to the full extent permitted by applicable law, irrevocably waives such necessity and consents to such appointment, said appointee to be vested with the fullest powers permitted under applicable law, including to the extent permitted under applicable law those under clause (v) of this subsection 5.02(a); or (v) to enter upon the Property, by the Mortgagee or a Receiver (as the case may be as the Person exercising the rights under this clause), and, to the extent permitted by law, exclude the Mortgagor and its managers, employees, contractors, agents and other representatives therefrom in accordance with applicable law, without liability for trespass, damages or otherwise, and take possession of all other Mortgaged Property and all books, records and accounts of the Mortgagor relating thereto, and upon demand the Mortgagor shall surrender possession of the Property, the other Mortgaged Property and such books, records and accounts to the Person exercising the rights under this clause after the occurrence of any Event of Default; and having and holding the same, the Person exercising the rights under this clause may use, operate, manage, preserve, control and otherwise deal therewith and conduct the business thereof, either personally or by its managers, employees, contractors, agents or other representatives, without interference from the Mortgagor or its managers, employees, contractors, agents and other representatives; and, upon each such entry and from time to time thereafter, at the expense of the Mortgagor and the Mortgaged Property, 23 28 without interference by the Mortgagor or its managers, employees, contractors, agents and other representatives, the Person exercising the rights under this clause may, as such Person deems expedient, (A) insure or reinsure the Property, (B) make all necessary or proper repairs, renewals, replacements, alterations, additions, betterments and improvements to the Property and (C) in such Person's own name or, at the option of such Person, in the Mortgagor's name, exercise all rights, powers and privileges of the Mortgagor with respect to the Mortgaged Property including the right to enter into Leases with respect to the Property, including Leases extending beyond the time of possession by the Person exercising the rights under this clause; and the Person exercising the rights under this clause shall not be liable to account for any action taken hereunder, other than for Rents actually received by such Person, and shall not be liable for any loss sustained by the Mortgagor resulting from any failure to let the Property or from any other act or omission of such Person, except to the extent such loss is caused, unless otherwise required under the Trust Indenture Act, by such Person's own willful misconduct or gross negligence; in exercising its rights under this Section 5.02(a)(v), the Mortgagee acknowledges that the agent under the Credit Agreement and its agents and representatives, upon notice to the Mortgagee, may enter upon the Property to inspect, remove or take possession of inventory securing the obligations under the Credit Agreement and may conduct a public or private sale of such inventory at the Property provided any such entry or other activities shall not damage or diminish the value of the Mortgaged Property or interfere with the operation of the same; or (vi) with or, to the fullest extent permitted by law, without entry upon the Property, in the name of the Mortgagee or a Receiver (as required by law and as the case may be as the Person exercising the rights under this clause) or, at such Person's option, in the name of the Mortgagor, to collect, receive, sue for and recover all Rents and proceeds of or derived from the Mortgaged Property, and after deducting therefrom all costs, expenses and liabilities of every character reasonably incurred by the Person exercising the rights under this clause in collecting the same and in using, operating, managing, preserving and controlling the Mortgaged Property and otherwise in exercising the rights under clause (v) of this subsection 5.02(a) or any other rights hereunder, including all amounts necessary to pay the Impositions, the Rents, Insurance Premiums and other costs, expenses and liabilities relating to the Property, as well as compensation for the services of such Person and its managers, employees, contractors, agents or other representatives, to apply the remainder as provided in Section 5.06; or (vii) to take any action with respect to any Mortgaged Property permitted under the UCC; or 24 29 (viii) to take any other action, or pursue any other remedy or right, as the Mortgagee may have under applicable law, and the Mortgagor does hereby grant the same to the Mortgagee. (b) (i) No remedy or right hereunder or under any other Credit Document shall be exclusive of any other remedy or right, but each remedy or right hereunder or under any other Credit Document shall be in addition to, and not in limitation of, any other remedy or right hereunder, under any other Credit Document or now or hereafter existing at law or in equity under applicable law. (ii) Every remedy or right hereunder, under any other Credit Document or under applicable law may be exercised concurrently or independently and whenever and as often as deemed appropriate by the Mortgagee to the extent permitted by applicable law. (c) (i) No failure to exercise or delay in exercising any remedy or right hereunder, under any other Credit Document or under applicable law shall be construed as a waiver of any Default or other occurrence hereunder or under any other Credit Document. (ii) No waiver of, failure to exercise or delay in exercising any remedy or right hereunder, under any other Credit Document or under applicable law upon any Default or other occurrence hereunder or under any other Credit Document shall be construed as a waiver of, or otherwise limit the exercise of, such remedy or right upon any other or subsequent Default or other occurrence hereunder or under any other Credit Document. (iii) No single or partial exercise of any remedy or right hereunder, under any other Credit Document or under applicable law upon any Default or other occurrence hereunder or under any other Credit Document shall preclude or otherwise limit the exercise of any other remedy or right hereunder, under any other Credit Document or under applicable law upon such Default or occurrence or upon any other or subsequent Default or other occurrence hereunder or under any other Credit Document. (iv) The acceptance by the Mortgagee or any Secured Party of any payment less than the amount of the Secured Obligation in question shall be deemed to be an acceptance on account only and shall not be construed as a waiver of any Default hereunder or under any other Credit Document with respect thereto. 25 30 (v) The acceptance by the Mortgagee or any Secured Party of any payment of, or on account of, any Secured Obligation shall not be deemed to be a waiver of any Default or other occurrence hereunder or under any other Credit Document with respect to any other Secured Obligation. (d) In the event that the Mortgagee has proceeded to enforce any remedy or right hereunder or with respect hereto by foreclosure, sale, entry or otherwise, it may compromise, discontinue or abandon such proceeding for any reason without notice to the Mortgagor or any other Person; and, in the event that any such proceeding shall be discontinued, abandoned or determined adversely for any reason, the Mortgagor and the Mortgagee shall retain and be restored to their former positions and rights hereunder with respect to the Mortgaged Property, subject to the Lien hereof except to the extent any such adverse determination specifically provides to the contrary. (e) For the purpose of carrying out any provisions of Section 5.02(a)(v), 5.02(a)(vi), 5.05, 5.07, or 5.10 or any other provision hereunder authorizing the Mortgagee or any other Person to perform any action on behalf of the Mortgagor, the Mortgagor hereby irrevocably appoints the Mortgagee or a Receiver appointed pursuant to Section 5.02(a)(iv) or such other Person (as the case may be as the Person appointed under this subsection) as the attorney-in-fact of the Mortgagor (with a power to substitute any other Person in its place as such attorney-in-fact) to act in the name of the Mortgagor or, at the option of the Person appointed to act under this subsection, in such Person's own name, to take the action authorized under Section 5.02(a)(v), 502.(a)(vi), 5.05, 5.07, or 5.10 or such other provision, and to execute, acknowledge and deliver any document in connection therewith or to take any other action incidental thereto, as the Person appointed to act under this subsection shall deem appropriate in its discretion; and the Mortgagor hereby irrevocably authorizes and directs any other Person to act on behalf of the foregoing appointment and upon a certificate of the Person appointed to act under this subsection that such Person is authorized to act under this subsection. (f) The Mortgagee shall give the Mortgagor at least ten days' prior written notice of the time and place of any public sale of personal property separately from the real property, or the time after which any such private sale or other intended disposition thereof will be made. The Mortgagee and the Mortgagor agree that such notice constitutes "reasonable notification" within the meaning of UCC Section 9- 504(3). After the UCC Revision Date, any such notice shall contain the information specified in Revised UCC Section 9-613, be authenticated (as defined in the Revised UCC) and be sent to the parties required to be notified pursuant to Revised UCC Section 9-611(c); provided that, if the Mortgagee fails to comply with this sentence in any respect, its liability for such failure shall be limited to the liability (if any) imposed on it as a matter of law under the UCC. 26 31 SECTION 5.03. Waivers by the Mortgagor. To the extent permitted under applicable law, the Mortgagor shall not assert, and hereby irrevocably waives, any right or defense the Mortgagor may have under any statute or rule of law or equity now or hereafter in effect relating to (i) appraisement, valuation, homestead, exemption, extension, moratorium, stay, redemption, marshalling of the Mortgaged Property or the other assets of the Mortgagor, sale of the Mortgaged Property in any order or notice of deficiency or intention to accelerate any Secured Obligation; (ii) impairment of any right of subrogation or reimbursement; (iii) any requirement that at any time any action must be taken against any other Person, any portion of the Mortgaged Property or any other asset of the Mortgagor or any other Person; (iv) any provision barring or limiting the right of the Mortgagee to sell any Mortgaged Property after any other sale of any other Mortgaged Property or any other action against the Mortgagor or any other Person; (v) any provision barring or limiting the recovery by the Mortgagee of a deficiency after any sale of the Mortgaged Property; or (vi) any other provision of applicable law (including any provision relating to decedents' estates) which might defeat, limit or adversely affect any right or remedy of the Mortgagee or the holders of the Secured Obligations under or with respect to this Mortgage or the other Security Documents. SECTION 5.04. Jurisdiction and Process. (a) To the extent permitted under applicable law, in any suit, action or proceeding arising out of or relating to this Mortgage or any other Security Document as it relates to any Mortgaged Property, the Mortgagor irrevocably consents to the jurisdiction of any state or federal court sitting in the state in which the Property is located and irrevocably waives any defense or objection which it may now or hereafter have to the jurisdiction of such court over the venue of such court for or the convenience of such court as the forum for any such suit, action or proceeding. (b) Nothing in this Section shall affect the right of the Mortgagee to bring any suit, action or proceeding arising out of or relating to this Mortgage or any other Security Document in any court having jurisdiction under the provisions of any other Security Document or applicable law or to serve any process, notice of sale or other notice in any manner permitted by any other Security Document or applicable law. SECTION 5.05. Sales. Except as otherwise provided herein, to the fullest extent permitted under applicable law, at the election of the Mortgagee, the following provisions shall apply to any sale of the Mortgaged Property hereunder, whether made pursuant to the power of sale hereunder, any judicial proceeding or any judgment or decree of foreclosure or sale or otherwise: (a) Any sale may be conducted by the Mortgagee or by an agent appointed to act on behalf of the Mortgagee and the appointment need not be recorded. The power of sale hereunder or with respect hereto shall not be exhausted by any sale as to any part or parcel of the Mortgaged Property 27 32 which is not sold, unless and until the Secured Obligations shall have been paid in full, and shall not be exhausted or impaired by any sale which is not completed or is defective. Any sale may be as a whole or in part or parcels and, to the fullest extent permitted by law, the Mortgagor hereby waives its right to direct the order in which the Mortgaged Property or any part or parcel thereof is sold. (b) To the extent permitted by law, any sale may be postponed or adjourned by public announcement at the time and place appointed for such sale or for such postponed or adjourned sale without further notice. (c) After each sale, the Person conducting such sale shall execute and deliver to the purchaser or purchasers at such sale a good and sufficient instrument or instruments granting, conveying, assigning and transferring all right, title and interest of the Mortgagor in and to the Mortgaged Property sold and shall receive the proceeds of such sale and apply the same as provided in Section 5.06. The Mortgagor hereby irrevocably appoints the Person conducting such sale as the attorney-in-fact of the Mortgagor (with full power to substitute any other Person in its place as such attorney-in-fact) to act in the name of the Mortgagor or, at the option of the Person conducting such sale, in such Person's own name, to make without warranty by such Person any conveyance, assignment, transfer or delivery of the Mortgaged Property sold, and to execute, acknowledge and deliver any instrument of conveyance, assignment, transfer or delivery or other document in connection therewith or to take any other action incidental thereto, as the Person conducting such sale shall deem appropriate in its discretion; and the Mortgagor hereby irrevocably authorizes and directs any other Person to act upon the foregoing appointment and a certificate of the Person conducting such sale that such Person is authorized to act hereunder. Nevertheless, upon the request of such attorney-in-fact the Mortgagor shall promptly execute, acknowledge and deliver any documentation which such attorney-in-fact may reasonably require for the purpose of ratifying, confirming or effectuating the powers granted hereby or any such conveyance, assignment, transfer or delivery by such attorney-in-fact. Any statement of fact or other recital made in any instrument referred to in this Section 5.05(c) given by the Person conducting any sale as to the nonpayment of any Secured Obligation, the occurrence of any Event of Default, the amount of the Secured Obligations due and payable, the notice of the time, place and terms of sale and of the Mortgaged Property to be sold having been duly given, the refusal, failure or inability of the Mortgagee to act, the appointment of any substitute or successor Mortgagee, any other act or thing having been duly done by Mortgagor, the Mortgagee or any other such Person, shall be taken as conclusive and binding, absent manifest error, against all other Persons as evidence of the truth of the facts so stated or recited. 28 33 (d) The receipt of the Person conducting any sale for the purchase money paid at any such sale shall be sufficient discharge therefor to any purchaser of any Mortgaged Property sold, and no such purchaser, or its representatives, grantees or assigns, after paying such purchase price and receiving such receipt, shall be bound to see to the application of such purchase price or any part thereof upon or for any trust or purpose of this Mortgage or, in any manner whatsoever, be answerable for any loss, misapplication or nonapplication of any such purchase money or be bound to inquire as to the authorization, necessity, expediency or regularity of such sale. (e) Subject to mandatory provisions of applicable law, any sale shall operate to divest all of the estate, right, title, interest, claim and demand whatsoever, whether at law or in equity, of the Mortgagor in and to the Mortgaged Property sold, and shall be a perpetual bar both at law and in equity against the Mortgagor and any and all Persons claiming such Mortgaged Property or any interest therein by, through or under the Mortgagor. (f) At any sale, the Mortgagee may bid for and acquire the Mortgaged Property sold and, in lieu of paying cash therefor, may make settlement for the purchase price by causing the Secured Parties to credit against the Secured Obligations, including the expenses of the sale and the cost of any enforcement proceeding hereunder, the amount of the bid made therefor to the extent necessary to satisfy such bid. (g) In the event that the Mortgagor or any Person claiming by, through or under the Mortgagor shall transfer or fail to surrender possession of the Mortgaged Property after any sale thereof, then, to the extent permitted by law, the Mortgagor or such Person shall be deemed a tenant at sufferance of the purchaser at such sale, subject to eviction by means of summary process for possession of land, or subject to any other right or remedy available hereunder or under applicable law. (h) Upon any sale, it shall not be necessary for the Person conducting such sale to have any Mortgaged Property being sold present or constructively in its possession. (i) In the event that a foreclosure hereunder shall be commenced by the Mortgagee, the Mortgagee may at any time before the sale abandon the sale, and may institute suit for the collection of the Secured Obligations or for the foreclosure of 29 34 this Mortgage; or in the event that the Mortgagee should institute a suit for collection of the Secured Obligations or the foreclosure of this Mortgage, the Mortgagee may at any time before the entry of final judgment in said suit dismiss the same and sell the Mortgaged Property in accordance with the provisions of this Mortgage. SECTION 5.06. Proceeds. Except as otherwise provided herein and in the Indenture or required under applicable law, the proceeds of any sale of the Mortgaged Property hereunder, whether made pursuant to the power of sale hereunder, any judicial proceeding or any judgment or decree of foreclosure or sale or otherwise shall be applied and paid as follows: (a) First: to the payment of all expenses of such sale, including compensation the Mortgagee or such other Person conducting such sale, the cost of title searches, foreclosure certificates, title commitments or abstracts, and attorneys' fees and expenses incurred by such Person, together with interest on any such expenses paid by such Person at the Post-Default Rate from the date paid by such Person through the date repaid to such Person; (b) Second: to the payment of the expenses and other amounts payable under Sections 4.02 and 5.10; and (c) Third: to the Mortgagee for deposit in the Cash Collateral Account, to be held, applied and disbursed in accordance with Section 6.10 of the Indenture. SECTION 5.07. Assignment of Leases. (a) Subject to Section 5.07(d) below, the assignments of the Leases and the Rents under Granting Clauses VI and VII are and shall be present, absolute and irrevocable assignments by the Mortgagor to the Mortgagee and, subject to the license to the Mortgagor under Section 5.07(b), the Mortgagee or a Receiver appointed pursuant to Section 5.02(a)(iv) (as the case may be as the Person exercising the rights under this Section) shall have the absolute, immediate and continuing right to collect and receive all Rents now or hereafter, including during any period of redemption, accruing with respect to the Property. At the request of the Mortgagee or such Receiver, the Mortgagor shall promptly execute, acknowledge, deliver, record, register and file any additional general assignment of the Leases or specific assignment of any Lease which the Mortgagee or such Receiver may reasonably require from time to time (all in form and substance satisfactory to the Mortgagee or such Receiver) to effectuate, complete, perfect, continue or preserve the assignments of the Leases and the Rents under Granting Clauses VI and VII. (b) As long as no Event of Default is continuing, the Mortgagor shall have the right under a license granted hereby, subject to Section 5.05(c), to collect all Rents upon, but not prior to thirty (30) days before, the due date thereof. 30 35 (c) If an Event of Default is continuing, the Mortgagee or a Receiver appointed pursuant to Section 5.02(a)(iv) (as the case may be as the Person exercising the rights under this Section) shall have the right to terminate the license granted under Section 5.07(b) by notice to the Mortgagor and to exercise the rights and remedies provided under Section 5.07(a), under Sections 5.02(a)(v) and (vi) or under applicable law. If an Event of Default is continuing, upon demand by the Person exercising the rights under this Section, the Mortgagor shall promptly pay to such Person all Security Deposits under the Leases and all Rents allocable to any period after the occurrence of such Event of Default. Subject to Sections 5.02(a)(v) and (vi) and any applicable requirement of law, any Rents received hereunder by the Person exercising the rights under this Section shall be promptly paid to the Mortgagee, and any Rents received hereunder by the Mortgagee shall be deposited in the Cash Collateral Account, to be held, applied and disbursed as provided in the Pledge and Security Agreement and the Indenture, provided that, subject to Sections 5.02(a)(v) and (vi) and any applicable requirement of law, any Security Deposits actually received by such Person shall be promptly paid to the Mortgagee, and any Security Deposits actually received by the Mortgagee shall be held, applied and disbursed as provided in the applicable Leases and applicable law. (d) Nothing herein shall be construed to be an assumption by the Person exercising the rights under this Section, or to otherwise make such Person liable for the performance, of any of the obligations of the Mortgagor under the Leases, provided that such Person shall be accountable as provided in Section 5.07(c) for any Rents or Security Deposits actually received by such Person. SECTION 5.08. Dealing with the Mortgaged Property. Subject to Section 7.01, the Mortgagee shall have the right to release any portion of the Mortgaged Property to or at the request of the Mortgagor, for such consideration as the Mortgagee may require without, as to the remainder of the Mortgaged Property, in any way impairing or affecting the Lien or priority of this Mortgage, or improving the position of any subordinate lienholder with respect thereto, except to the extent that the Secured Obligations shall have been reduced by any actual monetary consideration received for such release and applied to the Secured Obligations, and may accept by assignment, pledge or otherwise any other property in place thereof as the Mortgagee may require without being accountable therefor to any other lienholder. SECTION 5.09. Right of Entry. The Mortgagee and the representatives of such Mortgagee shall have the right, (i) without prior notice if an Event of Default is continuing or such entry is necessary in the reasonable opinion of the Mortgagee to preserve the Mortgagee's rights under this Mortgage or with respect to the Mortgaged Property, or (ii) after reasonable notice and subject to reasonable rules and procedures for safety and security established by the Mortgagor if no Event of Default is continuing, to enter upon the Property at all reasonable times, as often as 31 36 such Person may reasonably require, to inspect the Mortgaged Property or, subject to the provisions hereof, to exercise any right, power or remedy of such Person hereunder, provided that any Person so entering the Property shall not unreasonably interfere with the ordinary conduct of Mortgagor's business, and provided further that no such entry on the Property for the purpose of performing obligations under Section 5.10 or any other purpose shall be construed to be (x) possession of the Property by such Person or to constitute such Person as a trustee or mortgagee in possession, unless such Person exercises its right to take possession of the Property under Section 5.02(a)(v), or (y) a cure of any Default or waiver of any Default or Secured Obligation. SECTION 5.10. Right to Perform Obligations. If the Mortgagor fails to pay or perform any obligation of the Mortgagor hereunder or under any other Security Document, the Mortgagee and the representatives of the Mortgagee shall have the right, (i) without notice if an Event of Default is continuing or such payment or performance is necessary in the reasonable opinion of the Mortgagee to preserve the Mortgagee's rights under this Mortgage or with respect to the Mortgaged Property, or (ii) after reasonable notice if no Event of Default is continuing, to pay or perform such obligation, provided that no such payment or performance shall be construed to be a cure of any Default or waiver of any Default or Secured Obligation. If, pursuant to the terms of this Mortgage, the Mortgagee shall make any payment on behalf of the Mortgagor, the amount so paid shall be reimbursable by the Mortgagor immediately upon such payment together with interest accrued thereon at the Post- Default Rate to the date of reimbursement. The obligation of the Mortgagor to reimburse the Mortgagee for such payment, as well as interest accrued thereon, shall be part of the Secured Obligations and shall be secured by this Mortgage. SECTION 5.11. Concerning the Mortgagee. (a) The provisions of Article 7 of the Indenture with respect to the Trustee shall inure to the benefit of the Mortgagee in respect of this Mortgage as if incorporated herein and shall be binding upon the parties to the Indenture and the holders of the Notes in such respect. In furtherance and not in derogation of the rights, privileges and immunities of the Mortgagee therein set forth: (i) The Mortgagee is authorized to take all such action as is provided to be taken by it as Mortgagee hereunder and all other action reasonably incidental thereto. As to any matters not expressly provided for herein (including the timing and methods of realization upon the Mortgaged Property), the Mortgagee shall act or refrain from acting in accordance with written instructions from the Trustee or the holders of a majority in principal amount of the Notes or, in the absence of such instructions, in accordance with its discretion. 32 37 (ii) The Mortgagee shall not be responsible for the existence, genuineness or value of any of the Mortgaged Property or for the validity, perfection, priority or enforceability of the Lien of this Mortgage on any of the Mortgaged Property, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder. The Mortgagee shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Mortgage by the Mortgagor. (b) At any time or times, in order to comply with any legal requirement in any jurisdiction, the Mortgagee may appoint another bank or trust company or one or more other Persons, either to act as co-agent or co-agents, jointly with the Mortgagee, or to act, in accordance with the provisions of this Mortgage, as separate agent or agents on behalf of the Secured Parties with such power and authority as may be necessary for the effectual operation of the provisions hereof and may be specified in the instrument of appointment (which may, in the discretion of the Mortgagee, include provisions for the protection of such co-agent or separate agent similar to the provisions of Section 5.11). ARTICLE 6 SECURITY AGREEMENT AND FIXTURE FILING SECTION 6.01. Security Agreement. To the extent that the Mortgaged Property includes personal property or items of personal property which are or are to become fixtures under applicable law, this Mortgage shall also be construed as a Security Agreement under the UCC; and, if an Event of Default is continuing, the Mortgagee shall be entitled with respect to such personal property to all remedies available under the UCC and all other remedies available under applicable law. Without limiting the foregoing, if an Event of Default is continuing, any personal property may, at Mortgagee's option, (i) be sold hereunder, (ii) be sold pursuant to the UCC or (iii) be dealt with by the Mortgagee in any other manner permitted under applicable law. The Mortgagee may require the Mortgagor to assemble the personal property and make it available to the Mortgagee at a place to be designated by the Mortgagee. If an Event of Default is continuing, the Mortgagee shall be the attorney-in-fact of the Mortgagor with respect to any and all matters pertaining to the personal property with full power and authority to give instructions with respect to the collection and remittance of payments, to endorse checks, to enforce the rights and remedies of the Mortgagor and to execute on behalf of the Mortgagor and in Mortgagor's name any instruction, agreement or other writing required therefor. The Mortgagor acknowledges and agrees that a disposition of the personal property in accordance with the Mortgagee's rights and remedies in respect to the Property as heretofore provided is a commercially reasonable disposition thereof. 33 38 SECTION 6.02. Fixture Filing. To the extent that the Mortgaged Property includes items of personal property which are or are to become fixtures under applicable law, and to the extent permitted under applicable law, the filing of this Mortgage in the real estate records of the county in which such Mortgaged Property is located shall also operate from the time of filing as a fixture filing with respect to such Mortgaged Property, and the following information is applicable for the purpose of such fixture filing, to wit: (a) Name and Address of the debtor: NSA Ltd. c/o Century Aluminum Company 2511 Garden Road Building A, Suite 200 Monterey, CA 93940 (b) Name and Address of the secured party: Wilmington Trust Company, as Collateral Agent Rodney Square North 1100 North Market Street Wilmington, Delaware 19890 (c) This document covers goods or items of personal property which are or are to become fixtures upon the Land and Improvements. (d) The names of the record owners of the Land and Improvements on which such fixtures are or are to be located are NSA, Ltd and Glencore Acquisition Company. SECTION 6.03. Further Assurances; General Covenants The Mortgagor covenants as follows: (a) The Mortgagor will execute and file such financing or continuation statements, or amendments thereto, and such other instruments or notices as may be necessary, as are required by applicable law, or as the Mortgagee may reasonably request, in order to perfect and preserve the Lien granted or purported to be granted by this Mortgage. (b) To the extent permitted by applicable law, the Mortgagor authorizes the Mortgagee to execute and file such financing statements or continuation statements without the Mortgagor's signature appearing thereon. The Mortgagee will provide a copy of any such financing statement to the Mortgagor upon its filing. The Mortgagor agrees that a carbon, photographic, photostatic or other reproduction of this Mortgage or of a financing statement is sufficient as a financing statement. The Mortgagor constitutes the Mortgagee its attorney-in-fact to execute and file all filings required or so requested for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed; and such power, being coupled with an interest, shall 34 39 be irrevocable until all the Liens terminate pursuant to Section 7.01. The Mortgagor will pay the costs of, or incidental to any recording or filing of any financing or continuation statements or other documents recorded or filed pursuant hereto. (c) The Mortgagor will not (i) change its name or structure (including its jurisdiction of organization), (ii) change its location (determined as provided in Revised UCC Section 9-307) or (iii) become bound, as provided in Revised UCC Section 9-203(d) or otherwise, by a security agreement entered into by another Person, unless it shall have given the Mortgagee prior notice thereof and delivered an Opinion of Counsel with respect thereto in accordance with Section 6.03(e). (d) Before the applicable UCC Revision Date, the Mortgagor will not change the location of its chief executive office or chief place of business or the locations where it keeps or holds any Mortgaged Property, unless it shall have given the Mortgagee prior notice thereof and delivered an Opinion of Counsel with respect thereto in accordance with Section 6.03(e). It will not in any event change the location of any Mortgaged Property owned by it if such change would cause the Lien on such Mortgaged Property to lapse or cease to be perfected. (e) At least 30 days before it takes any action contemplated by Section 6.03(c) or 6.03(d), the Mortgagor will, at its expense, cause to be delivered to the Mortgagee an Opinion of Counsel, in form and substance satisfactory to the Mortgagee, to the effect that (i) all financing statements and amendments or supplements thereto, continuation statements and other documents required to be filed or recorded in order to perfect and protect the Liens against all creditors of and purchasers from the Mortgagor after it takes such action (except any continuation statements specified in such Opinion of Counsel that are to be filed more than six months after the date thereof) have been filed or recorded in each office necessary for such purpose, (ii) all fees and taxes, if any, payable in connection with such filings or recordations have been paid in full and (iii) such action will not materially adversely impair the perfection or priority of the Lien on any Mortgaged Property after it takes such action or the accuracy of the Mortgagor's representations and warranties herein relating to such Mortgaged Property. (f) The Mortgagor covenants that it will (i) on or prior to the date hereof, in the case of Equipment now owned by it that is part of the Mortgaged Property and which constitute goods in which a security interest is perfected by a notation on the certificate of title or similar evidence of the ownership of such goods ("PLEDGED EQUIPMENT"), and (ii) within 10 days after it acquires any other Pledged Equipment, deliver to the Mortgagee any and all certificates of title, applications for title or similar evidence of ownership of such Equipment and will cause the Mortgagee to be named as lienholder on any such certificate of title or other evidence of ownership. The Mortgagor will promptly inform the Mortgagee of any additions to or deletions from its Pledged Equipment and will not permit any of its Pledged Equipment to 35 40 become a fixture to real estate or an accession to any personal property that is not, in either case, included in the Mortgaged Property. ARTICLE 7 MISCELLANEOUS SECTION 7.01. Release of Mortgaged Property. (a) This Mortgage shall cease, terminate and thereafter be of no further force or effect (except as provided in Section 4.02 hereof) in the event all of the Secured Obligations shall have been paid in full and the Mortgagor shall have performed and observed all of the covenants, obligations and conditions to be performed by the Mortgagor pursuant to the Credit Documents. Upon such termination and at the Mortgagor's request and expense and upon compliance with the provisions of Section 11.06 of the Indenture, the Mortgagee shall execute and deliver to the Mortgagor an instrument, in proper form for recording, without warranty, releasing the Lien of this Mortgage and reconveying the Mortgaged Property. (b) Any termination or release required or permitted under this Section 7.01 or under the Indenture shall be at the Mortgagor's request and expense and either in the statutory form or in a form reasonably satisfactory to the Mortgagee. SECTION 7.02. Notices. Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: (i) if to the Mortgagor: NSA, Ltd. c/o Century Aluminum Company 2511 Garden Road Building A Suite 200 Monterey, CA 93940 Attn: Chief Financial Officer 36 41 (ii) if to the Mortgagee: Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, Delaware 19890 Attn: Corporate Trust Department Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. SECTION 7.03. Amendments in Writing. No provision of this Mortgage shall be modified, waived or terminated, and no consent to any departure by the Mortgagor from any provision of this Mortgage shall be effective, unless the same shall be by an instrument in writing, signed by the Mortgagor and the Mortgagee in compliance with all the terms and provisions of the Indenture. Any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. SECTION 7.04. Severability. All rights, powers and remedies provided in this Mortgage may be exercised only to the extent that the exercise thereof does not violate applicable law, and all the provisions of this Mortgage are intended to be subject to all mandatory provisions of applicable law and to be limited to the extent necessary so that they will not render this Mortgage illegal, invalid, unenforceable or not entitled to be recorded, registered or filed under applicable law. If any provision of this Mortgage or the application thereof to any Person or circumstance shall, to any extent, be illegal, invalid or unenforceable, or cause this Mortgage not to be entitled to be recorded, registered or filed, the remaining provisions of this Mortgage or the application of such provision to other Persons or circumstances shall not be affected thereby, and each provision of this Mortgage shall be valid and be enforced to the fullest extent permitted under applicable law. SECTION 7.05. Binding Effect. (a) The provisions of this Mortgage shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns; and all references herein to the "Mortgagor" and the "Mortgagee" shall include the respective successors and assigns of such parties. (b) To the fullest extent permitted under applicable law, the provisions of this Mortgage binding upon the Mortgagor shall be deemed to be covenants which run with the land. 37 42 (c) Nothing in this Section shall be construed to permit the Mortgagor to Transfer or grant a Lien upon the Mortgaged Property contrary to the provisions of the Indenture. SECTION 7.06. GOVERNING LAW. THIS MORTGAGE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE LAND AND IMPROVEMENTS ARE LOCATED, EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE WHERE THE LAND AND IMPROVEMENTS ARE LOCATED ARE GOVERNED BY THE LAWS OF SUCH JURISDICTION. 38 43 IN WITNESS WHEREOF, the Mortgagor has executed and delivered this Mortgage as of the day first set forth above. Mortgagor: NSA, Ltd., a Kentucky limited partnership By: Metalsco, Ltd., a Georgia [corporate seal] corporation, its general partner By:______________________________ Name: Title: 39 44 STATE OF NEW YORK ) COUNTY OF NEW YORK ) SS: ) The foregoing instrument was acknowledged before me this 30th day of March, 2001, by _________________ as ___________ of Metalsco, Ltd., a Georgia corporation, as general partner of NSA, LTD. a Kentucky limited partnership, on behalf of the corporation and the limited partnership. My commission expires: [SEAL] __________________________ Notary Public This instrument was prepared by the attorney described below in consultation with counsel in Kentucky. _________________________________ James P. McIntyre 45 EXHIBIT A DESCRIPTION OF THE LAND A-2 EX-4.5 9 y47973ex4-5.txt DEED OF TRUST 1 Exhibit 4.5 Record and Return to: Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10017 Attention: James P. McIntyre, Esq. =============================================================================== DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT, FINANCING STATEMENT AND FIXTURE FILING dated as of April 2, 2001 from CENTURY ALUMINUM OF WEST VIRGINIA, INC. the Grantor, to CHARLES B. DOLLISON, the Trustee for the benefit of WILMINGTON TRUST COMPANY, as Collateral Agent, the Beneficiary Property: Jackson County, West Virginia =============================================================================== THIS INSTRUMENT IS FOR COMMERCIAL PURPOSES AND CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS AND SECURES, INTER ALIA, OBLIGATIONS WHICH PROVIDE FOR AN INCREASING RATE OF INTEREST. 2 TABLE OF CONTENTS ----------------------
PAGE ---- PREAMBLE.................................................................................... 1 RECITALS.................................................................................... 1 GRANTING CLAUSES............................................................................ 2 GRANTING CLAUSE I. Land .............................................................. 2 GRANTING CLAUSE II. Improvements ...................................................... 3 GRANTING CLAUSE III. Equipment ......................................................... 3 GRANTING CLAUSE IV. Appurtenant Rights ................................................ 4 GRANTING CLAUSE V. Agreements ........................................................ 4 GRANTING CLAUSE VI. Leases ............................................................ 4 GRANTING CLAUSE VII. Rents, Issues and Profits ......................................... 4 GRANTING CLAUSE VIII. Permits ........................................................... 5 GRANTING CLAUSE IX. Deposits .......................................................... 5 GRANTING CLAUSE X. Proceeds and Awards ............................................... 5 GRANTING CLAUSE XI. Further Property .................................................. 6 ARTICLE 1 DEFINITIONS AND INTERPRETATION SECTION 1.01. Definitions............................................................. 6 SECTION 1.02. Interpretation.......................................................... 12 SECTION 1.03. Resolution of Drafting Ambiguities...................................... 13 ARTICLE 2 CERTAIN WARRANTIES AND COVENANTS OF THE GRANTOR SECTION 2.01. Title and Authority..................................................... 13 SECTION 2.02. Secured Obligations..................................................... 14 SECTION 2.03. Impositions............................................................. 14 SECTION 2.04. Legal and Insurance Requirements........................................ 14 SECTION 2.05. Status and Care of the Property......................................... 15 SECTION 2.06. Permitted Contests...................................................... 16 SECTION 2.07. Other Instruments....................................................... 17 SECTION 2.08. Liens................................................................... 17 SECTION 2.09. Transfer................................................................ 17 ARTICLE 3 INSURANCE, CASUALTY AND CONDEMNATION
i 3 SECTION 3.01. Insurance............................................................... 18 SECTION 3.02. Casualty................................................................ 19 SECTION 3.03. Insurance Claims and Proceeds........................................... 19 SECTION 3.04. Condemnation............................................................ 19 SECTION 3.05. Condemnation Proceedings and Awards..................................... 20 ARTICLE 4 INCREASED COSTS AND INDEMNIFICATION SECTION 4.01. Increased Costs......................................................... 20 SECTION 4.02. Indemnification......................................................... 21 ARTICLE 5 DEFAULTS, REMEDIES AND RIGHTS SECTION 5.01. Events of Default....................................................... 21 SECTION 5.02. Remedies................................................................ 22 SECTION 5.03. Waivers by the Grantor.................................................. 26 SECTION 5.04. Jurisdiction and Process................................................ 26 SECTION 5.05. Sales................................................................... 27 SECTION 5.06. Proceeds................................................................ 29 SECTION 5.07. Assignment of Leases.................................................... 30 SECTION 5.08. Dealing with the Trust Property......................................... 31 SECTION 5.09. Right of Entry.......................................................... 31 SECTION 5.10. Right to Perform Obligations............................................ 31 SECTION 5.11. Concerning the Beneficiary.............................................. 31 ARTICLE 6 SECURITY AGREEMENT AND FIXTURE FILING SECTION 6.01. Security Agreement...................................................... 32 SECTION 6.02. Fixture Filing.......................................................... 33 SECTION 6.03 Further Assurances; General Covenants.................................. 33 ARTICLE 7 MISCELLANEOUS SECTION 7.01. Trustee................................................................. 35 SECTION 7.02. Release of Trust Property............................................... 37 SECTION 7.03. Notices................................................................. 37 Exhibit A Description of the Land Schedule I Initial Holders of Secured Obligations
ii 4 THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT, FINANCING STATEMENT AND FIXTURE FILING (this "DEED OF TRUST") is dated as of April 2, 2001 by CENTURY ALUMINUM OF WEST VIRGINIA, INC., a Delaware corporation, having an address at P.O. Box 98, Ravenswood, West Virginia 26164 (the "GRANTOR"), to CHARLES B. DOLLISON, as trustee, whose residence is in Kanawha County, West Virginia (the "TRUSTEE") for the benefit of WILMINGTON TRUST COMPANY, a Delaware banking corporation, as Collateral Agent for itself and the holders of the Notes (hereinafter defined), having its principal address at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890 (the "BENEFICIARY"). WITNESSETH:(1) RECITALS A. Indenture. Reference is hereby made to the Indenture dated as of April 2, 2001 (the "INDENTURE"), among Century Aluminum Company (the "COMPANY"), the Guarantors (including the Grantor) party thereto and Wilmington Trust Company, as Indenture Trustee. Pursuant to the Indenture, the Company has issued $325,000,000 principal amount of its 11 3/4% Senior Secured First Mortgage Notes due 2008 (together with any Exchange Notes issued therefor as provided in the Indenture, the "NOTES"). B. Note Guaranties. Pursuant to the Note Guaranties contained in the Indenture (the "NOTE GUARANTIES"), each Guarantor (including the Grantor) has guaranteed the payment by the Company of principal of, premium, if any, and interest on, and all other amounts payable under, the Notes and the Indenture. C. Deed of Trust. The Lien of this Deed of Trust is being granted to secure payment, performance and observance of the following indebtedness, liabilities and obligations, whether now or hereafter owed or owing, hereinafter referred to collectively as the "SECURED OBLIGATIONS": (i) the prompt and complete payment of (a) all obligations (whether in existence on the date hereof or arising afterwards, absolute or contingent, direct or indirect) of the Grantor under its Note Guaranty, including for or in respect of principal (when due, upon acceleration, upon redemption, upon mandatory repayment or repurchase pursuant to a mandatory offer to - -------- (1) Capitalized terms are defined in, or by reference in, Section 1.01. 5 purchase, or otherwise), premium, interest, including additional interest under the Registration Rights Agreement, penalties, fees, indemnification, reimbursement and other amounts payable and liabilities with respect to such obligations, including all interest accrued or accruing after the commencement of any bankruptcy, insolvency or reorganization or similar case or proceeding at the contract rate (including any contract rate applicable upon default) specified in the Credit Documents, whether or not the claim for such interest is allowed as a claim in such case or proceeding; (b) all amounts payable by the Grantor hereunder (including advances made to protect the Trust Property and the Liens created hereby); and (c) any amendments, restatements, renewals, extensions or modifications of any of the foregoing; and (ii) performance and observance of each other term, covenant, agreement, requirement, condition and provision to be performed or observed by the Grantor under the Indenture or this Deed of Trust. GRANTING CLAUSES NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, for the purpose of securing the due and punctual payment, performance and observance of the Secured Obligations and intending to be bound hereby, the Grantor does hereby GRANT (WITH DEED OF TRUST COVENANTS), BARGAIN, SELL, CONVEY, ASSIGN, TRANSFER AND WARRANT to the Trustee, and its successors as trustee, IN TRUST for the benefit of the Beneficiary upon the provisions of this Deed of Trust, with power of sale and right of entry as hereinafter provided, and (to the extent covered by the UCC) does hereby GRANT AND WARRANT to the Beneficiary, and its successors as Collateral Agent, a continuing security interest in, all of the property and rights described in the following Granting Clauses other than the Excluded Property (all of which property and rights, other than the Excluded Property, are collectively called the "TRUST PROPERTY"), to wit: GRANTING CLAUSE I. Land. All estate, right, title and interest of the Mortgagor in, to, under or derived from the lots, pieces, tracts or parcels of land located in the County of Jackson, the State of West Virginia, more particularly described in Exhibit A (the "LAND"). 2 6 GRANTING CLAUSE II. Improvements. All estate, right, title and interest of the Grantor in, to, under or derived from all buildings, structures, facilities and other improvements of every kind and description now or hereafter located on the Land, including pot lines, cast houses, power substations, paste plant, alumina silo, rodding shop and water treatment and pollution control facilities, and all parking areas, roads, driveways, walks, fences, walls, berms, recreation facilities, drainage facilities, lighting facilities and other site improvements, all water, sanitary and storm sewer, drainage, electricity, steam, gas, telephone and other utility equipment and facilities, all plumbing, lighting, heating, ventilating, air-conditioning, refrigerating, incinerating, compacting, fire protection and sprinkler, surveillance and security, vacuum cleaning, public address and communications equipment and systems, screens, awnings, floor coverings, partitions, elevators, escalators, motors, machinery, pipes, fittings and other items of equipment and personal property of every kind and description now or hereafter located on the Land or attached to the Improvements which by the nature of their location thereon or attachment thereto are real property under applicable law; and including all materials intended for the construction, reconstruction, repair, replacement, alteration, addition or improvement of or to such buildings, equipment, fixtures, structures and improvements, all of which materials shall be deemed to be part of the Trust Property immediately upon delivery thereof on the Land and to be part of the improvements immediately upon their incorporation therein (the foregoing being collectively the "IMPROVEMENTS"). GRANTING CLAUSE III. Equipment. All estate, right, title and interest of the Grantor in, to, under or derived from all component parts of the Improvements, fixtures, chattels and articles of personal property owned by the Grantor or in which the Grantor has or shall acquire an interest, wherever situated, and now or hereafter located on, attached to or contained in the Land and the Improvements, whether or not attached thereto which are not real property under applicable law, including all pot lines, partitions, screens, awnings, shades, blinds, curtains, draperies, carpets, rugs, furniture and furnishings, heating, lighting, plumbing, ventilating, air conditioning, refrigerating, gas, steam, electrical, incinerating, compacting, water treatment, pollution control, and paste plants, systems, fixtures and equipment, anode bake ovens, elevators, stoves, ranges, other kitchen and laundry appliances, vacuum and other cleaning systems, call systems, switchboards, sprinkler systems and other fire prevention, alarm and extinguishing apparatus and materials, motors, machinery, pipes, conduits, dynamos, engines, compressors, generators, boilers, stokers, furnaces, pumps, trunks, ducts, appliances, equipment, utensils, tools, implements, fittings and fixtures (all of the foregoing being hereinafter collectively called the "EQUIPMENT"; and the Land 3 7 with the Improvements thereon and the Equipment therein being collectively called the "PROPERTY"). GRANTING CLAUSE IV. Appurtenant Rights. All estate, right, title and interest of the Grantor in, to, under or derived from all tenements, hereditaments and appurtenances now or hereafter relating to the Property; the streets, roads, sidewalks and alleys abutting the Property; all strips and gores within or adjoining the Land; all land in the bed of any body of water adjacent to the Land; all land adjoining the Land created by artificial means or by accretion; all air space and rights to use air space above the Land; all development or similar rights appurtenant to the Land; all rights of ingress and egress now or hereafter appertaining to the Property; all easements, servitudes, rights, ways, privileges and rights of way now or hereafter appertaining to the Property; and all royalties and other rights appertaining to the use and enjoyment of the Property, including alley, party walls, support, drainage, crop, timber, agricultural, horticultural, oil, gas and other mineral, water stock, riparian and other water rights. GRANTING CLAUSE V. Agreements. All estate, right, title and interest of the Mortgagor in, to, under or and derived from all Insurance Policies (including all unearned premiums and dividends thereunder), guarantees and warranties relating to the Property and all supply and service contracts for water treatment, pollution control or for water, sanitary and storm sewer, drainage, electricity, steam, gas, telephone and other utilities relating to the Property (the foregoing being collectively called the "AGREEMENTS"). GRANTING CLAUSE VI. Leases. All estate, right, title and interest of the Grantor in, to, under and derived from all Leases now or hereafter in effect, whether or not of record, for the use or occupancy of all or any part of the Property. GRANTING CLAUSE VII. Rents, Issues and Profits. All estate, right, title and interest of the Grantor in, to, under or derived from all rents, royalties, issues, profits, receipts, revenue, income and other benefits now or hereafter accruing with respect to the Property, including all rents and other sums now or hereafter payable pursuant to the Leases; all other sums now or hereafter payable with respect to the use, occupancy, management, operation or control of the Property; and all other claims, rights and remedies now or hereafter belonging or accruing with respect to the Property, including fixed, 4 8 additional and percentage rents, occupancy charges, security deposits, parking, maintenance, common area, tax, insurance, utility and service charges and contributions (whether collected under the Leases or otherwise), proceeds of sale of electricity, gas, heating, air-conditioning and other utilities and services (whether collected under the Leases or otherwise), and deficiency rents and liquidated damages following default or cancellation (the foregoing rents and other sums described in this Granting Clause being collectively called the "RENTS"), all of which the Grantor hereby irrevocably directs be paid to the Beneficiary, subject to the license granted to the Grantor pursuant to Section 5.07(b), to be held, applied and disbursed as provided in this Deed of Trust. GRANTING CLAUSE VIII. Permits. All estate, right, title and interest of the Grantor in, to, under or derived from all licenses, authorizations, certificates, variances, consents, approvals and other permits now or hereafter appertaining to the Property (the foregoing being collectively called the "PERMITS"). GRANTING CLAUSE IX. Deposits. All estate, right, title and interest of the Grantor in, to, under or derived from all amounts deposited with the Beneficiary under the Credit Documents, including all Insurance Proceeds and Awards, including such proceeds and awards as are deposited in the Cash Collateral Account, and including all notes, certificates of deposit, securities and other investments relating thereto and all interest, dividends and other income thereon, proceeds thereof and rights relating thereto (the foregoing being collectively called the "DEPOSITS"). GRANTING CLAUSE X. Proceeds and Awards. All estate, right, title and interest of the Grantor in, to, under or derived from all proceeds of any sale, transfer, financing, refinancing or conversion into cash or liquidated claims, whether voluntary or involuntary, of any of the Trust Property, including all Insurance Proceeds and Awards, and all rights, dividends and other claims of any kind whatsoever (including damage, secured, unsecured, priority and bankruptcy claims) now or hereafter relating to any of the Trust Property, all of which the Grantor hereby irrevocably directs be paid to the Beneficiary to the extent provided hereunder or under any other Credit Document, to be held, applied and disbursed as provided in this Deed of Trust. 5 9 GRANTING CLAUSE XI. Further Property. All estate, right, title and interest of the Grantor in, to, under or derived from the Trust Property hereafter acquired by the Grantor, and all right, title and interest of the Grantor in, to, under or derived from all extensions, improvements, betterments, renewals, substitutions and replacements of, and additions and appurtenances to, any of the Trust Property hereafter acquired by or released to the Grantor or constructed or located on, or attached to, the Property, in each case, immediately upon such acquisition, release, construction, location or attachment, without any further conveyance, mortgage, assignment or other act by the Grantor; and all estate, right, title and interest of the Grantor in, to, under or derived from any other property and rights which are, by the provisions of the Credit Documents, required to be subjected to the Lien hereof; and all estate, right, title and interest of the Grantor in, to, under or derived from all other property and rights which are by any instrument or otherwise subjected to the Lien hereof by the Grantor or by anyone acting on its behalf. TO HAVE AND TO HOLD the Trust Property, together with all estate, right, title and interest of the Grantor and anyone claiming by, through or under the Grantor in, to, under or derived from the Trust Property and all rights and appurtenances relating thereto, unto the Trustee and its successors and assigns, as Trustee hereunder, forever, under and subject to the terms of the Indenture and this Deed of Trust for the benefit of the Beneficiary, forever. PROVIDED ALWAYS that this Deed of Trust is upon the express condition that the Trust Property shall be released from the Lien of this Deed of Trust in full in the manner and at the time provided in Section 7.02. THE GRANTOR ADDITIONALLY COVENANTS AND AGREES WITH THE BENEFICIARY AS FOLLOWS: ARTICLE 1 DEFINITIONS AND INTERPRETATION SECTION 1.01. Definitions. (a) As used herein, the following terms shall have the following meanings: "AGREEMENTS" is defined in Granting Clause V. "AWARDS" means, at any time, all awards or payments paid or payable by reason of any Condemnation, including all amounts paid or payable with respect to 6 10 any Transfer in lieu or anticipation of Condemnation or any agreement with any condemning authority which has been made in settlement of in connection with any proceeding relating to a Condemnation. "BENEFICIARY" is defined in the Preamble. "CASH COLLATERAL ACCOUNT" is defined in the Pledge and Security Agreement. "CASUALTY" means any damage to, or destruction of, the Property. "COLLATERAL AGENT" is defined in the Indenture. "COMPANY" is defined in the recitals. "CREDIT AGREEMENT" is defined in the Indenture. "CREDIT DOCUMENTS"means the Indenture, the Notes, the Registration Rights Agreement, and the Security Documents. "CONDEMNATION" means any condemnation or other taking or temporary or permanent requisition of any Property, any interest therein or right appurtenant thereto, or any change of grade affecting any Property, as the result of the exercise of any right of condemnation or eminent domain. A Transfer in lieu or anticipation of Condemnation shall be deemed to be a Condemnation. "DEED OF TRUST" is defined in the Preamble. "DEFAULT" is defined in the Indenture. "DEPOSITS" is defined in Granting Clause IX. "ENVIRONMENTAL LAWS" means any federal, state, local or foreign law (including common law), treaty, judicial decision, regulation, rule, judgment, order, decree, injunction, permit, or governmental restriction or requirement, or any agreement with any governmental authority or other third party, whether now or hereafter in effect, relating to human health and safety, the environment or to pollutants, contaminants, wastes or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substances, wastes or materials. "EQUIPMENT" is defined in Granting Clause III. "EVENT OF DEFAULT" is defined in the Indenture. 7 11 "EXCLUDED PROPERTY" means all "inventory", equipment constituting "mobile goods", and "accounts" as such quoted terms are defined or otherwise described in the UCC. "GRANTOR" is defined in the Preamble. "GUARANTOR" is defined in the Indenture. "HAZARDOUS SUBSTANCES" means any pollutant, contaminant, waste or chemical or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substance, waste or material, or any substance, waste or material having any constituent elements displaying any of the foregoing characteristics, including, without limitation, petroleum, its derivatives, by-products and other hydrocarbons, and any substance, waste or material regulated under any Environmental Law. "IMPOSITIONS" means all taxes (including real estate taxes and sales and use taxes), assessments (including all assessments for public improvements or benefits, whether or not commenced or completed prior to the date hereof), water, sewer or other rents, rates and charges, excises, levies, license fees, permit fees, inspection fees and other authorization fees and other charges, in each case whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interest and penalties thereon), which at any time may be assessed, levied, confirmed or imposed on or in respect of, or be a Lien upon, (i) the Property, any other Trust Property or any interest therein, (ii) any occupancy, use or possession of, or activity conducted on, the Property, (iii) the Rents from the Property or the use or occupancy thereof, or (iv) the Secured Obligations or the Security Documents, but excluding income, excess profits, franchise, capital stock, estate, inheritance, succession, gift or similar taxes of the Grantor, the Beneficiary or any other Secured Party, except to the extent that such taxes of the Grantor, the Beneficiary or any other Secured Party are imposed in whole or in part in lieu of, or as a substitute for, any taxes which are or would otherwise be Impositions. "IMPROVEMENTS" is defined in Granting Clause II. "INDENTURE" is defined in the Recitals. "INDENTURE TRUSTEE" means the "Trustee" as defined in the Indenture. "INSURANCE POLICIES" means the insurance policies and coverages required to be maintained by the Mortgagor with respect to the Property pursuant to this Deed of Trust. "INSURANCE PREMIUMS" means all premiums for the Insurance Policies. 8 12 "INSURANCE PROCEEDS" means, at any time, all insurance proceeds or payments to which the Grantor may be or become entitled by reason of any Casualty under the Insurance Policies maintained by the Grantor pursuant to the Indenture with respect to the Property plus (i) the amounts of any deductibles under such Insurance Policies; (ii) if the Grantor fails to maintain any of such Insurance Policies, the amounts which would have been available with respect to such Casualty had the Grantor maintained such Insurance Policies; and (iii) all insurance proceeds and payments to which the Grantor may be or become entitled by reason of any Casualty under any other insurance policies or coverages maintained by the Grantor with respect to the Property. "INSURANCE REQUIREMENTS" means all provisions of the Insurance Policies, all requirements of the issuer of any of the Insurance Policies and all orders, rules, regulations and any other requirements of the National Board of Fire Underwriters (or any other body exercising similar functions) binding upon the Grantor or applicable to the Property, any adjoining vaults, sidewalks, parking areas or driveways or any use or condition thereof. "LAND" is defined in Granting Clause I. "LEASE" means any lease, tenancy, subtenancy, license, franchise, concession or other occupancy agreement relating to the Property, together with any guarantee of the obligations of the landlord or the tenant thereunder, or any occupancy or right to possession under any federal or state bankruptcy code in the event of the rejection of any Lease by the landlord or its trustee pursuant to said code; "LANDLORD" means the landlord, sublandlord, lessor, sublessor, franchisor or other grantor of a right of occupancy under a Lease and any guarantor of its obligations thereunder; and "TENANT" means the tenant, subtenant, lessee, sublessee, licensee, franchisee, concessionaire or other occupant under a Lease and any guarantor of its obligations thereunder. "LEGAL REQUIREMENTS" means all provisions of the Permitted Encumbrances, all provisions of the Permits and all applicable laws (including any Environmental Laws), statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions, rules, regulations, directions and requirements of, and agreements with, governmental bodies, agencies or officials, now or hereafter applicable to the Property, or any use or condition thereof. "LIEN" is defined in the Indenture. "NATIONAL FLOOD INSURANCE PROGRAM" means the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973 (42 U.S.C. Sections 4001, et seq.) 9 13 "NOTE GUARANTIES" is defined in the Recitals.. "NOTES" is defined in the Recitals. "OFFICERS' CERTIFICATE" is defined in the Indenture. "OPINION OF COUNSEL" is defined in the Indenture. "PERMITS" is defined in Granting Clause VIII. "PERMITTED ENCUMBRANCES" is defined in the Indenture. "PERSON" is defined in the Indenture. "PLEDGE AND SECURITY AGREEMENT" is defined in the Indenture. "PLEDGED EQUIPMENT" is defined in Section 6.03(f). "POST-DEFAULT RATE" means the interest rate owed on any overdue payments of principal or interest on the Notes as provided in each Note. "PROPERTY" is defined in Granting Clause II. "RECEIVER" is defined in Section 5.02(a)(iv). "REGISTRATION RIGHTS AGREEMENT" is defined in the Indenture. "RENTS" is defined in Granting Clause VII. "RESTORATION" means the restoration, repair, replacement or rebuilding of the Property after a Casualty or Condemnation and "RESTORE" means to restore, repair, replace or rebuild the Property after a Casualty or Condemnation, in each case as nearly as possible to its value and condition immediately prior to such Casualty or Condemnation. "REVISED ARTICLE 9" means revised Article 9 of the Uniform Commercial Code as set forth in the 1998 Official Text thereof; provided that, when used with respect to any jurisdiction on or after the date when revised Article 9 (with or without local changes therein) first becomes effective in such jurisdiction, "Revised Article 9" refers to Article 9 as in effect in such jurisdiction from time to time. 10 14 "REVISED UCC" means (i) before the UCC Revision Date, the Uniform Commercial Code as set forth in the 1998 Official Text thereof and (ii) on and after the UCC Revision Date, the UCC. "SECURED OBLIGATIONS" is defined in the Recitals. "SECURED PARTIES" means the (i) the Beneficiary, (ii) the Indenture Trustee, and (iii) the holders from time to time of the Notes. At the time of the execution and delivery of this Deed of Trust, the beneficial owners of the Secured Obligations and their respective addresses are as set forth on Schedule I attached hereto. "SECURITY DOCUMENTS" is defined in the Indenture. "TRANSFER" means, when used as a noun, any sale, conveyance, assignment, lease or other transfer and, when used as a verb, to sell, convey, assign, lease or otherwise transfer, in each case (i) whether voluntary or involuntary, (ii) whether direct or indirect and (iii) including any agreement providing for a Transfer or granting any right or option providing for a Transfer. "TRUST INDENTURE ACT" is defined in the Indenture. "TRUST PROPERTY" is defined in the Granting Clauses. "TRUSTEE" is defined in the Preamble. "UNAVOIDABLE DELAYS" means delays due to acts of God, fire, flood, earthquake, explosion or other Casualty, inability to procure or shortage of labor, equipment, facilities, sources of energy (including electricity, steam, gas or gasoline), materials or supplies, failure of transportation, strikes, lockouts, action of labor unions, Condemnation, litigation relating to Legal Requirements, inability to obtain Permits or other causes beyond the control of the Grantor, provided that lack of funds shall not be deemed to be a cause beyond the control of the Grantor. "UCC" means the Uniform Commercial Code as in effect in the State in which the Land and Improvements are located provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non- perfection of the Lien on any Trust Property is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State in which the Land and Improvements are located, "UCC" means the Uniform Commercial Code as in effect in such jurisdictions for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection. 11 15 "UCC REVISION DATE" means the date when Revised Article 9 first becomes effective in the State in which the Land and Improvements are located; provided that, if perfection or the effect of perfection or non-perfection or the priority of any Lien on any Trust Property is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State in which the Land and Improvements are located, "UCC Revision Date" means the date when Revised Article 9 first becomes effective in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority. Such provisions often refer to the relevant date as the "applicable UCC Revision Date". (b) In this Deed of Trust, unless otherwise specified, references to this Deed of Trust, Agreements, Material Agreements, Leases, Permits, Indenture, Notes, Credit Documents, and Security Documents include all amendments, supplements, consolidations, replacements, restatements, extensions, renewals and other modifications thereof, in whole or in part. SECTION 1.02. Interpretation. In this Deed of Trust, unless otherwise specified, (i) singular words include the plural and plural words include the singular; (ii) words which include a number of constituent parts, things or elements, including the terms Leases, Improvements, Land, Secured Obligations, Property and Trust Property, shall be construed as referring separately to each constituent part, thing or element thereof, as well as to all of such constituent parts, things or elements as a whole; (iii) words importing any gender include the other genders; (iv) references to any Person include such Person's successors and assigns and in the case of an individual, the word "SUCCESSORS" includes such Person's heirs, devisees, legatees, executors, administrators and personal representatives; (v) references to any statute or other law include all applicable rules, regulations and orders adopted or made thereunder and all statutes or other laws amending, consolidating or replacing the statute or law referred to; (vi) the words "CONSENT", "APPROVE" and "AGREE", and derivations thereof or words of similar import, mean the prior written consent, approval or agreement of the Person in question; (vii) the words "include" and "including", and words of similar import, shall be deemed to be followed by the words "without limitation"; (viii) the words "HERETO", "HEREIN", "HEREOF" and "HEREUNDER", and words of similar import, refer to this Deed of Trust in its entirety; (ix) references to Articles, Sections, Schedules, Exhibits, subsections, paragraphs and clauses are to the Articles, Sections, Schedules, Exhibits, subsections, paragraphs and clauses of this Deed of Trust; (x) the Schedules and Exhibits to this Deed of Trust are incorporated herein by reference; (xi) the titles and headings of Articles, Sections, Schedules, Exhibits, subsections, paragraphs and clauses are inserted as a matter of convenience and shall not affect the construction of this Deed of Trust; (xii) all obligations of the Grantor hereunder shall be satisfied by the Grantor at the Grantor's sole cost and expense; and (xiii) all rights and powers granted to the Beneficiary or the Trustee hereunder shall be deemed to be coupled with an interest and be irrevocable. 12 16 SECTION 1.03. Resolution of Drafting Ambiguities. The Grantor acknowledges that it was represented by counsel in connection with this Deed of Trust, that it and its counsel reviewed and participated in the preparation and negotiation of this Deed of Trust and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party or the Beneficiary shall not be employed in the interpretation of this Deed of Trust. ARTICLE 2 CERTAIN WARRANTIES AND COVENANTS OF THE GRANTOR SECTION 2.01. Title and Authority. (a) The Grantor represents and warrants that (i) the Grantor is the owner of the fee simple interest in the Land and the Improvements thereon, and the owner of the Equipment therein and all other items constituting the Trust Property, in each case free and clear of all Liens other than the Permitted Encumbrances; (ii) the execution, delivery and performance by the Grantor of this Deed of Trust are within the Grantor's power, have been duly authorized by all necessary action, require no action by or in respect of, or filing with, any governmental body, agency or official (except for the recording or filing of this Deed of Trust) and do not contravene, or constitute a default under, any provision of applicable law, the Certificate of Incorporation or by-laws of the Grantor or any agreement, judgment, injunction, order, decree or other instrument binding upon the Grantor or relating to the Property or result in the creation or imposition of any Lien on any asset of the Grantor (other than the Lien of this Deed of Trust); (iii) this Deed of Trust constitutes a valid and binding agreement of the Grantor, enforceable against the Grantor in accordance with its terms, except as (x) the enforceability may be limited by bankruptcy, insolvency or similar laws now or hereafter in effect relating to or affecting creditor's rights or remedies generally and (y) the availability of equitable remedies may be limited by equitable principles of general applicability; and (iv ) the Lien of this Deed of Trust for the ratable benefit of the Secured Parties will constitute a valid and perfected first-priority Lien on the Trust Properties securing the Secured Obligations, enforceable as such against all creditors of the Grantor (and any Persons purporting to purchase any of the Trust Property from the Grantor), subject to no Liens other than Permitted Encumbrances in existence on the date thereof. (b) The Grantor shall (i) cause the representations and warranties in Section 2.01(a) to be true and correct in each and every respect; and (ii) forever preserve, protect, warrant and defend (A) its estate, right, title and interest in and to the Trust Property, (B) the validity, enforceability and priority of the Lien of this Deed of Trust on the Trust Property, and (C) the right, title and interest of the Beneficiary, the Trustee and any purchaser at any sale of the Trust Property 13 17 hereunder or relating hereto, in each case against all other Liens and claims whatsoever, subject only to the Permitted Encumbrances. (c) The Grantor shall (i) promptly correct any material defect or error which may be discovered in this Deed of Trust or any financing statement or other document relating hereto; and (ii) promptly execute, acknowledge, deliver, record and re-record, register and re-register, and file and re-file this Deed of Trust and any financing statements or other documents which the Trustee may reasonably require from time to time (all in form and substance satisfactory to the Trustee) in order (A) to effectuate, complete, perfect, continue or preserve the Lien of this Deed of Trust as a first Lien on the Trust Property, whether now owned or hereafter acquired, subject only to the Permitted Encumbrances, or (B) to effectuate, complete, perfect, continue or preserve any right, power or privilege granted or intended to be granted to the Beneficiary or the Trustee. SECTION 2.02. Secured Obligations. The Grantor shall duly and punctually pay, perform and observe the Secured Obligations. SECTION 2.03. Impositions. The Grantor shall (i) subject to Section 2.06, duly and punctually pay all Impositions prior to the delinquency date thereof; (ii) subject to Section 2.06, duly and punctually file all returns and other statements required to be filed with respect to any Imposition; (iii) promptly notify the Beneficiary of the receipt by the Grantor of any notice of default in the payment of any Imposition or in the filing of any return or other statement relating to any Imposition and simultaneously furnish to the Beneficiary a copy of such notice of default; and (iv) upon reasonable request, promptly deliver to the Beneficiary (A) a certificate of the Grantor evidencing that the Grantor has complied with the provisions of this Section 2.03, accompanied to the extent required by copies of official receipts evidencing the payment of the Impositions, and (B) such other information and documents with respect to the matters referred to in this Section as the Beneficiary shall reasonably request. SECTION 2.04. Legal and Insurance Requirements. (a) The Grantor represents and warrants that (i) the Property and the use and operation thereof materially comply with all Legal Requirements and Insurance Requirements; (ii) there is no default under any Legal Requirement or Insurance Requirement which would have a material adverse effect on the Property; and (iii) the execution, delivery and performance of this Deed of Trust will not materially contravene any provision of or constitute a material default under any Legal Requirement or Insurance Requirement. (b) The Grantor shall (i) subject to Section 2.06, duly and punctually comply in all material respects with all Legal Requirements and Insurance Requirements; (ii) procure, maintain and, subject to Section 2.06, duly and 14 18 punctually comply in all material respects with all Permits required for any construction, reconstruction, repair, alteration, addition, improvement, maintenance, management, use and operation of the Property; (iii) promptly notify the Beneficiary of the receipt by the Grantor of any notice of default regarding any Legal Requirement or Insurance Requirement or any reasonably likely or actual termination of any Permit or Insurance Policy and furnish to the Beneficiary a copy of such notice of default or termination; (iv) promptly after obtaining knowledge thereof notify the Beneficiary of any condition which, with or without the giving of notice or the passage of time or both, would constitute a default regarding any Legal Requirement or Insurance Requirement or a termination of any Permit or Insurance Policy and the action being taken to remedy such condition; (v) upon request, promptly furnish to the Beneficiary a copy of any Permit obtained by the Grantor with respect to the Property after the date hereof; and (vi) upon reasonable request, promptly deliver to the Beneficiary (A) a certificate of the Grantor evidencing that the Grantor has complied with the provisions of this Section, and (B) such other information and documents with respect to the matters referred to in this Section as the Beneficiary shall reasonably request. SECTION 2.05. Status and Care of the Property. (a) The Grantor represents and warrants that (i) the Property is served by all necessary water treatment and pollution control facilities and all necessary water, sanitary and storm sewer, drainage, electric, steam, gas, telephone and other utility facilities which facilities have capacities which are generally sufficient to serve the current and anticipated future use and occupancy of the Property as presently constructed; (ii) the Property has legal access to all streets or roads necessary for the operation of the Property, which have been fully completed and properly dedicated, accepted or otherwise legally constructed as a public street or road (including, as appropriate, access over properly-granted, perpetual, private rights of way or easements) sufficient to serve the current and anticipated future use and operation of the Property as presently constructed; and (iii) either the Property is not located in an area designated as "flood prone" (as defined under the regulations adopted under the National Flood Insurance Program or, to the extent the Property is located (in whole or part) in an area designated as "flood prone", the Grantor shall maintain in full force and effect flood insurance under the National Flood Insurance Program, to the extent and in the amounts required by applicable law. (b) The Grantor (i) shall not cause or permit the Property to be misused, wasted, disfigured or damaged in any material manner or (except, subject to the provisions of this Section, for reasonable wear and tear) to deteriorate in any material manner; (ii) shall operate and maintain the Property, or cause the same to be operated and maintained, in good order, repair and condition; (iii) shall promptly make, or cause to be made, all repairs, replacements, renewals, restorations, alterations, additions and improvements of and to the Property, whether interior or exterior, structural or nonstructural, foreseen or unforeseen, or necessary or appropriate to 15 19 keep the Property in good order, repair and condition, all of which repairs, replacements, renewals and restorations shall be equal in quality to or better than the Property as of the date hereof; (iv) shall do or cause others to do all shoring of the Property, including the foundations and walls thereof, and to take all other actions necessary or appropriate for the preservation and safety thereof by reason of or in connection with any excavation or other construction operation on the Property, whether or not the Grantor shall be required by any Legal Requirement to take such action or be liable for failure to do so; (v) shall not initiate or affirmatively support any change in the applicable zoning adversely affecting the Property, seek any variance (or any change in any variance) under the zoning adversely affecting the Property, execute or file any subdivision or other plat or map adversely affecting the Property or consent to any of the foregoing; (vi) shall, promptly after receiving notice or obtaining knowledge of any proposed or threatened change in the zoning adversely affecting the Property which would result in the current use of such Property being a non-conforming use, notify the Beneficiary thereof and diligently contest the same by any action or proceeding deemed reasonably appropriate by the Grantor or reasonably requested by the Beneficiary; and (vii) upon reasonable request, shall promptly deliver to the Beneficiary (A) a certificate of the Grantor evidencing that the Grantor has complied with the provisions of this Section and (B) such other information and documents with respect to the matters referred to in this Section as the Beneficiary shall reasonably request. SECTION 2.06. Permitted Contests. The Grantor may contest, by appropriate proceedings conducted in good faith and with due diligence, any Legal Requirement, any Insurance Requirement, any Imposition or Lien therefor on the Trust Property or any interest therein, or any Lien of any laborer, mechanic, materialman, supplier or vendor on the Trust Property or any interest therein, provided that (i) if the matter being contested affects or relates to a material portion of the Trust Property, prior notice of the contest is given to the Beneficiary; (ii) no material Trust Property is in danger of being sold, forfeited or lost while such proceedings are pending; (iii) the Beneficiary and the other Secured Parties are not in danger of any criminal or material civil penalty or any other liability for failure to comply therewith and no material Trust Property is subject to the imposition of any Lien as a result of such failure which is not properly contested pursuant to this Section 2.06; (iv) in the case of any Insurance Requirement, no Insurance Policy or coverage is in danger of being forfeited or lost while such proceedings are pending; and (v) in the case of (A) any Lien of a laborer, mechanic, materialman, supplier or vendor, or (B) any Imposition or Lien therefor, such proceedings suspend the foreclosure of such Lien or any other collection thereof from the Trust Property and all interests therein. Upon reasonable request, the Grantor shall promptly deliver to the Beneficiary (x) a certificate of the Grantor describing in detail satisfactory to the Beneficiary the contests pending as of the date thereof and evidencing that the Grantor has complied with the provisions of this Section with respect thereto and (y) such other information and documents with 16 20 respect to the contests conducted pursuant to this Section as the Beneficiary shall reasonably request. SECTION 2.07. Other Instruments. (a) The Grantor shall execute, acknowledge and deliver, from time to time, such further instruments as Trustee may reasonably require to accomplish the purposes of this Deed of Trust. (b) The Grantor, immediately upon the execution and delivery of this Deed of Trust and thereafter from time to time, shall cause this Deed of Trust, any mortgage supplemental hereto and each instrument of further assurance to be filed, registered or recorded and refiled, re-registered or re-recorded in such manner and in such places as may be required by any present or future law in order to publish notice, and perfect the lien, of this Deed of Trust upon the Trust Property. (c) The Grantor shall pay all filing, registration and recording fees, all refiling, re-registration and re-recording fees and all expenses incident to the execution and acknowledgment of this Deed of Trust, any mortgage supplemental hereto and any instrument of further assurance and all federal, state, county and municipal stamp taxes and other taxes, duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of the Indenture, the Notes, this Deed of Trust, the other Security Documents, any deed of trust supplemental hereto or any instruments of further assurance. SECTION 2.08. Liens. The Grantor shall not create or permit to be created or to remain, and shall, subject to Section 2.06, immediately discharge or cause to be discharged, any Lien on the Trust Property, in each case (i) whether voluntarily or involuntarily created, and (ii) whether or not subordinated hereto, except Permitted Encumbrances and the Lien of this Deed of Trust. The provisions of this Section 2.08 shall apply to each and every Lien (other than Permitted Encumbrances) on the Trust Property, regardless of whether or not a consent to, or waiver of a right to consent to, any other Lien thereon has been previously obtained in accordance with the terms of the Credit Documents. SECTION 2.09. Transfer. The Grantor shall not Transfer, or suffer any Transfer of, the Trust Property or any part thereof or interest therein, except as permitted by Section 11.02 of the Indenture. The provisions of this Section 2.09 shall apply to each and every Transfer of the Trust Property or any interest therein, regardless of whether or not a consent to, or waiver of a right to consent to, any other Transfer thereof has been previously obtained in accordance with the terms of the Credit Documents. 17 21 ARTICLE 3 INSURANCE, CASUALTY AND CONDEMNATION SECTION 3.01. Insurance. (a) The Grantor shall maintain in full force and effect insurance policies with respect to the Property as required by Section 4.05 of the Indenture. The physical damage insurance maintained with respect to the Property shall (i) bear the New York standard non-contributory mortgage endorsement (or equivalent thereto) in favor of the Beneficiary and (ii) provide that all property losses incurred against shall be adjusted by the Grantor, subject to the Beneficiary's rights pursuant to Section 3.03. The public liability insurance maintained with respect to the Property shall name the Beneficiary and the other Secured Parties as additional insureds. All insurance maintained by the Grantor with respect to the Property shall provide that no cancellation or material change thereof shall be effective until at least thirty (30) days after receipt by the Beneficiary of written notice thereof; and all losses shall be payable notwithstanding any foreclosure or other action or proceeding taken pursuant to this Deed of Trust. (b) The Grantor shall furnish to the Beneficiary from time to time not later than fifteen (15) days prior to the expiration date of each policy required to be maintained by the Grantor hereunder, an insurance certificate or certificates executed by the insurer or its authorized agent with respect to the new or extended policy. If the Grantor fails to maintain the Insurance Policies required to be maintained under this Section, the Beneficiary shall have the right to obtain such Insurance Policies or pay the premiums therefor. If the Beneficiary obtains such Insurance Policies or pays the premium therefor, upon demand, the Grantor shall reimburse the Beneficiary for its expenses in connection therewith, together with interest thereon at the Post- Default Rate. (c) The Grantor may effect such coverage under subsection (a) of this Section under blanket insurance policies covering the other properties of the Company, provided that (i) any such blanket insurance policy shall specify therein, or the insurer under such policy shall certify to the Beneficiary, (A) the maximum amount of the total insurance afforded by the blanket policy allocated to the Property; and (B) any sublimits in such blanket policy applicable to the Property, which sublimits shall not be less than the amounts required pursuant to this Section; (ii) any such blanket insurance policy shall comply in all respects with the other provisions of this Section; and (iii) the protection afforded under any such blanket insurance policy shall be no less than that which would have been afforded under a separate policy relating only to the policy. (d) The Grantor shall not maintain additional or separate insurance concurrent in form or contributing in the event of loss with the insurance required under this Section, unless the Beneficiary and the other Secured Parties are included in such policies as loss payees or additional insureds. 18 22 SECTION 3.02. Casualty. (a) The Grantor represents and warrants that, as of the date hereof, there is no Casualty materially affecting the Property. (b) In the event of any Casualty, the Grantor shall (i) promptly give notice thereof to the Beneficiary in the form of an Officers' Certificate, describing in detail reasonably satisfactory to the Beneficiary the nature and extent of such Casualty, the work required to Restore the Property affected thereby and the Grantor's best estimate of the cost of such Restoration, itemized in detail reasonably satisfactory to the Beneficiary; and (ii) immediately take such action as may be reasonably necessary or appropriate to preserve the undamaged portion of such Property and to protect against personal injury or property damage. In the event of any Casualty, Grantor shall promptly commence and diligently pursue to completion, or cause to be commenced and diligently pursued to completion, the Restoration of such Property, subject to Unavoidable Delays, whether or not the Insurance Proceeds with respect to such Casualty available to the Grantor to pay the cost of Restoration are sufficient, provided that, pursuant to Section 11.03 of the Indenture and subject to Section 3.03 below, the Beneficiary shall make available to Grantor any Insurance Proceeds held by the Beneficiary. SECTION 3.03. Insurance Claims and Proceeds. In the event of any Casualty, (i) the Grantor shall promptly make proof of loss under the applicable Insurance Policies and diligently pursue to conclusion its claim for the Insurance Proceeds payable thereunder and any suit, action or other proceeding necessary or appropriate to obtain payment of such Insurance Proceeds; (ii) if an Event of Default is continuing, the Grantor shall have no right to settle, and shall not settle, any such claim or proceeding without the consent of the Beneficiary, which consent shall not be unreasonably withheld or delayed; and (iii) upon receipt of Insurance Proceeds aggregating $2,500,000 or more, the Grantor shall promptly pay the Insurance Proceeds with respect to any Casualty to the Beneficiary for deposit in the Cash Collateral Account (except as provided in Section 11.03 of the Indenture) to be held, applied and disbursed in accordance with Sections 11.02 and 11.03 of the Indenture. SECTION 3.04. Condemnation. (a) The Grantor represents and warrants that, as of the date hereof, (i) there is no Condemnation affecting any Property, (ii) there are no negotiations or proceedings which might result in such a Condemnation, and (iii) to the knowledge of the Grantor, no such Condemnation is proposed or threatened. (b) In the event of any material Condemnation or the commencement of any negotiation or proceeding which might result in a material Condemnation, or in the event of any proposed or threatened material Condemnation, the Grantor shall promptly after receiving notice or obtaining knowledge thereof give notice thereof to the Beneficiary in the form of an Officers' Certificate, describing in detail reasonably satisfactory to the Beneficiary the nature and extent of such 19 23 Condemnation, negotiation or proceeding, the action which the Grantor intends to take with respect thereto, the work required to Restore the Property affected by such Condemnation and the Grantor's best estimate of the cost of such Restoration. In the event of any such Condemnation, whether or not the Awards with respect to such Condemnation available to the Grantor to pay the cost of Restoration are sufficient for that purpose, the Grantor shall promptly commence and diligently pursue to completion the Restoration of the Property affected by such Condemnation, subject to Unavoidable Delays, provided that, pursuant to Section 11.03 of the Indenture and subject to Section 3.05 below, the Beneficiary shall make available to Grantor any Awards held by the Beneficiary. SECTION 3.05. Condemnation Proceedings and Awards. In the event of any Condemnation or the commencement of any negotiation or proceeding which might result in a Condemnation, or in the event of any proposed or threatened Condemnation, (i) the Grantor shall, promptly after receiving notice or obtaining knowledge thereof, do all things deemed necessary or appropriate by the Grantor or reasonably requested by the Beneficiary to preserve the Grantor's interest in such Property and promptly make claim for Awards payable with respect thereto and diligently pursue to conclusion such claim for such Awards and any suit, action or other proceeding necessary or appropriate to obtain payment thereof; (ii) if an Event of Default is continuing, the Grantor shall have no right to settle, and shall not settle, any such claim, negotiation or proceeding without the consent of the Beneficiary, which consent shall not be unreasonably withheld or delayed; and (iii) upon receipt of Awards aggregating $2,500,000 or more, the Grantor, shall promptly pay the Awards with respect to such Condemnation to the Beneficiary for deposit in the Cash Collateral Account, (except as provided in Section 11.03 of the Indenture) to be held, applied and disbursed in accordance with Sections 11.02 and 11.03 of the Indenture. ARTICLE 4 INCREASED COSTS AND INDEMNIFICATION SECTION 4.01. Increased Costs. In the event of the enactment after the date hereof of any applicable law deducting from the value of the Property for the purpose of taxation any Lien thereon or changing in any way the applicable law for the taxation of mortgages, deeds of trust or other Liens or obligations secured thereby, or the manner of collection of such taxes, so as to affect this Deed of Trust, the Secured Obligations, the Beneficiary or any other Secured Party, upon demand by the Trustee, to the extent permitted under applicable law, the Grantor shall pay or reimburse the Beneficiary or such Secured Party, for all taxes, assessments or other charges which the Beneficiary or such Secured Party is obligated to pay as a result thereof. 20 24 SECTION 4.02. Indemnification. The Grantor shall indemnify each of the Trustee, the Beneficiary, and the other Secured Parties (collectively, the "INDEMNITEES") against, and hold each Indemnitee harmless from, any and all losses, claims, liabilities and related expenses, including the reasonable and duly documented fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (a) the Trustee's or the Beneficiary's exercise pursuant to the terms of this Deed of Trust of any of its rights and remedies hereunder upon the default, or failure to perform as required hereunder, of the Grantor; (b) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about the Trust Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, street or ways; (c) any failure on the part of the Grantor to perform or comply with any of the terms of this Deed of Trust; (d) the performance of any labor or services or the furnishing of any materials or other property in respect of the Trust Property or any part thereof; or (e) any other conduct or misconduct of the Grantor, any lessee of any of the Trust Property, or any of their respective agents, contractors, subcontractors, servants, employees, licensees or invitees; provided, however, that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and unappealable judgment to have resulted, except as otherwise required under the Trust Indenture Act, from the gross negligence or willful misconduct of such Indemnitee. Any amount payable under this Section 4.02 will be deemed a demand obligation and will bear interest at the Post-Default Rate from the date of such demand through the date paid. The obligations of the Grantor under this Section, in respect of periods prior to the release of this Deed of Trust, shall survive the release of this Deed of Trust. ARTICLE 5 DEFAULTS, REMEDIES AND RIGHTS SECTION 5.01. Events of Default. (a) subject to Section 6.02 of the Indenture, any Event of Default under the Indenture shall constitute an Event of Default hereunder. (b) All notice and cure periods provided in the Indenture and the other Credit Documents shall run concurrently with any notice or cure periods provided under applicable law. SECTION 5.02. Remedies. (a) Subject to Section 6.02 of the Indenture, if an Event of Default is continuing, the Beneficiary or the Trustee is hereby authorized and empowered, at its option, and without affecting the lien hereby created or the 21 25 priority of said lien or any right of the Beneficiary hereunder, to declare, without further notice, all Secured Obligations to be immediately due and payable, whether or not such Event of Default is thereafter remedied by Grantor. Upon such acceleration, all Secured Obligations shall bear interest thereon at the Post-Default Rate, and the Beneficiary or the Trustee may immediately proceed to foreclose this Deed of Trust and/or exercise any right, power or remedy provided by any of the Credit Documents, including the following remedies and rights, subject to mandatory provisions of applicable law, whether or not the maturity of the Secured Obligations has been accelerated, to wit: (i) to institute a proceeding or proceedings, by advertisement, judicial process or otherwise as provided under applicable law, for the complete or partial foreclosure of this Deed of Trust or the complete or partial sale of the Trust Property under the power of sale hereunder or under any applicable provision of law; or (ii) to sell the Trust Property, and all estate, right, title, interest, claim and demand of the Grantor therein and thereto, and all rights of redemption thereof, at one or more sales, as an entirety or in parcels, with such elements of real or personal property, at such time and place and upon such terms as the Beneficiary may deem expedient or as may be required under applicable law, and in the event of a sale hereunder or under any applicable provision of law of less than all of the Trust Property, this Deed of Trust shall continue as a Lien on the remaining Trust Property; or (iii) to institute a suit, action or proceeding for the specific performance of any of the provisions of the Security Documents; or (iv) to apply for the appointment of a receiver, supervisor, trustee, liquidator, conservator or other custodian (a "RECEIVER") of the Trust Property, to be appointed, to the fullest extent permitted by law, as a matter of right and without regard to, or the necessity to disprove, the adequacy of the security for the Secured Obligations or the solvency of the Company, the Grantor or any other Guarantor, and the Grantor hereby, to the full extent permitted by applicable law, irrevocably waives such necessity and consents to such appointment, said appointee to be vested with the fullest powers permitted under applicable law, including to the extent permitted under applicable law those under clause (v) of this subsection 5.02(a); or (v) to enter upon the Property, by the Beneficiary or a Receiver (as the case may be as the Person exercising the rights under this clause), and, to the extent permitted by law, exclude the Grantor and its managers, employees, contractors, agents and other representatives therefrom in accordance with applicable law, without liability for trespass, damages or 22 26 otherwise, and take possession of all other Trust Property and all books, records and accounts of the Grantor relating thereto, and upon demand the Grantor shall surrender possession of the Property, the other Trust Property and such books, records and accounts to the Person exercising the rights under this clause after the occurrence of any Event of Default; and having and holding the same, the Person exercising the rights under this clause may use, operate, manage, preserve, control and otherwise deal therewith and conduct the business thereof, either personally or by its managers, employees, contractors, agents or other representatives, without interference from the Grantor or its managers, employees, contractors, agents and other representatives; and, upon each such entry and from time to time thereafter, at the expense of the Grantor and the Trust Property, without interference by the Grantor or its managers, employees, contractors, agents and other representatives, the Person exercising the rights under this clause may, as such Person deems expedient, (A) insure or reinsure the Property, (B) make all necessary or proper repairs, renewals, replacements, alterations, additions, betterments and improvements to the Property and (C) in such Person's own name or, at the option of such Person, in the Grantor's name, exercise all rights, powers and privileges of the Grantor with respect to the Trust Property including the right to enter into Leases with respect to the Property, including Leases extending beyond the time of possession by the Person exercising the rights under this clause; and the Person exercising the rights under this clause shall not be liable to account for any action taken hereunder, other than for Rents actually received by such Person, and shall not be liable for any loss sustained by the Grantor resulting from any failure to let the Property or from any other act or omission of such Person, except to the extent such loss is caused, unless otherwise required under the Trust Indenture Act, by such Person's own willful misconduct or gross negligence; in exercising the rights under this Section 5.02(a)(v), the Beneficiary acknowledges that the agent under the Credit Agreement and its agent or representatives, upon notice to the Beneficiary, may enter upon the Property to inspect, remove or take possession of inventory securing the obligations under the Credit Agreement and may conduct a public or private sale of such inventory at the Property provided any such entry or other activities should not damage or diminish the value of the Trust Property or interfere with the operation of the same; or (vi) with or, to the fullest extent permitted by law, without entry upon the Property, in the name of the Beneficiary or a Receiver (as required by law and as the case may be as the Person exercising the rights under this clause) or, at such Person's option, in the name of the Grantor, to collect, receive, sue for and recover all Rents and proceeds of or derived from the Trust Property, and after deducting therefrom all costs, expenses and liabilities of every character reasonably incurred by the Person exercising the rights under this clause in collecting the same and in using, operating, 23 27 managing, preserving and controlling the Trust Property and otherwise in exercising the rights under clause (v) of this subsection 5.02(a) or any other rights hereunder, including all amounts necessary to pay the Impositions, the Rents, Insurance Premiums and other costs, expenses and liabilities relating to the Property, as well as compensation for the services of such Person and its managers, employees, contractors, agents or other representatives, to apply the remainder as provided in Section 5.06; or (vii) to take any action with respect to any Trust Property permitted under the UCC; or (viii) to take any other action, or pursue any other remedy or right, as the Beneficiary or the Trustee may have under applicable law, and the Grantor does hereby grant the same to the Beneficiary or the Trustee; or (ix) at any time after the exercise by the Beneficiary of the option to declare the Secured Obligations to be immediately due and payable, the Trustee, upon the written request of the Beneficiary; shall foreclose upon and sell the Trust Property (or any part or parts thereof) to satisfy the Secured Obligations at public auction at the front door of the courthouse of the county (or any county if more than one) in the State of West Virginia in which the Property is located, for cash in hand on the day of sale, after first giving notice of such sale by publishing such notice in a qualified newspaper of general circulation published in said county, or if there be no such newspaper in a qualified newspaper of general circulation published in said county, once a week for two successive weeks preceding the day of sale, and except as otherwise provided herein, no other notice of such sale shall be required. (b) (i) No remedy or right hereunder or under any other Credit Document shall be exclusive of any other remedy or right, but each remedy or right hereunder or under any other Credit Document shall be in addition to, and not in limitation of, any other remedy or right hereunder, under any other Credit Document or now or hereafter existing at law or in equity under applicable law. (ii) Every remedy or right hereunder, under any other Credit Document or under applicable law may be exercised concurrently or independently and whenever and as often as deemed appropriate by the Trustee to the extent permitted by applicable law. (c) (i) No failure to exercise or delay in exercising any remedy or right hereunder, under any other Credit Document or under applicable law shall be construed as a waiver of any Default or other occurrence hereunder or under any other Credit Document. 24 28 (ii) No waiver of, failure to exercise or delay in exercising any remedy or right hereunder, under any other Credit Document or under applicable law upon any Default or other occurrence hereunder or under any other Credit Document shall be construed as a waiver of, or otherwise limit the exercise of, such remedy or right upon any other or subsequent Default or other occurrence hereunder or under any other Credit Document. (iii) No single or partial exercise of any remedy or right hereunder, under any other Credit Document or under applicable law upon any Default or other occurrence hereunder or under any other Credit Document shall preclude or otherwise limit the exercise of any other remedy or right hereunder, under any other Credit Document or under applicable law upon such Default or occurrence or upon any other or subsequent Default or other occurrence hereunder or under any other Credit Document. (iv) The acceptance by the Beneficiary, Trustee or any Secured Party of any payment less than the amount of the Secured Obligation in question shall be deemed to be an acceptance on account only and shall not be construed as a waiver of any Default hereunder or under any other Credit Document with respect thereto. (v) The acceptance by the Beneficiary, Trustee or any Secured Party of any payment of, or on account of, any Secured Obligation shall not be deemed to be a waiver of any Default or other occurrence hereunder or under any other Credit Document with respect to any other Secured Obligation. (d) In the event that the Beneficiary or the Trustee has proceeded to enforce any remedy or right hereunder or with respect hereto by foreclosure, sale, entry or otherwise, it may compromise, discontinue or abandon such proceeding for any reason without notice to the Grantor or any other Person; and, in the event that any such proceeding shall be discontinued, abandoned or determined adversely for any reason, the Grantor, the Beneficiary and the Trustee shall retain and be restored to their former positions and rights hereunder with respect to the Trust Property, subject to the Lien hereof except to the extent any such adverse determination specifically provides to the contrary. (e) For the purpose of carrying out any provisions of Section 5.02(a)(v), 5.02(a)(vi), 5.05, 5.07, or 5.10 or any other provision hereunder authorizing the Beneficiary or the Trustee or any other Person to perform any action on behalf of the Grantor, the Grantor hereby irrevocably appoints the Beneficiary or the Trustee or a Receiver appointed pursuant to Section 5.02(a)(iv) or such other Person (as the case may be as the Person appointed under this subsection) as the attorney-in-fact of the Grantor (with a power to substitute any other Person in its place as such attorney-in-fact) to act in the name of the Grantor or, at the option of the Person 25 29 appointed to act under this subsection, in such Person's own name, to take the action authorized under Section 5.02(a)(v), 502.(a)(vi), 5.05, 5.07, or 5.10 or such other provision, and to execute, acknowledge and deliver any document in connection therewith or to take any other action incidental thereto, as the Person appointed to act under this subsection shall deem appropriate in its discretion; and the Grantor hereby irrevocably authorizes and directs any other Person to act on behalf of the foregoing appointment and upon a certificate of the Person appointed to act under this subsection that such Person is authorized to act under this subsection. (f) The Beneficiary shall give the Grantor at least ten days' prior written notice of the time and place of any public sale of personal property separately from the real property, or the time after which any such private sale or other intended disposition thereof will be made. The Beneficiary and the Grantor agree that such notice constitutes "reasonable notification" within the meaning of UCC Section 9- 504(3). After the UCC Revision Date, any such notice shall contain the information specified in Revised UCC Section 9-613, be authenticated (as defined in the Revised UCC) and be sent to the parties required to be notified pursuant to Revised UCC Section 9-611(c); provided that, if the Beneficiary fails to comply with this sentence in any respect, its liability for such failure shall be limited to the liability (if any) imposed on it as a matter of law under the UCC. SECTION 5.03. Waivers by the Grantor. To the extent permitted under applicable law, the Grantor shall not assert, and hereby irrevocably waives, any right or defense the Grantor may have under any statute or rule of law or equity now or hereafter in effect relating to (i) appraisement, valuation, homestead, exemption, extension, moratorium, stay, redemption, marshalling of the Trust Property or the other assets of the Grantor, sale of the Trust Property in any order or notice of deficiency or intention to accelerate any Secured Obligation; (ii) impairment of any right of subrogation or reimbursement; (iii) any requirement that at any time any action must be taken against any other Person, any portion of the Trust Property or any other asset of the Grantor or any other Person; (iv) any provision barring or limiting the right of the Trustee to sell any Trust Property after any other sale of any other Trust Property or any other action against the Grantor or any other Person; (v) any provision barring or limiting the recovery by the Beneficiary of a deficiency after any sale of the Trust Property; or (vi) any other provision of applicable law (including any provision relating to decedents' estates) which might defeat, limit or adversely affect any right or remedy of the Beneficiary, the Trustee or the holders of the Secured Obligations under or with respect to this Deed of Trust or the other Security Documents. SECTION 5.04. Jurisdiction and Process. (a) To the extent permitted under applicable law, in any suit, action or proceeding arising out of or relating to this Deed of Trust or any other Security Document as it relates to any Trust Property, the Grantor irrevocably consents to the jurisdiction of any state or federal court sitting 26 30 in the State in which the Property is located and irrevocably waives any defense or objection which it may now or hereafter have to the jurisdiction of such court over the venue of such court for or the convenience of such court as the forum for any such suit, action or proceeding. (b) Nothing in this Section shall affect the right of the Beneficiary or the Trustee to bring any suit, action or proceeding arising out of or relating to this Deed of Trust or any other Security Document in any court having jurisdiction under the provisions of any other Security Document or applicable law or to serve any process, notice of sale or other notice in any manner permitted by any other Security Document or applicable law. SECTION 5.05. Sales. Except as otherwise provided herein, to the fullest extent permitted under applicable law, at the election of the Beneficiary, the following provisions shall apply to any sale of the Trust Property hereunder, whether made pursuant to the power of sale hereunder, any judicial proceeding or any judgment or decree of foreclosure or sale or otherwise: (a) To the extent permitted by law, any sale may be conducted by the Beneficiary or the Trustee or by an agent appointed to act on behalf of such party and the appointment need not be recorded. The power of sale hereunder or with respect hereto shall not be exhausted by any sale as to any part or parcel of the Trust Property which is not sold, unless and until the Secured Obligations shall have been paid in full, and shall not be exhausted or impaired by any sale which is not completed or is defective. Any sale may be as a whole or in part or parcels and, to the fullest extent permitted by law, the Grantor hereby waives its right to direct the order in which the Trust Property or any part or parcel thereof is sold. (b) To the extent permitted by law, any sale may be postponed or adjourned by public announcement at the time and place appointed for such sale or for such postponed or adjourned sale without further notice. (c) After each sale, the Person conducting such sale shall execute and deliver to the purchaser or purchasers at such sale a good and sufficient instrument or instruments granting, conveying, assigning and transferring all right, title and interest of the Grantor in and to the Trust Property sold and shall receive the proceeds of such sale and apply the same as provided in Section 5.06. The Grantor hereby irrevocably appoints the Person conducting such sale as the attorney-in-fact of the Grantor (with full power to substitute any other Person in its place as such attorney-in-fact) to act in the name of the Grantor or, at the option of the Person conducting such sale, in such Person's own name, to make without warranty by such Person any conveyance, assignment, transfer or delivery of the Trust Property sold, and to execute, 27 31 acknowledge and deliver any instrument of conveyance, assignment, transfer or delivery or other document in connection therewith or to take any other action incidental thereto, as the Person conducting such sale shall deem appropriate in its discretion; and the Grantor hereby irrevocably authorizes and directs any other Person to act upon the foregoing appointment and a certificate of the Person conducting such sale that such Person is authorized to act hereunder. Nevertheless, upon the request of such attorney-in-fact the Grantor shall promptly execute, acknowledge and deliver any documentation which such attorney-in-fact may reasonably require for the purpose of ratifying, confirming or effectuating the powers granted hereby or any such conveyance, assignment, transfer or delivery by such attorney-in-fact. Any statement of fact or other recital made in any instrument referred to in this Section 5.05(c) given by the Person conducting any sale as to the nonpayment of any Secured Obligation, the occurrence of any Event of Default, the amount of the Secured Obligations due and payable, the notice of the time, place and terms of sale and of the Trust Property to be sold having been duly given, the refusal, failure or inability of the Beneficiary to act, the appointment of any substitute or successor beneficiary, any other act or thing having been duly done by Grantor, the Beneficiary, the Trustee or any other such Person, shall be taken as conclusive and binding, absent manifest error, against all other Persons as evidence of the truth of the facts so stated or recited. (d) The receipt of the Person conducting any sale for the purchase money paid at any such sale shall be sufficient discharge therefor to any purchaser of any Trust Property sold, and no such purchaser, or its representatives, grantees or assigns, after paying such purchase price and receiving such receipt, shall be bound to see to the application of such purchase price or any part thereof upon or for any trust or purpose of this Deed of Trust or, in any manner whatsoever, be answerable for any loss, misapplication or nonapplication of any such purchase money or be bound to inquire as to the authorization, necessity, expediency or regularity of such sale. (e) Subject to mandatory provisions of applicable law, any sale shall operate to divest all of the estate, right, title, interest, claim and demand whatsoever, whether at law or in equity, of the Grantor in and to the Trust Property sold, and shall be a perpetual bar both at law and in equity against the Grantor and any and all Persons claiming such Trust Property or any interest therein by, through or under the Grantor. (f) Notwithstanding any provision herein to the contrary, at any sale, the Beneficiary may bid for and acquire the Trust Property sold and, in lieu of paying cash therefor, may make settlement for the purchase price by 28 32 causing the Secured Parties to credit against the Secured Obligations, including the expenses of the sale and the cost of any enforcement proceeding hereunder, the amount of the bid made therefor to the extent necessary to satisfy such bid. (g) In the event that the Grantor or any Person claiming by, through or under the Grantor shall transfer or fail to surrender possession of the Trust Property after any sale thereof, then, to the extent permitted by law, the Grantor or such Person shall be deemed a tenant at sufferance of the purchaser at such sale, subject to eviction by means of summary process for possession of land, or subject to any other right or remedy available hereunder or under applicable law. (h) Upon any sale, it shall not be necessary for the Person conducting such sale to have any Trust Property being sold present or constructively in its possession. (i) In the event that a foreclosure hereunder shall be commenced by the Beneficiary or the Trustee, the Beneficiary may at any time before the sale abandon the sale, and may institute suit for the collection of the Secured Obligations or for the foreclosure of this Deed of Trust; or in the event that the Beneficiary or the Trustee should institute a suit for collection of the Secured Obligations or the foreclosure of this Deed of Trust, the Beneficiary may at any time before the entry of final judgment in said suit dismiss the same and sell the Trust Property in accordance with the provisions of this Deed of Trust. SECTION 5.06. Proceeds. Except as otherwise provided herein and in the Indenture or required under applicable law, the proceeds of any sale of the Trust Property hereunder, whether made pursuant to the power of sale hereunder, any judicial proceeding or any judgment or decree of foreclosure or sale or otherwise shall be applied and paid as follows: (a) First: to the payment of all expenses of such sale, including compensation the Beneficiary or the Trustee or such other Person conducting such sale, the cost of title searches, foreclosure certificates, title commitments or abstracts, and attorneys' fees and expenses incurred by such Person, together with interest on any such expenses paid by such Person at the Post-Default Rate from the date paid by such Person through the date repaid to such Person; (b) Second: to the payment of the expenses and other amounts payable under Sections 4.02 and 5.10; and 29 33 (c) Third: to the Beneficiary for deposit in the Cash Collateral Account, to be held, applied and disbursed in accordance with Section 6.10 of the Indenture. SECTION 5.07. Assignment of Leases. (a) Subject to Section 5.07(d) below, the assignments of the Leases and the Rents under Granting Clauses VI and VII are and shall be present, absolute and irrevocable assignments by the Grantor to the Trustee and, subject to the license to the Grantor under Section 5.07(b), the Beneficiary or a Receiver appointed pursuant to Section 5.02(a)(iv) (as the case may be as the Person exercising the rights under this Section) shall have the absolute, immediate and continuing right to collect and receive all Rents now or hereafter, including during any period of redemption, accruing with respect to the Property. At the request of the Beneficiary or such Receiver, the Grantor shall promptly execute, acknowledge, deliver, record, register and file any additional general assignment of the Leases or specific assignment of any Lease which the Beneficiary or such Receiver may reasonably require from time to time (all in form and substance satisfactory to the Beneficiary or such Receiver) to effectuate, complete, perfect, continue or preserve the assignments of the Leases and the Rents under Granting Clauses VI and VII. (b) As long as no Event of Default is continuing, the Grantor shall have the right under a license granted hereby, subject to Section 5.05(c), to collect all Rents upon, but not prior to thirty (30) days before, the due date thereof. (c) If an Event of Default is continuing, the Beneficiary or a Receiver appointed pursuant to Section 5.02(a)(iv) (as the case may be as the Person exercising the rights under this Section) shall have the right to terminate the license granted under Section 5.07(b) by notice to the Grantor and to exercise the rights and remedies provided under Section 5.07(a), under Sections 5.02(a)(v) and (vi) or under applicable law. If an Event of Default is continuing, upon demand by the Person exercising the rights under this Section, the Grantor shall promptly pay to such Person all Security Deposits under the Leases and all Rents allocable to any period after the occurrence of such Event of Default. Subject to Sections 5.02(a)(v) and (vi) and any applicable requirement of law, any Rents received hereunder by the Person exercising the rights under this Section shall be promptly paid to the Beneficiary, and any Rents received hereunder by the Beneficiary shall be deposited in the Cash Collateral Account, to be held, applied and disbursed as provided in the Pledge and Security Agreement and the Indenture, provided that, subject to Sections 5.02(a)(v) and (vi) and any applicable requirement of law, any Security Deposits actually received by such Person shall be promptly paid to the Beneficiary, and any Security Deposits actually received by the Beneficiary shall be held, applied and disbursed as provided in the applicable Leases and applicable law. (d) Nothing herein shall be construed to be an assumption by the Person exercising the rights under this Section, or to otherwise make such Person liable for 30 34 the performance, of any of the obligations of the Grantor under the Leases, provided that such Person shall be accountable as provided in Section 5.07(c) for any Rents or Security Deposits actually received by such Person. SECTION 5.08. Dealing with the Trust Property. Subject to Section 7.02, the Beneficiary shall have the right to release any portion of the Trust Property to or at the request of the Grantor, for such consideration as the Beneficiary may require without, as to the remainder of the Trust Property, in any way impairing or affecting the Lien or priority of this Deed of Trust, or improving the position of any subordinate lienholder with respect thereto, except to the extent that the Secured Obligations shall have been reduced by any actual monetary consideration received for such release and applied to the Secured Obligations, and may accept by assignment, pledge or otherwise any other property in place thereof as the Beneficiary may require without being accountable therefor to any other lienholder. SECTION 5.09. Right of Entry. The Beneficiary or the Trustee (as the case may be as the Person exercising the rights under this Section) and the representatives of such Person shall have the right, (i) without prior notice if an Event of Default is continuing or such entry is necessary in the reasonable opinion of the Beneficiary to preserve the Beneficiary's rights under this Deed of Trust or with respect to the Trust Property, or (ii) after reasonable notice and subject to reasonable rules and procedures for safety and security established by the Grantor if no Event of Default is continuing, to enter upon the Property at all reasonable times, as often as such Person may reasonably require, to inspect the Trust Property or, subject to the provisions hereof, to exercise any right, power or remedy of such Person hereunder, provided that any Person so entering the Property shall not unreasonably interfere with the ordinary conduct of Grantor's business, and provided further that no such entry on the Property for the purpose of performing obligations under Section 5.10 or any other purpose shall be construed to be (x) possession of the Property by such Person or to constitute such Person as a Beneficiary, trustee or mortgagee in possession, unless such Person exercises its right to take possession of the Property under Section 5.02(a)(v), or (y) a cure of any Default or waiver of any Default or Secured Obligation. SECTION 5.10. Right to Perform Obligations. If the Grantor fails to pay or perform any obligation of the Grantor hereunder or under any other Security Document, the Beneficiary or the Trustee and the representatives of such Person shall have the right, (i) without notice if an Event of Default is continuing or such payment or performance is necessary in the reasonable opinion of the Beneficiary to preserve the Beneficiary's rights under this Deed of Trust or with respect to the Trust Property, or (ii) after reasonable notice if no Event of Default is continuing, to pay or perform such obligation, provided that no such payment or performance shall be construed to be a cure of any Default or waiver of any Default or Secured Obligation. If, pursuant to the terms of this Deed of Trust, the Beneficiary shall make any 31 35 payment on behalf of the Grantor, the amount so paid shall be reimbursable by the Grantor immediately upon such payment together with interest accrued thereon at the Post-Default Rate to the date of reimbursement. The obligation of the Grantor to reimburse the Beneficiary for such payment, as well as interest accrued thereon, shall be part of the Secured Obligations and shall be secured by this Deed of Trust. SECTION 5.11. Concerning the Beneficiary. (a) The provisions of Article 7 of the Indenture with respect to the Indenture Trustee shall inure to the benefit of the Beneficiary in respect of this Deed of Trust as if incorporated herein and shall be binding upon the parties to the Indenture and the holders of the Notes in such respect. In furtherance and not in derogation of the rights, privileges and immunities of the Beneficiary therein set forth: (i) The Beneficiary is authorized to take all such action as is provided to be taken by it as Beneficiary hereunder and all other action reasonably incidental thereto. As to any matters not expressly provided for herein (including the timing and methods of realization upon the Trust Property), the Beneficiary shall act or refrain from acting in accordance with written instructions from the Indenture Trustee or the holders of a majority in principal amount of the Notes or, in the absence of such instructions, in accordance with its discretion. (ii) The Beneficiary shall not be responsible for the existence, genuineness or value of any of the Trust Property or for the validity, perfection, priority or enforceability of the Lien of this Deed of Trust on any of the Trust Property, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder. The Beneficiary shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Deed of Trust by the Grantor. (b) At any time or times, in order to comply with any legal requirement in any jurisdiction, the Beneficiary may appoint another bank or trust company or one or more other persons, either to act as co-agent or co-agents, jointly with the Beneficiary, or to act, in accordance with the provisions of this Deed of Trust, as separate agent or agents on behalf of the Secured Parties with such power and authority as may be necessary for the effectual operation of the provisions hereof and may be specified in the instrument of appointment (which may, in the discretion of the Beneficiary, include provisions for the protection of such co-agent or separate agent similar to the provisions of Section 5.11). 32 36 ARTICLE 6 SECURITY AGREEMENT AND FIXTURE FILING SECTION 6.01. Security Agreement. To the extent that the Trust Property includes personal property or items of personal property which are or are to become fixtures under applicable law, this Deed of Trust shall also be construed as a Security Agreement under the UCC; and, if an Event of Default is continuing, the Beneficiary shall be entitled with respect to such personal property to all remedies available under the UCC and all other remedies available under applicable law. Without limiting the foregoing, if an Event of Default is continuing, any personal property may, at the Beneficiary's option, (i) be sold hereunder, (ii) be sold pursuant to the UCC or (iii) be dealt with by the Beneficiary in any other manner permitted under applicable law. The Trustee may require the Grantor to assemble the personal property and make it available to the Beneficiary at a place to be designated by the Beneficiary. If an Event of Default is continuing, the Beneficiary shall be the attorney-in-fact of the Grantor with respect to any and all matters pertaining to the personal property with full power and authority to give instructions with respect to the collection and remittance of payments, to endorse checks, to enforce the rights and remedies of the Grantor and to execute on behalf of the Grantor and in Grantor's name any instruction, agreement or other writing required therefor. The Grantor acknowledges and agrees that a disposition of the personal property in accordance with the Beneficiary's rights and remedies in respect to the Property as heretofore provided is a commercially reasonable disposition thereof. SECTION 6.02. Fixture Filing. To the extent that the Trust Property includes items of personal property which are or are to become fixtures under applicable law, and to the extent permitted under applicable law, the filing of this Deed of Trust in the real estate records of the county in which such Trust Property is located shall also operate from the time of filing as a fixture filing with respect to such Trust Property, and the following information is applicable for the purpose of such fixture filing, to wit: (a) Name and Address of the debtor: Century Aluminum of West Virginia, Inc. P.O. Box 98 Ravenswood, West Virginia 26164 33 37 (b) Name and Address of the secured party: Wilmington Trust Company, as Collateral Agent Rodney Square North 1100 North Market Street Wilmington, Delaware 19890 (c) This document covers goods or items of personal property which are or are to become fixtures upon the Land and Improvements. (d) The name of the record owners of the Land and Improvements on which such fixtures are or are to be located is Century Aluminum of West Virginia, Inc. SECTION 6.03. Further Assurances; General Covenants. The Grantor covenants as follows: (a) The Grantor will execute and file such financing or continuation statements, or amendments thereto, and such other instruments or notices as may be necessary, as are required by applicable law, or as the Beneficiary may reasonably request, in order to perfect and preserve the Lien granted or purported to be granted by this Deed of Trust. (b) To the extent permitted by applicable law, the Grantor authorizes the Beneficiary to execute and file such financing statements or continuation statements without the Grantor's signature appearing thereon. The Beneficiary will provide a copy of any such financing statement to the Grantor upon its filing. The Grantor agrees that a carbon, photographic, photostatic or other reproduction of this Deed of Trust or of a financing statement is sufficient as a financing statement. The Grantor constitutes the Beneficiary its attorney-in-fact to execute and file all filings required or so requested for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed; and such power, being coupled with an interest, shall be irrevocable until all the Liens terminate pursuant to Section 7.02. The Grantor will pay the costs of, or incidental to, any recording or filing of any financing or continuation statements or other documents recorded or filed pursuant hereto. (c) The Grantor will not (i) change its name or corporate structure (including its jurisdiction of organization), (ii) change its location (determined as provided in Revised UCC Section 9-307) or (iii) become bound, as provided in Revised UCC Section 9-203(d) or otherwise, by a security agreement entered into by another Person, unless it shall have given the Beneficiary prior notice thereof and delivered an Opinion of Counsel with respect thereto in accordance with Section 6.03(e). (d) Before the applicable UCC Revision Date, the Grantor will not change the location of its chief executive office or chief place of business or the locations 34 38 where it keeps or holds any Trust Property, unless it shall have given the Beneficiary prior notice thereof and delivered an Opinion of Counsel with respect thereto in accordance with Section 6.03(e). It will not in any event change the location of any Trust Property owned by it if such change would cause the Lien on such Trust Property to lapse or cease to be perfected. (e) At least 30 days before it takes any action contemplated by Section 6.03(c) or 6.03(d), the Grantor will, at its expense, cause to be delivered to the Beneficiary an Opinion of Counsel, in form and substance satisfactory to the Beneficiary, to the effect that (i) all financing statements and amendments or supplements thereto, continuation statements and other documents required to be filed or recorded in order to perfect and protect the Liens against all creditors of and purchasers from the Grantor after it takes such action (except any continuation statements specified in such Opinion of Counsel that are to be filed more than six months after the date thereof) have been filed or recorded in each office necessary for such purpose, (ii) all fees and taxes, if any, payable in connection with such filings or recordations have been paid in full and (iii) such action will not materially adversely impair the perfection or priority of the Lien on any Trust Property after it takes such action or the accuracy of the Grantor's representations and warranties herein relating to such Trust Property. (f) The Grantor covenants that it will (i) on or prior to the date hereof, in the case of Equipment now owned by it that is part of the Collateral and which constitute goods in which a security interest is perfected by a notation on the certificate of title or similar evidence of the ownership of such goods ("PLEDGED EQUIPMENT"), and (ii) within 10 days after it acquires any other Pledged Equipment, deliver to the Beneficiary any and all certificates of title, applications for title or similar evidence of ownership of such Equipment and will cause the Beneficiary to be named as lienholder on any such certificate of title or other evidence of ownership. The Grantor will promptly inform the Beneficiary of any additions to or deletions from its Pledged Equipment and will not permit any of its Pledged Equipment to become a fixture to real estate or an accession to any personal property that is not, in either case, included in the Trust Property. ARTICLE 7 MISCELLANEOUS SECTION 7.01. Trustee. (a) The Grantor hereby irrevocably appoints the Trustee to act in that capacity hereunder and the Trustee hereby accepts such appointment. The Grantor hereby irrevocably ratifies and confirms all acts which the Trustee shall lawfully take in accordance with the provisions hereof. 35 39 (b) The Trustee may, at its option, resign as trustee hereunder by notice given to the Beneficiary, and such resignation shall be effective on the earlier to occur of (i) the date which is thirty (30) days after the date on which the Trustee gives such notice to the Beneficiary or (ii) the date on which a successor trustee is appointed by the Beneficiary and accepts such appointment. (c) The Beneficiary may, at its option, with or without cause or notice, remove the Trustee, appoint a successor trustee or appoint an additional trustee or trustees (including a separate trustee for each jurisdiction in which the Trust Property is located) hereunder by an instrument in writing executed and acknowledged by the Beneficiary in compliance with the laws of the State of West Virginia and accepted by such successor or additional trustee and recorded, registered or filed in the real estate records of the jurisdiction in which the Trust Property affected by such instrument is located; and, thereupon, without further act, deed or conveyance, such substitute or additional trustee shall be fully vested with all estate, right, title and interest of its predecessor or co-trustee in, to, under or derived from the Trust Property and all rights, powers, privileges and obligations of such predecessor or co-trustee, with the same effect as if such successor or additional trustee had originally been named as trustee or co-trustee hereunder. The execution, acknowledgment and recording, registration or filing of such an instrument shall be conclusive evidence against the Grantor and all other Persons of the proper removal of the Trustee and substitution or addition of the successor or additional trustee; and, if the Beneficiary or such successor or additional trustee is a corporation, the execution and acknowledgment by an officer of such corporation shall be conclusive evidence against all other Persons of the due authorization, execution and delivery thereof by such corporation. (d) Notwithstanding anything herein to the contrary, the Trustee shall not exercise or waive the exercise of any of its rights, powers or remedies hereunder or otherwise act or refrain from acting hereunder unless directed to do so by the Beneficiary, and the Trustee shall exercise or waive the exercise of any of its rights, powers or remedies hereunder and otherwise act or refrain from acting when and in the manner directed by the Beneficiary, provided that the Trustee (i) shall not be required to follow any direction of the Beneficiary if the Trustee has been advised by counsel that such action would violate applicable law, (ii) shall not be required to expend or risk its own funds or otherwise incur any financial liability in connection with such action if it has reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it, and (iii) shall be entitled to exercise its rights under subsection (e) of this Section without such direction by the Beneficiary. (e) The Trustee shall be entitled to receive, and the Grantor shall pay, reasonable and customary compensation to the Trustee for its services rendered hereunder after any Default and reimbursement to the Trustee for its expenses 36 40 (including reasonable attorneys' fees and expenses) in connection herewith or the exercise of any right, power or remedy hereunder. (f) The Trustee shall not be liable with respect to any act taken or omitted by it in good faith in accordance with any direction of the Beneficiary. Except for willful misconduct or gross negligence, the Trustee shall not be liable (i) in acting upon any direction, demand, request, notice, statement or other document reasonably believed by it in good faith to be genuine and delivered by the Person empowered to do so, (ii) for any error in judgment or mistake of fact or law in good faith, or (iii) for any action taken or omitted by it in accordance with the provisions of this Deed of Trust. The Trustee shall not be responsible to see to the recording, registration or filing of this Deed of Trust or any financing statement relating hereto in any jurisdiction or for the payment of any fees, charges or taxes in connection therewith. No co-trustee hereunder shall be liable for any act or omission of any other co-trustee. (g) All moneys received by the Trustee hereunder shall be held by the Trustee in trust for the purposes for which such moneys were received; and, except as provided herein or under mandatory provisions of applicable law, the Trustee need not segregate such moneys from any other moneys and shall have no liability to pay interest thereon, except such interest as it may actually earn thereon. (h) The Trustee is hereby authorized to act by agent or attorney in the execution of this trust, and it shall not be necessary for the Trustee to be present in person at any foreclosure sale. SECTION 7.02. Release of Trust Property. (a) This Deed of Trust shall cease, terminate and thereafter be of no further force or effect (except as provided in Section 4.02 hereof) in the event all of the Secured Obligations shall have been paid in full and the Grantor shall have performed and observed all of the covenants, obligations and conditions to be performed by the Grantor pursuant to the Credit Documents. Upon such termination and at the Grantor's request and expense, the Beneficiary shall execute and deliver to the Grantor an instrument, in proper form for recording, without warranty, releasing the Lien of this Deed of Trust on the Trust Property. (b) Any termination or release required or permitted under this Section 7.02 or under the Indenture shall be at the Grantor's request and expense and either in the statutory form or in a form reasonably satisfactory to the Beneficiary. SECTION 7.03. Notices. Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: 37 41 (i) if to the Grantor: Century Aluminum of West Virginia, Inc. P.O. Box 98 Ravenswood, West Virginia 26164 (ii) if to the Beneficiary: Wilmington Trust Company, as Collateral Agent Rodney Square North 1100 North Market Street Wilmington, Delaware 19890 Attn: Corporate Trust Department (iii) if to the Trustee: Charles B. Dollison 600 Quarrier Street Charleston, West Virginia 25301 Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. Notwithstanding any provision herein to the contrary, a copy of any notice of trustee's sale under this Deed of Trust shall be served on the Grantor by certified mail, return receipt requested, directed to the Grantor at the above address of the Grantor or such other address given the Beneficiary in writing by the Grantor subsequent to the execution and delivery of this Deed of Trust. A copy of any notice of trustee's sale under this Deed of Trust shall be served by certified mail, return receipt requested, at least twenty (20) days prior to the sale, upon any subordinate lienholder who has previously notified the Beneficiary by certified mail of the existence of the subordinate lien. Any notice of subordinate lien pursuant to West Virginia Code Section 38-1-4 shall be mailed to the above mailing address of the Beneficiary. Nothing in this Section 7.03 shall be construed to permit the Grantor to grant a subordinate lien upon the Trust Property contrary to the provisions of the Indenture. SECTION 7.04. Amendments in Writing. No provision of this Deed of Trust shall be modified, waived or terminated, and no consent to any departure by the Grantor from any provision of this Deed of Trust shall be effective, unless the same shall be by an instrument in writing, signed by the Grantor and the Beneficiary in compliance with all the terms and provisions of the Indenture. Any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. 38 42 SECTION 7.05. Severability. All rights, powers and remedies provided in this Deed of Trust may be exercised only to the extent that the exercise thereof does not violate applicable law, and all the provisions of this Deed of Trust are intended to be subject to all mandatory provisions of applicable law and to be limited to the extent necessary so that they will not render this Deed of Trust illegal, invalid, unenforceable or not entitled to be recorded, registered or filed under applicable law. If any provision of this Deed of Trust or the application thereof to any Person or circumstance shall, to any extent, be illegal, invalid or unenforceable, or cause this Deed of Trust not to be entitled to be recorded, registered or filed, the remaining provisions of this Deed of Trust or the application of such provision to other Persons or circumstances shall not be affected thereby, and each provision of this Deed of Trust shall be valid and be enforced to the fullest extent permitted under applicable law. SECTION 7.06. Binding Effect. (a) The provisions of this Deed of Trust shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns; and all references herein to the "Grantor" and the "Beneficiary" shall include the respective successors and assigns of such parties, and all references to the "Trustee" shall include any successor or additional Trustees appointed under Section 7.01. (b) To the fullest extent permitted under applicable law, the provisions of this Deed of Trust binding upon the Grantor shall be deemed to be covenants which run with the land. (c) Nothing in this Section shall be construed to permit the Grantor to Transfer or grant a Lien upon the Trust Property contrary to the provisions of the Indenture. SECTION 7.07. GOVERNING LAW. THIS DEED OF TRUST SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE LAND AND IMPROVEMENTS ARE LOCATED, EXCEPT AS OTHERWISE REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE WHERE THE LAND AND IMPROVEMENTS ARE LOCATED ARE GOVERNED BY THE LAWS OF SUCH JURISDICTION. 39 43 IN WITNESS WHEREOF, the Grantor has executed and delivered this Deed of Trust as of the day first set forth above. Grantor: [corporate seal] CENTURY ALUMINUM OF WEST VIRGINIA, INC., a Delaware Corporation By: -------------------------------------------- Name: Daniel J. Krofcheck Title: Vice Pres. & Treasurer 40 44 STATE OF NEW YORK, COUNTY OF NEW YORK, to-wit The foregoing instrument was acknowledged before me this 30th day of March, 2001, by Daniel J. Krofcheck, the Vice President and Treasurer of CENTURY ALUMINUM OF WEST VIRGINIA, INC., a Delaware corporation, on behalf of said corporation. My commission expires __________________________ [SEAL] _______________________ Notary Public This instrument was prepared by James P. McIntyre, Esq., Davis Polk & Wardwell, 450 Lexington Avenue, New York, NY 10017 in consultation with counsel in West Virginia. 45 SCHEDULE I Names and Addresses of Secured Parties Beneficiary: Wilmington Trust Company, as Collateral Agent Rodney Square North 1100 North Market Street Wilmington, Delaware 19890 Indenture Trustee: Wilmington Trust Company, as Trustee Rodney Square North 1100 North Market Street Wilmington, Delaware 19890 Initial Noteholders: Credit Suisse First Boston Corporation Eleven Madison Avenue New York, NY 10010-3629 Fleet Securities, Inc. 100 Federal Street Boston, MA 02110 3 EX-4.6 10 y47973ex4-6.txt PLEDGE AND SECURITY AGREEMENT 1 Exhibit 4.6 ========================================================== PLEDGE AND SECURITY AGREEMENT dated as of April 2, 2001 among CENTURY ALUMINUM COMPANY, the other Pledgors party hereto and WILMINGTON TRUST COMPANY, as Collateral Agent for the Trustee and the Holders of Century Aluminum Company's 11-3/4 Senior Secured First Mortgage Notes due 2008 ========================================================== 2 TABLE OF CONTENTS PAGE SECTION 1. Defined Terms...........................................2 SECTION 2. Pledge and Grant of Security Interest...................3 SECTION 3. Security for Obligation.................................4 SECTION 4. Maintaining the Cash Collateral Account.................4 SECTION 5. Delivery of Collateral..................................5 SECTION 6. Liquid Investments......................................6 SECTION 7. Representations and Warranties..........................7 SECTION 8. Further Assurances......................................8 SECTION 9. Covenants...............................................9 SECTION 10. Power of Attorney.....................................10 SECTION 11. No Assumption of Duties; Reasonable Care..............11 SECTION 12. Indemnity.............................................12 SECTION 13. Remedies upon Event of Default........................12 SECTION 14. Expenses..............................................14 SECTION 15. Security Interest Absolute............................14 SECTION 16. Continuing Security Interest; Termination.............15 SECTION 17. Additional Pledgors...................................15 SECTION 18. Successors and Assigns................................16 SECTION 19. Miscellaneous Provisions..............................16 i 3 This COLLATERAL PLEDGE AND SECURITY AGREEMENT (this "PLEDGE AGREEMENT") is made and entered into as of April 2, 2001 by Century Aluminum Company, a Delaware corporation (with its successors, the "COMPANY"), the Guarantors listed on the signature pages hereof (each, together with its successors, a "PLEDGOR" and, collectively with the Company and any other Person that becomes a Pledgor hereunder from time to time pursuant to Section 17, the "PLEDGORS"), in favor of Wilmington Trust Company, a Delaware banking corporation, as trustee (the "TRUSTEE") under the Indenture referred to herein, in its capacity as collateral agent (the "COLLATERAL AGENT") for the Trustee and the holders from time to time (the "HOLDERS") of the Notes (as defined herein), issued by the Company under the Indenture referred to below. WITNESSETH WHEREAS, the Pledgors and the Trustee have entered into that certain indenture dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the "INDENTURE"), pursuant to which the Company is issuing $325,000,000 in aggregate principal amount of 11-3/4% Senior Secured First Mortgage Notes due 2008 (the "NOTES") on the date hereof; WHEREAS, the Pledgors have established an account (the "CASH COLLATERAL ACCOUNT") with Wilmington Trust FSB, at its office at 520 Madison Avenue, New York, New York, Account No. 54772-0, in the name of "Wilmington Trust Company, as Collateral Agent for the benefit of the trustee and holders of the 11-3/4% Senior Secured First Mortgage Notes Due 2008 of Century Aluminum Company Collateral Pledge Account"; WHEREAS, pursuant to the Indenture and the other Security Documents, the Pledgors are required to deposit into the Cash Collateral Account various amounts, including cash proceeds from the sale, lease, transfer, or other disposition, or series of related sales, leases, transfers or other dispositions, of Restricted Assets having an aggregate fair market value (as determined under the Indenture) of $2.5 million or more, and, subject to specified exceptions, any Casualty Proceeds of $2.5 million or more (collectively, the "CASH PROCEEDS"); WHEREAS, to secure the payment and performance of all of its Secured Obligations (as defined herein), the Pledgors have agreed (i) to pledge to the Collateral Agent for the benefit of the Secured Parties (as defined herein), a security interest in the Collateral (as defined herein) and (ii) to execute and deliver this Pledge Agreement; and 1 4 WHEREAS, it is a condition precedent to the initial purchase of the Notes by the initial Holders thereof that each Pledgor shall have granted the security interest and made the pledge contemplated by this Pledge Agreement. NOW, THEREFORE, in consideration of the mutual promises herein contained, and in order to induce the initial Holders of the Notes to purchase the Notes, each Pledgor hereby agrees with the Collateral Agent for the benefit of the Secured Parties, as follows: SECTION 1. Defined Terms.(a) Capitalized terms used and not defined in this Pledge Agreement have the meanings set forth or referred to in the Indenture. (b) Unless otherwise defined herein or in the Indenture, terms used in the UCC (as defined below) and/or in the Federal Book Entry Regulations (as defined below) are used in this Pledge Agreement as such terms are defined in the UCC and/or the Federal Book Entry Regulations. (c) The following terms used herein have the meanings set forth below: "CASH COLLATERAL ACCOUNT" has the meaning assigned to such term in the recitals. "CASH PROCEEDS" has the meaning assigned to such term in the recitals. "COLLATERAL" has the meaning assigned to such term in Section. "FEDERAL BOOK ENTRY REGULATIONS" means the federal regulations contained in Subpart B governing book-entry securities consisting of U.S. Treasury bills, notes and bonds and Subpart D of 31 C.F.R. Part 357, 31 C.F.R. Section 357.2, Section 357.10 through Section 357.14 and Section 357.41 through Section 357.44. "INDENTURE" has the meaning assigned to such term in the recitals. "LIQUID INVESTMENTS" means (i) United States Treasury bills, notes or bonds held in TRADES (or any security entitlement with respect thereto) that mature within six months of their date of acquisition hereunder and (ii) money-market funds, at least 95% of the assets of which are U.S. Government Obligations (or any security entitlement with respect thereto), in each case held by the Collateral Agent in the manner required by Section. "NOTES" has the meaning assigned to such term in the recitals. 2 5 "POST-DEFAULT RATE" means the interest rate owed on any overdue payments of principal or interest on the Notes as provided in each Note. "SECURED OBLIGATIONS" means (a) in the case of the Company, (i) all Obligations under the Notes, (ii) all other amounts now or hereafter payable by the Company hereunder or under the Indenture or any other Security Document, (iii) all other obligations, liabilities, covenants and duties of the Company hereunder and the Indenture or any other Security Document, (b) in the case of each Pledgor other than the Company, the Obligations of such Pledgor under its Note Guaranty and (c) in the case of each Pledgor, any amendments, restatements, renewals, extensions or modifications of any of the foregoing. "SECURED PARTIES" means the Collateral Agent, the Trustee and the Holders. "SECURITY INTERESTS" means the security interests in the Collateral granted hereunder securing the Secured Obligations. "UCC" means the Uniform Commercial Code as in effect in the State of New York; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the Security Interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, "UCC" means the Uniform Commercial Code as in effect in such other jurisdictions for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection. SECTION 2. Pledge and Grant of Security Interest. Each Pledgor hereby pledges to the Collateral Agent for the benefit of the Secured Parties, and hereby grants to the Collateral Agent for the benefit of the Secured Parties, a continuing security interest in and to all of such Pledgor's right, title and interest in and to all of the following, whether now owned or hereafter acquired by such Pledgor, wherever located and whether now or hereafter existing or arising (hereinafter collectively referred to as the "COLLATERAL"), whether characterized as investment property, general intangibles or otherwise: (a) the Cash Collateral Account; (b) all cash, monies, investment property, instruments and financial assets (including without limitation, the Liquid Investments) held in the Cash Collateral Account; (c) all Cash Proceeds, whether or not held in the Cash Collateral Account; 3 6 (d) all dividends, interest, cash, monies and other property from time to time received, receivable or otherwise distributed or distributable in respect of, or in exchange for, any or all such Collateral; and (e) all proceeds of any of the foregoing clauses (a) through (d). SECTION 3. Security for Obligation. This Pledge Agreement and the grant of a security interest in the Collateral hereunder secures the prompt and complete payment and performance by each Pledgor of such Pledgor's Secured Obligations. SECTION 4. Maintaining the Cash Collateral Account. So long as any Secured Obligation shall remain outstanding: (a) Prior to or concurrently with the execution and delivery hereof, the Collateral Agent shall establish the Cash Collateral Account on its books as a separate account segregated from all other custodial or collateral accounts at its office at Wilmington Trust FSB, 520 Madison Avenue, New York, New York, 10022, Attention: Corporate Trustee Department. The Company and the Collateral Agent will maintain the Cash Collateral Account as a securities account with Wilmington Trust FSB in the State of New York. (b) Except as otherwise provided by the provisions of Section 13 and Section 16, no amount shall be paid or released to or for the account of, or withdrawn by or for the account of, any Pledgor or any other Person from the Cash Collateral Account. (c) The Cash Collateral Account shall be subject to such applicable laws, and such applicable regulations of the Board of Governors of the Federal Reserve System and of any other appropriate banking or governmental authority, as may now or hereafter be in effect. (d) Subject to the other terms and conditions of this Pledge Agreement, all funds or other property held by the Collateral Agent pursuant to this Pledge Agreement shall be held in the Cash Collateral Account subject to the exclusive dominion and control of the Collateral Agent and exclusively for the ratable benefit of the Secured Parties and, to the extent required by applicable law to ensure perfection of the Security Interest on a first priority basis, segregated from all other funds or other property otherwise held by the Collateral Agent. (e) Nothing contained in this Pledge Agreement shall (i) afford any Pledgor any right to issue entitlement orders with respect to any of the security entitlements constituting Collateral or any securities account in which any such 4 7 security entitlement may be carried, or otherwise afford any Pledgor control of any such security entitlement or securities account or (ii) otherwise give rise to any rights of Pledgor with respect to such security entitlements or any securities account in which any such security entitlement may be carried, other than each Pledgor's rights under this Pledge Agreement as the beneficial owner of Collateral pledged to and subject to the exclusive dominion and control of the Collateral Agent in its capacity as such (and not as a securities intermediary). Each Pledgor acknowledges, confirms and agrees that the Collateral Agent is an entitlement holder of the Collateral solely as Collateral Agent and not as a securities intermediary. SECTION 5. Delivery of Collateral. All Cash Proceeds or other amounts required to be delivered to the Collateral Agent pursuant to the Indenture (including without limitation Section 11.03 thereof) or any Security Document, including this Pledge Agreement, shall be deposited in the Cash Collateral Account. (b) All cash, certificates or instruments representing or evidencing the Collateral shall be delivered to and held by or on behalf of the Collateral Agent in the State of New York pursuant hereto and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent. The Collateral Agent shall have the right, at any time in its discretion and without notice to any Pledgor, to transfer to or to register in the name of the Collateral Agent or any of its nominees any or all of the Collateral. In addition, the Collateral Agent shall have the right at any time to exchange certificates or instruments representing or evidencing any or all of the Collateral for certificates or instruments of smaller or larger denominations. Also, the Collateral Agent shall have the right at any time to convert Collateral consisting of financial assets credited to the Cash Collateral Account to Collateral consisting of financial assets held directly by the Collateral Agent, and to convert Collateral consisting of financial assets held directly by the Collateral Agent to Collateral consisting of financial assets credited to the Cash Collateral Account. (c) With respect to any Collateral in which any Pledgor has any right, title or interest and that constitutes an uncertificated security, such Pledgor shall cause the issuer thereof to register the Collateral Agent as the registered owner of such security. (d) With respect to any Collateral in which any Pledgor has any right, title or interest and that constitutes a security entitlement, such Pledgor shall cause the securities intermediary with respect to such security entitlement to identify in 5 8 its records the Collateral Agent as the entitlement holder of such security entitlement against such securities intermediary. (e) With respect to any Collateral that constitutes a securities account, each Pledgor will comply with Section with respect to all security entitlements carried in such securities account. (f) Upon transfer of any financial assets to the Cash Collateral Account, the Collateral Agent shall make appropriate book entries indicating that such assets have been credited to the Cash Collateral Account. (g) Any income received by the Collateral Agent with respect to the balance from time to time standing to the credit of the Cash Collateral Account, including any interest or capital gains on Liquid Investments, shall remain, or be deposited, in the Cash Collateral Account. All right, title and interest in and to the cash amounts on deposit from time to time in the Collateral Account together with any Liquid Investments from time to time made pursuant to Section hereof shall vest in the Collateral Agent, shall constitute part of the Collateral hereunder and shall not constitute payment of the Secured Obligations until applied thereto as hereinafter provided. (h) Concurrently with the execution and delivery of this Pledge Agreement, the Collateral Agent shall deliver a certificate of an officer of the Collateral Agent, confirming the Collateral Agent's establishment and separate maintenance of the Cash Collateral Account, all in accordance with this Pledge Agreement. SECTION 6. Liquid Investments. Amounts on deposit in the Collateral Account shall be invested and re-invested from time to time in Liquid Investments pursuant to Section, which Liquid Investments shall be held in the name and be under the control of the Collateral Agent pursuant to the provisions of Section, provided that, if an Event of Default has occurred and is continuing, the Collateral Agent shall, if instructed by the Trustee, liquidate any such Liquid Investments and apply or cause to be applied the proceeds thereof to the payment of the Secured Obligations in the manner specified in Section. (b) Not later than three Business Day after any receipt by the Collateral Agent of cash (whether Cash Proceeds or as proceeds of any Liquid Investments or other Collateral) for deposit in the Cash Collateral Account, the Collateral Agent shall invest such funds in the Wilmington U.S. Government Portfolio/Service Class Shares; provided that, if, prior to the time of such investment, the Collateral Agent receives an Officers' Certificate from the Company specifying an alternative Liquid Investment, the Collateral Agent shall 6 9 invest such cash in the specified Liquid Investment promptly, but in any event within two Business Days after receipt of such notice. SECTION 7. Representations and Warranties. Each Pledgor, jointly and severally, hereby represents and warrants that: (a) The execution and delivery by each Pledgor of, and the performance by such Pledgor of its obligations under, this Pledge Agreement will not (1) contravene (A) any provision of applicable law, (B) the certificate of incorporation or by-laws (or other organizational documents in the case of any non-corporate Pledgor) of any Pledgor, (C) any agreement or other instrument binding upon any Pledgor or any of its subsidiaries or (D) any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any of its subsidiaries, except, in the case of (C) and (D), for contraventions that would not have a material adverse effect on the Company and its subsidiaries taken as a whole or the Security Interest in the Collateral or (2) result in the creation or imposition of any Lien on any assets of any Pledgor, except for the security interests granted under this Pledge Agreement. (b) No consent, approval, authorization, order of, action by notice to, filing or qualification with, any governmental authority, regulatory body, agency or other Person is required for (i) the execution, delivery or performance by any Pledgor of its obligations under this Pledge Agreement, (ii) the grant by any Pledgor of the Security Interest, (iii) the perfection or maintenance of the Security Interest (including the first priority nature of such Security Interest) or (iv) the exercise by the Collateral Agent of its voting or other rights provided for in this Pledge Agreement or the remedies in respect of the Collateral pursuant to this Pledge Agreement, except as may be required in connection with the disposition of any portion of the Collateral by laws affecting the offering and sale of securities generally. (c) Each Pledgor is the beneficial owner of the Collateral pledged by it hereunder, free and clear of any Lien, claim, option or right of any Person (except for the Security Interests and any Permitted Encumbrances). No financing statement or instrument similar in effect covering all or any part of such Collateral is on file in any public or recording office, other than any financing statements filed from time to time pursuant to this Pledge Agreement and the other Security Documents. (d) This Pledge Agreement has been duly authorized, validly executed and delivered by each Pledgor and constitutes a valid and binding agreement of such Pledgor, enforceable against such Pledgor in accordance with its terms, except as (i) the enforceability hereof may be limited by bankruptcy, insolvency 7 10 or similar laws now or hereafter in effect relating to or affecting creditors' rights or remedies generally (regardless of whether considered in an action at law or in equity) and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability. (e) Assuming compliance by the Collateral Agent with its agreements hereunder, the pledge and grant by each Pledgor of a Security Interest in the Collateral pursuant to this Pledge Agreement for the ratable benefit of the Secured Parties will constitute a valid and perfected first-priority security interest in such Collateral, securing the payment of the Secured Obligations of such Pledgor, enforceable as such against all creditors of such Pledgor (and any persons purporting to purchase any of the Collateral from such Pledgor), subject to no other Liens other than Permitted Encumbrances. (f) There are no legal or governmental proceedings pending or, to each Pledgor's knowledge, threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any such subsidiary is subject that would materially adversely affect the power (corporate or otherwise) or ability of any Pledgor to perform its obligations under this Pledge Agreement or to consummate the transactions contemplated hereby. (g) The pledge of the Collateral pursuant to this Pledge Agreement is not prohibited by law or governmental regulation (including, without limitation, Regulations G, T, U and X of the Board of Governors of the Federal Reserve System) applicable to any Pledgor. (h) No Event of Default has occurred and is continuing. (i) The jurisdiction (for purposes of Section 8-110(e) of the UCC and 31 CFR Section 357.11(b))) of the securities intermediary that maintains the Cash Collateral Account and all securities accounts carrying the Collateral is New York. SECTION 8. Further Assurances. Each Pledgor agrees that from time to time, at its own expense, such Pledgor will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or required by applicable law or that the Collateral Agent may reasonably request, in order to perfect and protect the Security Interest granted or purported to be granted hereby or to enable the Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, each Pledgor will: (i) if any Collateral shall be evidenced by a promissory note or other instrument, deliver and pledge to the Collateral Agent hereunder such note or instrument, duly indorsed and accompanied by duly executed instruments of transfer or assignment, all in form 8 11 and substance satisfactory to the Collateral Agent; (ii) execute and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be necessary or required by applicable law or as the Collateral Agent may reasonably request, in order to perfect and preserve the Security Interest granted or purported to be granted hereby; (iii) deliver and pledge to the Collateral Agent for the benefit of the Secured Parties certificates representing Collateral that constitutes certificated securities, accompanied by undated stock or bond powers executed in blank; and (iv) deliver to the Collateral Agent evidence that all other action that the Collateral Agent may deem reasonably necessary or desirable in order to perfect and protect the security interest created by Pledgor under this Pledge Agreement has been taken. (b) Each Pledgor hereby authorizes the Collateral Agent to file one or more financing or continuation statements, and amendments thereto, relating to all or any part of the Collateral without the signature of such Pledgor where permitted by law. The Collateral Agent shall notify the applicable Pledgor of the filing of any such financing statement and provide a copy to such Pledgor upon filing. A photocopy or other reproduction of this Pledge Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law. (c) Each Pledgor will furnish to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Collateral Agent may reasonably request, all in reasonable detail. (d) The Company will promptly pay all reasonable costs incurred in connection with any of the foregoing within 30 days of receipt of an invoice therefor. Each Pledgor also agrees, whether or not requested by the Collateral Agent, to take all actions that are necessary to perfect or continue the perfection of, or to protect the first priority of, the Collateral Agent's Security Interest in and to the Collateral, including the filing of all necessary financing and continuation statements, and to protect the Collateral against the rights, claims or interests of third persons (other than any such rights, claims or interests created by or arising through the Collateral Agent). SECTION 9. Covenants. Each Pledgor covenants and agrees with the Collateral Agent for the benefit of the Secured Parties that, from and after the date of this Pledge Agreement until the payment in full in cash of all Obligations due and owing under the Indenture and the Notes, it will not: (i) sell or otherwise dispose of, and will not purport to sell or otherwise dispose of, or grant any option or warrant with respect to, any of 9 12 \the Collateral or its beneficial interest therein, except for any disposition permitted by Section 11.02 and Section 11.03 of the Indenture; (ii) create or permit to exist any Lien or other adverse interest in or with respect to its beneficial interest in any of the Collateral (except for the Security Interests and any Permitted Encumbrance); (iii) enter into any agreement or understanding that restricts or inhibits or purports to restrict or inhibit the Collateral Agent's rights or remedies hereunder, including, without limitation, the Collateral Agent's right to sell or otherwise dispose of the Collateral; or (iv) fail to pay or discharge any tax, assessment or levy of any nature with respect to its beneficial interest in the Collateral not later than five days prior to the date of any proposed sale under any judgment, writ or warrant of attachment with respect to such beneficial interest. SECTION 10. Power of Attorney. Each Pledgor hereby appoints and constitutes the Collateral Agent as such Pledgor's attorney-in-fact (with full power of substitution), with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, from time to time in the Collateral Agent's discretion to take any action and to execute any instrument that is necessary or advisable or as the Collateral Agent may deem necessary or advisable to accomplish the purposes of this Pledge Agreement, including, without limitation: (a) to ask for, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in respect of any of the Collateral, (b) to receive, indorse and collect any drafts or other instruments, documents and chattel paper, in connection with clause (a) above, (c) to file any claims or take any action or institute any proceedings that the Collateral Agent may deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of the Collateral Agent with respect to any of the Collateral, and (d) to pay or discharge taxes or Liens levied or placed upon the Collateral that such Pledgor has failed to pay or discharge in accordance herewith, the legality or validity thereof and the amounts necessary to discharge the same to be determined by the Collateral Agent in its sole reasonable discretion, and such payments made by the Collateral Agent to become part of the Secured Obligations 10 13 of such Pledgor to the Collateral Agent, due and payable immediately upon demand; provided, however, that the Collateral Agent shall have no obligation to perform any of the foregoing actions. The Collateral Agent's authority under this Section shall include, without limitation, the authority to indorse and negotiate any checks or instruments representing proceeds of Collateral in the name of such Pledgor, execute and give receipt for any certificate of ownership or any document constituting Collateral, transfer title to any item of Collateral, sign such Pledgor's name on all financing statements (to the extent permitted by applicable law) or any other documents deemed necessary or appropriate by the Collateral Agent to preserve, protect or perfect the security interest in the Collateral and to file the same, prepare, file and sign such Pledgor's name on any notice of Lien, and to take any other actions arising from or incident to the powers granted to the Collateral Agent in this Pledge Agreement. This power of attorney is coupled with an interest and is irrevocable by the Pledgors. SECTION 11. No Assumption of Duties; Reasonable Care. The rights and powers conferred on the Collateral Agent hereunder are solely to preserve and protect the Security Interest of the Secured Parties in and to the Collateral granted hereby and shall not be interpreted to, and shall not impose any duties on the Collateral Agent in connection therewith other than those expressly provided herein or imposed under applicable law. Except as provided by applicable law or by the Indenture, the Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the Collateral Agent accords similar property held by the Collateral Agent for its own account, it being understood that the Collateral Agent in its capacity as such shall not have any responsibility for (a) ascertaining or taking action with respect to calls, conversions, exchanges, maturities or other matters relative to any Collateral, whether or not the Collateral Agent has or is deemed to have knowledge of such matters, (b) taking any necessary steps to preserve rights against any parties with respect to any Collateral or (c) investing or reinvesting any of the Collateral or any loss on any investment. The Collateral Agent shall not be responsible for the sufficiency of the Collateral or this Pledge Agreement and shall be entitled to all the rights, benefits, privileges and immunities accorded to the Trustee under Article 7 of the Indenture. SECTION 12. Indemnity. Each Pledgor, jointly and severally, shall indemnify, hold harmless and defend the Collateral Agent and its directors, officers, agents and employees, from and against, and shall pay on demand any and all claims, actions, obligations, losses, liabilities and expenses, including reasonable defense costs, reasonable investigative fees and costs, and reasonable 11 14 legal fees, costs and damages arising from the Collateral Agent's performance as Collateral Agent under this Pledge Agreement, except to the extent that such claim, action, obligation, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such indemnified person's negligence or willful misconduct. This indemnification shall survive the termination of this Pledge Agreement. SECTION 13. Remedies upon Event of Default. If any Event of Default shall have occurred and be continuing: (a) The Collateral Agent and the other Secured Parties may exercise, in addition to all other rights and remedies given by law or by this Pledge Agreement or the Indenture, all of the rights and remedies with respect to the Collateral of a secured party under the UCC (whether or not the UCC applies to the affected Collateral) and also may require the Pledgors to, and each Pledgor hereby agrees that it will at its expense and upon request of the Collateral Agent forthwith, assemble all or part of the Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a place and time to be designated by the Collateral Agent that is reasonably convenient to both parties and (ii) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at any broker's board or at public or private sale, in one or more sales or lots, at any of the Collateral Agent's offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Collateral Agent may deem commercially reasonable. Each Pledgor agrees that, to the extent notice of sale shall be required by law, at least ten days' notice to such Pledgor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been given, the Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. The purchaser of any or all Collateral so sold shall thereafter hold the same absolutely, free from any claim, encumbrance or right of any kind whatsoever created by or through such Pledgor. Any sale of the Collateral conducted in conformity with reasonable commercial practices of banks, insurance companies, commercial-finance companies, or other financial institutions disposing of property similar to the Collateral shall be deemed to be commercially reasonable. The Collateral Agent and the other Secured Parties may, in their own name or in the name of a designee or nominee, buy any of the Collateral at any public sale and, if permitted by applicable law, at any private sale. All expenses (including court costs and reasonable attorneys' fees, expenses and disbursements) of, or incident to, the enforcement of any of the provisions 12 15 hereof shall be recoverable from the proceeds of the sale or other disposition of the Collateral. (b) The proceeds of any sale of, or other realization upon, all or any part of the Collateral pursuant to this Section and any cash held in the Cash Collateral Account at such time shall be applied by the Collateral Agent in the following order of priorities: (i) First: to the payment of all expenses of such sale, including compensation of the Collateral Agent or such other Person conducting such sale, and attorneys' fees and expenses incurred by such Person, together with interest on any such expenses paid by such Person at the Post-Default Rate from the date paid by such Person through the date repaid to such Person; (ii) Second: to the payment of the expenses and other amounts payable under Section ; and (iii) Third: to the Trustee to be held, applied and disbursed in accordance with Section 6.10 of the Indenture. (c) The Collateral Agent may, without notice to the Pledgors except as required by law and at any time or from time to time, charge, set-off and otherwise apply all or any part of the Secured Obligations against the Cash Collateral Account or any part thereof. (d) Each Pledgor further agrees to use its reasonable best efforts to do or cause to be done all such other acts as may be necessary to make any disposition any portion of the Collateral pursuant to this Section valid and binding and in compliance with any and all other applicable requirements of law. Each Pledgor further agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to the Collateral Agent and the other Secured Parties, that the Collateral Agent and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section shall be specifically enforceable against each Pledgor, and, to the extent permitted by law, each Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants, except for a defense that no Event of Default has occurred and is continuing. (e) Each Pledgor acknowledges the impossibility of ascertaining the amount of damages that would be suffered by the Collateral Agent and the other Secured Parties by reason of the failure by such Pledgor to perform any of the 13 16 covenants contained in this Section 13 and, consequently, agrees that, if such Pledgor shall fail to perform any of such covenants, it will pay, as liquidated damages and not as a penalty, an amount equal to the value of the Collateral on the date the Collateral Agent shall demand compliance with this Section 13. SECTION 14. Expenses. Each Pledgor, jointly and severally, agrees that it will, upon demand, pay to the Collateral Agent the amount of any and all reasonable and duly documented expenses, including, without limitation, the reasonable fees, expenses and disbursements of counsel, experts and agents retained by the Collateral Agent, that the Collateral Agent may incur in connection with (a) the administration of this Pledge Agreement, (b) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, (c) the exercise or enforcement of any of the rights of the Collateral Agent or the other Secured Parties hereunder and (d) the failure by any Pledgor to perform or observe any of the provisions hereof. SECTION 15. Security Interest Absolute. All rights of the Collateral Agent and the other Secured Parties and the pledges, assignments and security interests hereunder, and all obligations of the Pledgors hereunder, shall be irrevocable, absolute and unconditional irrespective of and each Pledgor hereby irrevocably waives (to the maximum extent permitted by applicable law) any defenses it may now have or may hereafter acquire in any way relating to, any or all of the following: (a) any lack of validity or enforceability of the Indenture or Notes or any other agreement or instrument relating thereto; (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Indenture or Notes or any other agreement or instrument relating thereto; (c) any taking, exchange, surrender, release or non-perfection of any Liens on any Collateral or any other collateral for all or any of the Secured Obligations; (d) any manner of application of any Collateral or any other collateral, or proceeds thereof, to all or any of the Secured Obligations, or any manner of sale or other disposition of any Collateral or any other collateral for all or any of the Secured Obligations or any other assets of such Pledgor; (e) any change, restructuring or termination of the corporate structure or existence of such Pledgor; or 14 17 (f) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by the Collateral Agent, the Trustee, any Holder of the Notes or any other Person, which might otherwise constitute a defense available to, or a discharge of, any Pledgor in respect of the Secured Obligations or of this Pledge Agreement. SECTION 15. Continuing Security Interest; Termination. This Pledge Agreement shall create a continuing security interest in and to the Collateral and shall, unless otherwise provided in this Pledge Agreement or the Indenture, remain in full force and effect until the payment in full in cash of the Secured Obligations. (b) Upon the consummation of any sale, transfer or other disposition of Collateral that is permitted by Section 11.02 and 11.03 of the Indenture, the Collateral Agent shall release the applicable Collateral (but not any proceeds thereof) to be sold, transferred or disposed of. Any such release shall not require the consent of any Holder of the Notes. If immediately available cash on deposit in the Collateral Account is not sufficient to make any distribution to the Company referred to in the previous sentence, the Collateral Agent shall liquidate as promptly as practicable Liquid Investments as required to obtain sufficient cash to make such distribution and, notwithstanding any other provision of this section, such distribution (other than the distribution of any immediately available cash then on deposit) shall not be made until such liquidation has taken place. (c) In connection with any release of Collateral, the Company shall comply with Section 11.02 and Section 11.03 of the Indenture. SECTION 17. Additional Pledgors. If a newly acquired or created Domestic Restricted Subsidiary provides a Note Guaranty pursuant to Section 4.11 of the Indenture or any Subsidiary that is not a party hereto becomes the owner of any Collateral required to be held in the Cash Collateral Account, such Person shall immediately become a party hereto by signing and delivering to the Collateral Agent a Pledge Agreement Supplement, substantially in the form of Exhibit A, whereupon such Subsidiary shall become a "Pledgor" as defined herein. SECTION 18. Successors and Assigns. This Pledge Agreement shall be binding upon each Pledgor, its transferees, successors and assigns, and shall inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent and the other Secured Parties and their respective successors, transferees and assigns. 15 18 SECTION 19. Miscellaneous Provisions. (a) Notices. Any notice or communication given hereunder shall be sufficiently given if in writing and delivered in person or mailed by first class mail or facsimile, addressed as follows or to such other address as shall be designated by any party in a written notice to the other party hereto: IF TO THE PLEDGORS: Century Aluminum Company 2511 Garden Road Building A Suite 200 Monterey, CA 93940 Fax: (831) 642-9080 Attention: Chief Financial Officer IF TO THE COLLATERAL AGENT: Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, Delaware 19890 Attn: Corporate Trust Department Fax: (302) 651-8584 All such notices and other communications shall be deemed given if in writing (i) when delivered in person, (ii) five days after mailing when mailed by first class mail or (iii) when sent by facsimile transmission, with transmission confirmed. Any notice to the Collateral Agent will be effective only upon receipt. (b) No Adverse Interpretation of Other Agreements. This Pledge Agreement may not be used to interpret another pledge, security or debt agreement of any Pledgor or any subsidiary thereof. No such pledge, security or debt agreement (other than the Indenture) may be used to interpret this Pledge Agreement. (c) Severability. The provisions of this Pledge Agreement are severable, and if any clause or provision shall be held invalid, illegal or unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall affect in that jurisdiction only such clause or provision, or part thereof, and shall not in any manner affect such clause or provision in any other jurisdiction or any other clause or provision of this Pledge Agreement in any jurisdiction. (d) Table of Contents and Headings. The Table of Contents and headings of the Sections of this Pledge Agreement have been inserted for 16 19 convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. (e) Counterparts. This Pledge Agreement may be signed in two or more counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same agreement. (f) Benefits of Pledge Agreement. Nothing in this Pledge Agreement, express or implied, shall give to any person, other than the parties hereto and their successors hereunder, and the Trustee and the Holders of the Notes, any benefit or any legal or equitable right, remedy or claim under this Pledge Agreement. (g) Amendments, Waiver and Consents. Any amendment or waiver of any provision of this Pledge Agreement and any consent to any departure by any Pledgor from any provision of this Pledge Agreement shall be effective only if in writing, signed by the Collateral Agent and made or duly given in compliance with all of the terms and provisions of the Indenture, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. None of the Collateral Agent or any other Secured Party shall be deemed, by any act, delay, indulgence, omission or otherwise, to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the terms and conditions hereof. Failure of the Collateral Agent or any other Secured Party to exercise, in whole or in part, or delay in exercising, any right, power or privilege hereunder shall not preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Collateral Agent or any other Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that the Collateral Agent or any other Secured Party would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law. (h) Interpretation of Agreement. To the extent a term or provision of this Pledge Agreement conflicts with the Indenture, the Indenture shall control with respect to the subject matter of such term or provision. Acceptance of or acquiescence in a course of performance rendered under this Pledge Agreement shall not be relevant to determine the meaning of this Pledge Agreement even though the accepting or acquiescing party had knowledge of the nature of the performance and opportunity for objection. (i) Authority of the Collateral Agent. The Collateral Agent shall have and be entitled to exercise all powers hereunder that are specifically granted to the Collateral Agent by the terms hereof, together with such powers as are 17 20 reasonably incident thereto. The Collateral Agent may perform any of its duties hereunder or in connection with the Collateral by or through agents or employees and shall be entitled to retain counsel and to act in reliance upon the advice of counsel concerning all such matters. Except as otherwise expressly provided in this Pledge Agreement or the Indenture, neither the Collateral Agent nor any director, officer, employee, attorney or agent of the Collateral Agent shall be liable to any Pledgor for any action taken or omitted to be taken by the Collateral Agent, in its capacity as Collateral Agent, hereunder, except for its own negligence or willful misconduct, and the Collateral Agent shall not be responsible for the validity, effectiveness or sufficiency hereof or of any document or security furnished pursuant hereto. The Collateral Agent and its directors, officers, employees, attorneys and agents shall be entitled to rely on any communication, instrument or document believed by it or them to be genuine and correct and to have been signed or sent by the proper Person or Persons. (ii) Each Pledgor acknowledges that the rights and responsibilities of the Collateral Agent under this Pledge Agreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Pledge Agreement shall, as between the Collateral Agent and the other Secured Parties, be governed by the Indenture and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and the Pledgors, the Collateral Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and the Pledgors shall not be obligated or entitled to make any inquiry respecting such authority. (j) Appointment of Co-Agents. At any time or times, in order to comply with any legal requirement in any jurisdiction, the Collateral Agent may appoint another bank or trust company or one or more other persons (provided that, unless such approval would impair the perfection of the Lien purported to be granted hereunder, the bank or trust company or person or persons appointed shall be approved by the Company, which approval shall not unreasonably withheld), either to act as co-agent or co-agents, jointly with the Collateral Agent, or to act as separate agent or agents on behalf of the Secured Parties with such power and authority as may be necessary for the effectual operation of the provisions hereof and may be specified in the instrument of appointment (which may, in the discretion of the Collateral Agent, include provisions for the protection of such co-agent or separate agent similar to the provisions of Section 12 and Section 14). Any such co-agent or separate agent shall agree in writing to comply with all of 18 21 the obligations of the Collateral Agent hereunder applicable to the power and authority it is granted by the Collateral Agent pursuant to this clause (j). (k) Rights of Holders of the Notes. No Holder of Notes shall have any independent rights hereunder other than those rights granted to individual Holders of the Notes pursuant to Section 6.06 of the Indenture; provided that nothing in this subsection shall limit any rights granted to the Trustee under the Notes or the Indenture. (l) Governing Law; Submission to Jurisdiction; Waiver of Damages and Bonds. (i) This Pledge Agreement shall be governed by and construed in accordance with the laws of the State of New York, except as otherwise required by mandatory provisions of law (whether under the UCC as in effect in the State of New York or the Federal Book Entry Regulations) and except to the extent that remedies provided by the laws of any jurisdiction other than the State of New York are governed by the laws of such jurisdiction. (ii) Each Pledgor hereby agrees to submit to the jurisdiction of any state or Federal court located in the Borough of Manhattan, City of New York. (iii) Each Pledgor agrees that it will not assert any counterclaims, setoffs or crossclaims in any proceeding brought by the Collateral Agent to realize on such property or to enforce a judgment or other court order in favor of the Collateral Agent, except for such counterclaims, setoffs or crossclaims which, if not asserted in any such proceeding, could not otherwise be brought or asserted. (iv) Each Pledgor waives any objection that it may have to the location of a court in The City of New York once the Collateral Agent has commenced a proceeding described in this Section 19(l) including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens. (v) Each Pledgor agrees that no Holder of Notes or (except as otherwise provided in this Pledge Agreement or the Indenture) the Collateral Agent or the Trustee in their respective capacities as such shall have any liability to such Pledgor (whether arising in tort, contract or otherwise) for losses suffered by such Pledgor in connection with, arising out of, or in any way related to, the transactions contemplated and the relationship established by this Pledge Agreement, or any act, omission or event occurring in connection therewith, except that the Collateral Agent shall be liable if it is 19 22 determined by a final and nonappealable judgment of a court that is binding on the Collateral Agent that such losses were the result of acts or omissions on the part of the Collateral Agent constituting bad faith, gross negligence (unless otherwise required by the Trust Indenture Act) or willful misconduct. (vi) To the extent permitted by applicable law, each Pledgor waives the posting of any bond otherwise required of the Collateral Agent or any other Secured Party in connection with any judicial process or proceeding to enforce any judgment or other court order pertaining to this Pledge Agreement or any related agreement or document entered in favor of any Secured Party or to enforce by specific performance, temporary restraining order or preliminary or permanent injunction this Pledge Agreement or any related agreement or document between the Pledgors on the one hand and the Secured Parties on the other hand. 20 23 IN WITNESS WHEREOF, each Pledgor and the Collateral Agent have each caused this Pledge Agreement to be duly executed and delivered as of the date first above written. (i) PLEDGORS: CENTURY ALUMINUM COMPANY By: -------------------------------------- Name: Title: CENTURY ALUMINUM OF WEST VIRGINIA, INC. By: --------------------------------------- Name: Title: BERKELEY ALUMINUM, INC. By: --------------------------------------- Name: Title: CENTURY KENTUCKY, INC. By: -------------------------------------- Name: Title: VIRGIN ISLANDS ALUMINA CORPORATION, LLC. By: ------------------------------------- Name: 21 24 Title: METALSCO LTD. By: -------------------------------------- Name: Title: SKYLINER, INC. By: -------------------------------------- Name: Title: NSA, LTD. By: --------------------------------------- Name: Title: COLLATERAL AGENT: WILMINGTON TRUST COMPANY By: --------------------------------------- Name: Title: 25 EXHIBIT A PLEDGE AGREEMENT SUPPLEMENT PLEDGE AGREEMENT SUPPLEMENT dated as of _______, ____, between [Name of New Pledgor] (the "NEW PLEDGOR") and Wilmington Trust Company, as Collateral Agent. WHEREAS, Century Aluminum Company, the other Pledgors party thereto and Wilmington Trust Company, as Collateral Agent, are parties to a Pledge and Security Agreement dated as of April 2, 2001 (as heretofore amended and/or supplemented, the "PLEDGE AGREEMENT") under which Century Aluminum Company and the other Pledgors secures certain obligations; WHEREAS, [name of New Pledgor] is required to become a party to the Security Agreement as a Pledgor thereunder; and WHEREAS, terms defined in the Pledge Agreement (or whose definitions are incorporated by reference in Section 1 of the Pledge Agreement) and not otherwise defined herein have, as used herein, the respective meanings provided for therein; NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1. Party to the Pledge Agreement. The New Pledgor acknowledges that, by signing this Pledge Agreement Supplement and delivering it to the Collateral Agent, the New Pledgor becomes a "Pledgor" for all purposes of the Pledge Agreement and will thereafter have all the rights and obligations of a Pledgor thereunder and be bound by all the provisions thereof as fully as if the New Pledgor were one of the original parties thereto. SECTION 2. Pledge and Grant of Security Interest. In order to secure the Secured Obligations, the New Pledgor grants to the Collateral Agent for the benefit of the Secured Parties a continuing security interest in and to all of such Pledgor's right, title and interest in and to all of the following, whether now owned or hereafter acquired by such Pledgor, wherever located and whether now or hereafter existing or arising (hereinafter collectively referred to as the "NEW COLLATERAL"), whether characterized as investment property, general intangibles or otherwise: 2 26 (a) the Cash Collateral Account; (b)all cash, monies, investment property, instruments and financial assets (including without limitation, the Liquid Investments) held in the Cash Collateral Account; (c) all Cash Proceeds, whether or not held in the Cash Collateral Account; (d) all dividends, interest, cash, monies and other property from time to time received, receivable or otherwise distributed or distributable in respect of, or in exchange for, any or all such Collateral; and (e) all proceeds of any of the foregoing clauses (a) through (d). SECTION 3. Delivery of Collateral. Concurrently with delivering this Pledge Agreement Supplement to the Administrative Agent, the New Pledgor is complying with the provisions of Section 5 of the Security Agreement with respect to any New Collateral owned by it on the date hereof. SECTION 4. Representations and Warranties. Each of the representations and warranties set forth in Section 7 of the Pledge Agreement is true as applied to the New Pledgor and the New Collateral on the date hereof. For purposes of the foregoing sentence, references in said Sections to a "Pledgor" shall be deemed to refer to the New Pledgor and references to "Collateral" shall be deemed to refer to the New Collateral. SECTION 5. Governing Law. This Pledge Agreement Supplement shall be construed in accordance with and governed by the laws of the State of New York. 3 27 IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement Supplement to be duly executed by their respective authorized officers as of the day and year first above written. [NAME OF NEW PLEDGOR] By: --------------------------------------- Name: Title: WILMINGTON TRUST COMPANY, as Collateral Agent By: --------------------------------------- Name: Title: 4 EX-4.7 11 y47973ex4-7.txt CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT 1 Exhibit 4.7 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT BY AND BETWEEN CENTURY ALUMINUM COMPANY AND GLENCORE AG Dated as of March 30, 2001 2 TABLE OF CONTENTS
PAGE ARTICLE I CERTAIN DEFINITIONS..........................................................................1 Section 1.1 Certain Definitions....................................................................1 ARTICLE II PURCHASE OF SHARES..........................................................................2 Section 2.1 Purchase of Shares; Closing............................................................2 ARTICLE III REPRESENTATIONS AND WARRANTIES.............................................................3 Section 3.1 Representations and Warranties of the Company..........................................3 Section 3.2 Representations and Warranties of the Purchaser........................................6 ARTICLE IV OTHER AGREEMENTS OF THE PARTIES.............................................................8 Section 4.1 Transfer Restrictions..................................................................8 Section 4.2 Furnishing of Information..............................................................9 Section 4.3 Notice of Certain Events...............................................................9 Section 4.4 Blue Sky Laws..........................................................................9 Section 4.5 Integration............................................................................9 Section 4.6 Filing of Reports......................................................................9 Section 4.7 Furnishing of Rule 144A Materials......................................................9 Section 4.8 Solicitation Materials................................................................10 Section 4.9 Matters Affecting Purchaser's Rights..................................................10 Section 4.10 HSR Act Filings......................................................................10 ARTICLE V CONDITIONS PRECEDENT TO CLOSING.............................................................10 Section 5.1 Conditions Precedent to Obligations of the Purchaser..................................10 Section 5.2 Conditions Precedent to Obligations of the Company....................................11 ARTICLE VI TERMINATION................................................................................12 Section 6.1 Termination by Mutual Consent.........................................................12 Section 6.2 Termination by the Company or the Purchaser...........................................12 ARTICLE VII MISCELLANEOUS.............................................................................12 Section 7.1 Fees and Expenses.....................................................................12 Section 7.2 Entire Agreement......................................................................13 Section 7.3 Notices...............................................................................13 Section 7.4 Indemnification.......................................................................14 Section 7.5 Arbitration...........................................................................14 Section 7.6 Amendments; Waivers...................................................................14 Section 7.7 Headings..............................................................................14 Section 7.8 Successors and Assigns................................................................14 Section 7.9 No Third Party Beneficiaries..........................................................14 Section 7.10 Governing Law........................................................................14 Section 7.11 Survival.............................................................................15 Section 7.12 Counterpart Signatures...............................................................15
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Section 7.13 Publicity............................................................................15 Section 7.14 Severability.........................................................................15 Section 7.15 Remedies.............................................................................15
Exhibit A Certificate of Designation Exhibit B Form of Opinion of internal counsel to Century Aluminum Company Exhibit C Certificate of Officers of Century Aluminum Company -ii- 4 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT, dated as of March 30, 2001 (this "Agreement"), by and between Century Aluminum Company, a Delaware corporation (the "Company"), and Glencore AG, a Swiss company (the "Purchaser"). WHEREAS, the Company desires to issue and sell to the Purchaser and the Purchaser desires to acquire shares of the Company's 8% Cumulative Convertible Preferred Stock, $0.01 par value per share (the "Preferred Stock"). NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: ARTICLE I CERTAIN DEFINITIONS Section 1.1 Certain Definitions. As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated: "Affiliate" means, with respect to any Person, any Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with") shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. "Business Day" shall mean a day (other than a Saturday or Sunday) on which commercial banks are open for business in London, Switzerland and New York. "Certificate of Designation" shall have the meaning set forth in Section 2.1(a). "Closing" shall have the meaning set forth in Section 2.1(b). "Closing Date" shall have the meaning set forth in Section 2.1(b). "Common Stock" shall mean the Company's common stock, par value $0.01 per share. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Financial Statements" shall have the meaning set forth in Section 3.1(j). "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. "Lien" shall mean, with respect to any asset, any mortgage, lien, pledge, encumbrance, charge or security interest of any kind in or on such asset or the revenues or income thereon or therefrom. 1 5 "Material Adverse Effect" shall have the meaning set forth in Section 3.1(a). "NASD" shall mean the National Association of Securities Dealers, Inc. "Offering Circular" shall mean the Preliminary Offering Circular dated March 9, 2001 relating to the Senior Secured Mortgage Notes of the Company due 2008. "Per Share Consideration" shall have the meaning set forth in Section 2.1(a). "Person" shall mean an individual or a corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind. "Preferred Stock" shall have the meaning set forth in the recitals hereto. "Purchase Price" shall have the meaning set forth in Section 2.1(a). "SEC" shall mean the U.S. Securities and Exchange Commission. "SEC Documents" shall have the meaning set forth in Section 3.1(j). "Securities Act" shall mean the Securities Act of 1933, as amended. "Shares" shall have the meaning set forth in Section 2.1(a). "Subsidiaries" shall have the meaning set forth in Section 3.1(a). "Underlying Shares" shall mean the shares of Common Stock into which the Shares are convertible in accordance with the terms hereof and the Certificate of Designation. ARTICLE II PURCHASE OF SHARES Section 2.1 Purchase of Shares; Closing. (a) Subject to the terms and conditions herein set forth, the Company shall issue and sell to the Purchaser, and the Purchaser shall purchase from the Company on the Closing Date 500,000 shares of the Preferred Stock (the "Shares"), which shall have the respective rights, preferences and privileges set forth in Exhibit A hereto (the "Certificate of Designation") for an aggregate purchase price of US$25,000,000 (the "Purchase Price"); and a per share price of US$50 (the "Per Share Consideration"). (b) The closing of the purchase and sale of the Shares (the "Closing") shall take place at the offices of Curtis, Mallet-Prevost, Colt & Mosle LLP immediately following the execution hereof, or at such other time and/or place as the Purchaser and the Company may agree, provided, however, in no case shall the Closing take place later than April 30, 2001. The date of the Closing is hereinafter referred to as the "Closing Date". (c) At the Closing, (i) the Company shall deliver to the Purchaser (A) one or more stock certificates representing the Shares purchased hereunder, registered in the name of -2- 6 the Purchaser and (B) all other documents, instruments and writings required to have been delivered at or prior to Closing by the Company pursuant to this Agreement and (ii) the Purchaser shall deliver to the Company (A) the Purchase Price in United States dollars in immediately available funds by wire transfer to an account designated in writing by the Company at least two Business Days prior to the Closing and (B) all other documents, instruments and writings required to have been delivered at or prior to Closing by the Purchaser pursuant to this Agreement. ARTICLE III REPRESENTATIONS AND WARRANTIES Section 3.1 Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchaser as follows: (a) Organization and Qualification. The Company and each of its subsidiaries on the date hereof (the "Subsidiaries") is a corporation, duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation, with the requisite corporate power and authority to own and use its properties and assets and to carry on its business as currently conducted. Each of the Company and the Subsidiaries is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, has not had and could not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the condition (financial or otherwise), business, operations, assets or prospects of the Company and the Subsidiaries, taken as a whole, or on the ability of the Company to consummate the transactions contemplated hereby (a "Material Adverse Effect"). (b) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated hereby and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company. This Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application. (c) Capitalization. Subject to the vesting of additional performance share units, the authorized, issued and outstanding capital stock of the Company is as set forth in the SEC Documents. All outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are entitled to preemptive or similar rights. Other than additional option grants in an aggregate of not more than 25,000 options and except as disclosed in the SEC Documents, other than the Shares, there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or -3- 7 exchangeable for, or giving any Person any right to subscribe for or acquire any shares of capital stock, or contracts, commitments, understandings, or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of capital stock, or securities or rights convertible or exchangeable into shares of capital stock of the Company. Neither the Company nor any Subsidiary is in violation of any of the provisions of its respective certificate of incorporation, bylaws or other constituent documents. Other than as set forth in the SEC Documents or the Offering Circular, there are no outstanding rights (other than those of which have been satisfied) which permit the holder thereof to cause the Company to file a registration statement under the Securities Act or which permit the holder thereof to include securities of the Company in a registration statement filed by the Company under the Securities Act, and there are no outstanding agreements or other commitments which otherwise relate to the registration of any securities of the Company under the Securities Act. All securities of the Company heretofore issued and sold by the Company were issued and sold in compliance with all applicable Federal and state securities laws. Assuming that the representations and warranties of the Purchaser set forth in Section 3.2 are true and correct, the offering, issuance and sale of the Shares and the Underlying Shares will be exempt from the registration requirements of the Securities Act and applicable state securities laws. (d) Issuance of Shares. The Shares are duly authorized and, when issued and paid for in accordance with the terms hereof, shall be validly issued, fully paid and nonassessable. The Company has and at all times while the Shares are outstanding will maintain an adequate reserve of shares of Common Stock to enable it to perform its obligations under this Agreement and the Certificate of Designation. When issued in accordance with the terms hereof and the Certificate of Designation, the Underlying Shares will be duly authorized, validly issued, fully paid and nonassessable. The issuance of the Shares and the Underlying Shares will not be subject to any pre-emptive rights or similar rights with respect to such Shares or such Underlying Shares. (e) No Conflicts. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby do not and will not (i) conflict with or violate any provision of its certificate of incorporation or bylaws, or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any Subsidiary is a party), or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or its Subsidiaries is subject (including Federal and state securities laws and regulations), or by which any property or asset of the Company or any Subsidiary is bound or affected. (f) Consents and Approvals. Except for the filing of the Certificate of Designation and any required approvals under the HSR Act, neither the Company nor any Subsidiary is required to obtain any consent, waiver, authorization or order of, or make any filing or registration with, any court or other federal, state, local or other governmental authority having jurisdiction over the Company or other Person in connection with (i) the execution, delivery and performance by the Company of this Agreement, (ii) the valid and lawful -4- 8 authorization, issuance, sale and delivery of the Shares or (iii) the valid and lawful authorization, reservation, issuance, sale and delivery of the Underlying Shares. (g) Litigation; Proceedings. Except as disclosed in the SEC Documents, there is no action, suit, notice of violation, proceeding or investigation pending or, to the best knowledge of the Company, threatened against the Company or any of its Subsidiaries or any of their respective properties before or by any court, arbitral tribunal or panel, or governmental or administrative agency or regulatory authority (Federal, State, county, local or foreign) which (i) relates to or challenges the legality, validity or enforceability of this Agreement, the Shares or the Underlying Shares, (ii) could reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect or (iii) could reasonably be expected to, individually or in the aggregate, materially impair the ability of the Company to perform fully and on a timely basis its obligations under this Agreement. (h) No Default or Violation. Neither the Company nor any Subsidiary (i) is in default under or in violation of any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound, except such conflicts or defaults as could not reasonably be expected to have a Material Adverse Effect, (ii) is in violation of any order of any court, arbitral tribunal, panel or governmental body, except for such violations as could not reasonably be expected to have a Material Adverse Effect, or (iii) is in violation of any statute, rule or regulation of any governmental authority which could (individually or in the aggregate) (x) adversely affect the legality, validity or enforceability of this Agreement, (y) reasonably be expected to have a Material Adverse Effect or (z) adversely impair the Company's ability or obligation to perform fully on a timely basis its obligations under this Agreement. (i) Private Offering. Neither the Company nor any Person acting on its behalf has taken or will take any action (including, without limitation, any offering of any securities of the Company under circumstances which would require the integration of such offering with the offering of the Shares under the Securities Act) which might subject the offering, issuance or sale of the Shares to the registration requirements of Section 5 of the Securities Act. (j) SEC Documents. The Company has filed with the SEC all reports and registration statements and other filings required to be filed by it under the rules and regulations of the SEC, for the two years preceding the date hereof (the foregoing materials being collectively referred to herein as the "SEC Documents") on a timely basis. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC promulgated thereunder, and none of the SEC Documents, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company, including the notes thereto, included in the SEC Documents (the "Financial Statements") were complete and correct in all material respects as of their respective dates, complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto as of their respective dates, and were prepared in accordance with generally accepted -5- 9 accounting principles applied on a basis consistent throughout the periods indicated (except as may be indicated in the notes thereto or, in the case of unaudited statements included in Quarterly Reports on Form 10-Q, as permitted by Form 10-Q of the SEC). The Financial Statements fairly present the financial condition and operating results of the Company and its Subsidiaries at the dates and for the periods indicated therein (subject, in the case of unaudited statements, to normal year-end adjustments). There has been no change in the Company's accounting policies except as described in the notes to the Financial Statements. (k) Absence of Certain Charges. Except as otherwise disclosed in the SEC Documents or the Offering Circular, since December 31, 2000, there has not been: (i) Any material change in the assets, liabilities, financial condition, business or results of operations of the Company and its Subsidiaries from that reflected in the Financial Statements, except changes in the ordinary course of business which could not reasonably be expected to, either individually or in the aggregate, constitute a Material Adverse Effect; (ii) Any change in the contingent obligations of the Company or its Subsidiaries, whether by way of guaranty, endorsement, indemnity, warranty or otherwise, except such changes as could not reasonably be expected to, either individually or in the aggregate, constitute a Material Adverse Effect; (iii) Any damage, destruction or loss, whether or not covered by insurance, which could reasonably be expected to have a Material Adverse Effect; (iv) With the exception of payments of cash dividends, any declaration, setting aside or payment of any dividend or other distribution of the assets or securities of the Company in respect of outstanding capital stock of the Company; (v) Any material contract entered into by the Company or any of its Subsidiaries, other than in the ordinary course of business and as provided to the Purchaser, or any material amendment or termination of, or default under, any material contract to which the Company or any of its Subsidiaries is a party or by which any of them are bound; (vi) Any commitment or agreement by the Company or any of its Subsidiaries to do any of the things described in the preceding clauses (i) through (v); or (vii) Any other event or condition of any character that has had or that could reasonably be expected to have a Material Adverse Effect. Section 3.2 Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company as follows: (a) Organization; Authority. The Purchaser is a corporation duly and validly existing and in good standing under the laws of Switzerland. The Purchaser has the requisite power and authority to enter into and to consummate the transactions contemplated hereby and -6- 10 otherwise to carry out its obligations hereunder. The purchase of the Shares by the Purchaser hereunder has been duly authorized by all necessary action on the part of the Purchaser. This Agreement has been duly executed and delivered by the Purchaser and constitutes the valid and legally binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights generally and to general principles of equity. (b) Consents and Approvals. The Purchaser is not required to obtain any consent, waiver, authorization or order of, or make any filing or registration with, any court or other federal, state, local or other governmental authority having jurisdiction over the Purchaser or other Person in connection with the execution, delivery and performance by the Purchaser of this Agreement. (c) Litigation; Proceedings. There is no action, suit, notice of violation, proceeding or investigation pending or, to the best knowledge of the Purchaser, threatened against the Purchaser before or by any court, arbitral tribunal or panel, or governmental or administrative agency or regulatory authority (Federal, State, county, local or foreign) which (i) relates to or challenges the legality, validity or enforceability of this Agreement or (ii) could reasonably be expected to, individually or in the aggregate, materially impair the ability of the Purchaser to perform fully and on a timely basis its obligations under this Agreement. (d) Investment Intent. The Purchaser is acquiring the Shares and the Underlying Shares for its own account for investment purposes only and not with a view to or for distributing or reselling such Shares or Underlying Shares or any part thereof or interest therein in violation of the Securities Act, without prejudice, however, to the Purchaser's right, subject to the provisions of this Agreement, at all times to sell or otherwise dispose of all or any part of such Shares or Underlying Shares under an effective registration statement under the Securities Act and in compliance with applicable State securities laws or in a transaction exempt from, or outside the scope of such registration requirements. (e) Purchaser Status. At the time the Purchaser was offered the Shares, it was, and at the date hereof, it is, and at the Closing Date, it will be, an "accredited investor" as defined in Rule 501(a) under the Securities Act. (f) Experience of Purchaser. The Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. (g) Ability of Purchaser to Bear Risk of Investment. The Purchaser is able to bear the economic risk of an investment in the Shares and, at the present time, is, and at the Closing Date it will be, able to afford a complete loss of such investment. (h) Access to Information. The Purchaser acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the -7- 11 offering of the Shares and the merits and risks of investing in the Shares, (ii) access to information about the Company and the Company's financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment in the Common Stock, and (iii) the opportunity to obtain such additional information which the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the Shares. ARTICLE IV OTHER AGREEMENTS OF THE PARTIES Section 4.1 Transfer Restrictions. If the Purchaser should decide to dispose of any of the Shares to be purchased by it hereunder (and upon conversion thereof, any Underlying Shares), the Purchaser understands and agrees that it may do so only (i) pursuant to an effective registration statement under the Securities Act, (ii) to the Company or (iii) pursuant to an available exemption from or in a transaction not subject to registration under the Securities Act. In connection with any transfer of any Shares other than pursuant to an effective registration statement or to the Company, the Company may require that the transferor of such Shares provide to the Company, at the transferor's expense, an opinion of counsel experienced in the area of United States securities laws selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such Shares under the Securities Act or any State securities laws. The Purchaser agrees to the imprinting of the following legend on certificates representing the Shares: NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, THEY MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (B) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT. The legend set forth above may be removed if and when the Shares represented by such certificate or the Underlying Shares, as the case may be, are disposed of pursuant to an effective registration statement under the Securities Act or in the opinion of counsel to the Company experienced in the area of United States securities laws such legend is no longer required under applicable requirements of the Securities Act or any state securities laws. The stock certificates representing the Shares and the Underlying Shares shall also bear any other legends required by applicable Federal or state securities laws, which legends may be removed when, in the opinion of counsel to the Company experienced in the area of the applicable securities laws, such legends are no longer required under the applicable requirements of such securities laws. The Company -8- 12 agrees that it will provide the Purchaser, upon request, with a substitute stock certificate or certificates, free from such legend at such time as such legend is determined to be no longer applicable. The Company makes no representation, warranty or agreement as to the availability, now or hereafter, of any exemption from registration under the Securities Act with respect to any resale of Shares or Underlying Shares. Section 4.2 Furnishing of Information. As long as the Purchaser owns any Shares, if requested, the Company will promptly furnish to it all reports filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act (or if the Company is not at the time required to file reports pursuant to such sections, unaudited quarterly and audited annual financial statements prepared in accordance with generally accepted accounting principles). Section 4.3 Notice of Certain Events. The Company shall (i) advise the Purchaser promptly after obtaining knowledge thereof, and, if requested by the Purchaser, confirm such advice in writing, of the issuance by any state securities commission of any stop order suspending the qualification or exemption from qualification of the Shares or the Common Stock for offering or sale in any jurisdiction, or the initiation of any proceeding for such purpose by any state securities commission or other regulatory authority, (ii) use its best efforts to prevent the issuance of any stop order or order suspending the qualification or exemption from qualification of the Shares or the Common Stock under any state securities or Blue Sky laws, and (iii) if at any time any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Shares or the Common Stock under any such laws, use its best efforts to obtain the withdrawal or lifting of such order at the earliest possible time. Section 4.4 Blue Sky Laws. The Company shall cooperate with the Purchaser in connection with the qualification of the Shares and the Underlying Shares under the securities or Blue Sky laws of such jurisdictions as the Purchaser may request and to continue such qualification at all times; provided, however, that neither the Company nor its Subsidiaries shall be required in connection therewith to qualify as a foreign corporation where they are not now so qualified. Section 4.5 Integration. The Company shall not and shall use its best efforts to ensure that no Affiliate shall sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Shares or the Underlying Shares in a manner that would require the registration under the Securities Act of the sale of the Shares or Underlying Shares to the Purchaser. Section 4.6 Filing of Reports. For so long as the Company is subject to the filing requirements of the Exchange Act, the Company shall timely file with the SEC all reports required to be filed by it under the Exchange Act. Section 4.7 Furnishing of Rule 144A Materials. The Company shall, for so long as any of the Shares or Underlying Shares remain outstanding and during any period in which it is not subject to Section 13 or 15(d) of the Exchange Act, make available to any registered holder of Shares or Underlying Shares in connection with any sale thereof and any prospective purchaser -9- 13 of such Shares or Underlying Shares from such Person, the following information in accordance with Rule 144A(d)(4) under the Securities Act: a brief statement of the nature of the business of the Company and the products and services it offers and the Company's most recent audited balance sheet and profit and loss and retained earnings statements, and similar audited financial statements for such part of the two preceding fiscal years as the Company has been in operation. Section 4.8 Solicitation Materials. The Company has not and shall not solicit any offer to buy or sell the Shares or Underlying Shares by means of any form of general solicitation or advertising. Section 4.9 Matters Affecting Purchaser's Rights. From the date hereof through the Closing Date, the Company shall not and shall cause the Subsidiaries not to, without the consent of the Purchaser, (i) amend its Certificate of Incorporation, bylaws or other constituent documents so as to adversely affect any rights of the Purchaser; (ii) split, combine or reclassify its outstanding capital stock; (iii) other than the payment of a cash dividend, declare, authorize, set aside or pay any dividend or other distribution with respect to the Common Stock; or (iv) enter into any agreement with respect to any of the foregoing. Section 4.10 HSR Act Filings. If a filing is required under the HSR Act in connection with the issuance of the Shares or the Underlying Shares, the Company shall, as expeditiously as possible, prepare and file, and shall cooperate with the Purchaser in its preparation and filing of, any documents required under the HSR Act. ARTICLE V CONDITIONS PRECEDENT TO CLOSING Section 5.1 Conditions Precedent to Obligations of the Purchaser. The obligation of the Purchaser to purchase the Shares is subject to the satisfaction or waiver by the Purchaser, at or prior to the Closing, of each of the following conditions: (a) Legal Opinion. The Purchaser shall have received the legal opinion, addressed to it and dated the Closing Date, form the internal legal counsel for the Company, substantially in the form of Exhibit B; (b) Accuracy of the Company's Representations and Warranties. The representations and warranties of the Company contained herein shall be true and correct as of the date when made and as of the Closing Date as though made at that time (except that representations and warranties that are made as of a specific date need be true only as of such date); (c) Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing; -10- 14 (d) No Material Adverse Effect. Since the date of the financial statements included in the Company's last filed Annual Report on Form 10-K, no event which could reasonably be expected to have a Material Adverse Effect shall have occurred; (e) No Prohibitions. The purchase of and payment for the Shares (and upon conversion thereof, the Underlying Shares) hereunder shall not be prohibited or enjoined (temporarily or permanently) by any applicable law or governmental regulation; (f) Company Certificates. The Purchaser shall have received a certificate substantially in the form of Exhibit C, dated the Closing Date, signed by the Secretary or an Assistant Secretary of the Company and certifying (i) that attached thereto is a true, correct and complete copy of (A) the Company's Certificate of Incorporation, as amended to the date thereof and (B) resolutions duly adopted by the Board of Directors of the Company, or committee thereof, authorizing the execution and delivery of this Agreement and the issuance and sale of the Shares and the Underlying Shares; (g) No Suspensions of Trading in Common Stock. Trading in the Common Stock shall not have been suspended by the SEC or the NASD or other exchange or market on which the Common Stock is listed or quoted (except for any suspension of trading of limited duration solely to permit dissemination of material information regarding the Company); (h) Delivery of Stock Certificates. The Company shall have delivered to the Purchaser the stock certificate(s) representing the Shares, registered in the name of the Purchaser; (i) Filing of Certificate of Designation. The Company shall have filed with the Secretary of State of the State of Delaware, the Certificate of Designation in the form attached hereto as Exhibit A; (j) Acquisition Agreement. The Company and the Purchaser shall have entered into the Acquisition Agreement for the sale by the Company to the Purchaser of a 20% undivided interest in certain of the assets and properties of the Hawesville Aluminum Reduction Facility; and (k) Note Offering. Simultaneously with the Closing, the Company shall have completed the offering of its Senior Secured First Mortgage Notes due 2008 and shall have consummated the acquisition of MetalsCo. and related assets. Section 5.2 Conditions Precedent to Obligations of the Company. The obligation of the Company to issue and sell the Shares hereunder is subject to the satisfaction or waiver by the Company, at or prior to the Closing, of each of the following conditions: (a) Accuracy of the Purchaser's Representations and Warranties. The representations and warranties of the Purchaser shall be true and correct as of the date when made and as of the Closing Date as though made at that time (except that representations and warranties that are made as of a specific date need be true only as of such date); -11- 15 (b) No Prohibitions. The purchase of and payment for the Shares (and upon conversion thereof, the Underlying Shares) hereunder shall not be prohibited or enjoined (temporarily or permanently) by any applicable law or governmental regulation; (c) Acquisition Agreement. The Purchaser and the Company shall have entered into the Acquisition Agreement for the sale by the Company to the Purchaser of a 20% undivided interest in certain of the assets and properties of the Hawesville Aluminum Reduction Facility; and (d) Performance by the Purchaser. The Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by it at or prior to the Closing. ARTICLE VI TERMINATION Section 6.1 Termination by Mutual Consent. This Agreement may be terminated at any time prior to the Closing by the mutual consent of the Company and the Purchaser. Section 6.2 Termination by the Company or the Purchaser. This Agreement may be terminated prior to the Closing by either the Company or the Purchaser, by giving written notice of such termination to the other party, if: (a) the Closing shall not have occurred by April 30, 2001; provided that the terminating party is not then in material breach of its obligations under this Agreement in any manner that shall have caused the failure referred to in this paragraph (a); (b) there shall be in effect any statute, rule, law or regulation that prohibits the consummation of the Closing or if the consummation of the Closing would violate any non-appealable final judgment, order, decree, ruling or injunction of any court of or governmental authority having competent jurisdiction; or (c) there shall have been an amendment to the Securities Act or the rules and regulations promulgated thereunder or an interpretive release promulgated or issued thereunder, which, in the reasonable judgment of the terminating party, would materially adversely affect or prohibit without registration under the Securities Act the transactions contemplated hereby. ARTICLE VII MISCELLANEOUS Section 7.1 Fees and Expenses. The Company shall pay all stamp and other similar taxes and duties levied in connection with the issuance of the Shares (and upon conversion thereof, the Underlying Shares) pursuant hereto. The Purchaser shall be responsible for its own tax liability that may arise as a result of the investment hereunder or the transactions contemplated by this Agreement. Whether or not the transactions contemplated by this -12- 16 Agreement are consummated or this Agreement is terminated, the Company shall pay (i) all costs, expenses, fees and all taxes incident to and in connection with: (A) the preparation and filing of the Certificate of Designation and all preliminary and final Blue Sky memoranda, (B) the issuance and delivery of the Shares and the certificates for the Shares, and upon conversion thereof, the Underlying Shares and the certificates for the Underlying Shares (including 50% of all costs and expenses in connection with any filings required under the HSR Act), and (C) furnishing such copies of the SEC Documents and all other information filed with the SEC and all amendments and supplements thereto or the information required to be delivered under Section 4.7 hereof, as the case may be, as may reasonably be requested for use in connection with resales of the Shares and, upon conversion thereof, the Underlying Shares, and (ii) all reasonable fees and expenses of the counsel and accountants of the Purchaser incurred by the Purchaser in connection with the negotiation, preparation, execution and delivery of this Agreement. Section 7.2 Entire Agreement. This Agreement, together with the Exhibits, hereto contains the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, with respect to such matters. Section 7.3 Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed given if delivered personally or mailed by certified or registered mail, postage prepaid, return receipt requested, or delivered to a nationally recognized next business day courier for delivery on the next business day, or by facsimile, with a copy sent as aforesaid and in any instance addressed as follows: If to the Company: Century Aluminum Company 2511 Garden Road Building A Suite 200 Monterey, CA 93940 Fax: 831-642-9328 Attn: Gerald J. Kitchen, Esq. If to the Purchaser: Glencore AG Baarermattstrasse 3 P.O. Box 666 CH-6341 Baar SWITZERLAND Attn: Chief Financial Officer or such other address as may be designated in writing hereafter, in the same manner, by such person. -13- 17 Section 7.4 Indemnification. The Company shall indemnify, defend and hold harmless the Purchaser from and against all liabilities, losses, and damages (with the exception of consequential, special, indirect and punitive damages), together with all reasonable costs and expenses related thereto (including, without limitation, reasonable legal and accounting fees and expenses), which arise out of, result from or relate to any misrepresentation or breach by the Company of, or any failure by the Company to perform, any of its representations, warranties, covenants, obligations or agreements in this Agreement, the Certificate of Designation or any other instrument furnished by, or on behalf of, the Company under this Agreement. Notwithstanding anything to the contrary contained in this Section 7.4, the Company's liability under this Section shall not exceed US$25,000,000 plus the reasonable costs and expenses incurred by the Purchaser under this Section 7.4. Section 7.5 Arbitration. All controversies, claims, differences or disputes arising under, relating to or connected with this Agreement shall be finally settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "AAA Rules"). The parties agree that such arbitration (i) shall take place in New York, New York, U.S.A., (ii) shall be before a panel of three (3) arbitrators chosen in accordance with the AAA Rules, and (iii) shall be conducted in the English language. The award in any such arbitration shall be final, binding and conclusive; and judgment thereon may be entered in any court of competent jurisdiction. Section 7.6 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by both the Company and the Purchaser, or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter. Section 7.7 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. Section 7.8 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns, including each other Person who shall become a registered holder of the Shares or the Underlying Shares transferred to such holder by the Purchaser or its permitted transferees and their respective legal representatives, successors and assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchaser. Section 7.9 No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. Section 7.10 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware without regard to the principles of conflicts of law thereof. -14- 18 Section 7.11 Survival. The representations and warranties of the Company and the Purchaser contained in Article III and the agreements and covenants of the parties contained in Article IV and this Article VII shall survive the Closing (or any earlier termination of this Agreement) and any conversion or transfer of the Shares hereunder. Section 7.12 Counterpart Signatures. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature page were an original thereof. Section 7.13 Publicity. The Company and the Purchaser shall consult with each other in issuing any press releases or otherwise making public statements with respect to the transactions contemplated hereby and neither party shall issue any such press release or otherwise make any such public statement without the prior written consent of the other, which consent shall not be unreasonably withheld or delayed, unless such press release or public statement is required by law, in which case, the parties shall consult with each other to the extent practical under the circumstances regarding the text of such press release or public statement. Section 7.14 Severability. In case any one or more of the provisions of this Agreement shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision which shall be a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement. Section 7.15 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Purchaser will be entitled to specific performance of the obligations of the Company under this Agreement and the Company will be entitled to specific performance of the obligations of the Purchaser hereunder. Each of the Company and the Purchaser agrees that monetary damages would not be adequate compensation for any loss incurred by reason of any breach of its obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. CENTURY ALUMINUM COMPANY By: /s/ Gerald J. Kitchen ---------------------------------- Name: Gerald J. Kitchen Title: Executive Vice President, General Counsel and Chief Administrative Officer -15- 19 GLENCORE AG By: /s/ Josef Bermann Zbynek Zak ------------------------------------------ Name: Josef Bermann Zbynek Zak Title: Director Director -16- EX-4.8 12 y47973ex4-8.txt FORM OF CONVERTIBLE PREFERRED STOCK CERTIFICATE 1 Exhibit 4.8 CENTURY ALUMINUM COMPANY THIS CERTIFIES THAT GLENCORE AG is the ----------------------------------- registered holder of FIVE HUNDRED THOUSAND fully paid and nonassessable Shares ----------------------------------------------------- of 8% Cumulative Convertible Preferred Stock, par value $.01 per share, of Century Aluminum Company transferable only on the books of the Corporation by the holder hereof in person or by Attorney upon surrender of this Certificate properly endorsed. IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be signed by its duly authorized officers and its Corporate Seal to be hereunto affixed this second day of April A.D. 2001 ------------- ------------------ /s/ Daniel J. Krofcheck /s/ Gerald J. Kitchen --------------------------- ------------------------- Treasurer Executive Vice President [SEAL] 2 For Value Received, hereby sell, assign and transfer unto Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint Attorney to transfer the said Shares on the books of the within named Corporation with full power of substitution in the premises. Dated 19 In presence of NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. THE POWERS, DESIGNATIONS, PREFERENCES AND SPECIAL RIGHTS OF THE SHARES REPRESENTED HEREBY ARE AS SET FORTH IN THE CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS, A COPY OF WHICH MAY BE OBTAINED, WITHOUT CHARGE, FROM THE CORPORATION. EX-99.1 13 y47973ex99-1.txt PRESS RELEASE 1 EXHIBIT 99.1 CENTURY COMPLETES ACQUISITION OF KENTUCKY PLANT April 2, 2001 --Monterey, CA - Century Aluminum Company (NASDAQ: CENX) has completed the acquisition of the NSA primary plant at Hawesville, KY from Southwire Company and assumed operating and management control of the facility today. Century holds an 80 percent share in the plant and Glencore holds the remainder. Century completed financing of the acquisition on March 28. The arrangements include $325 million of 7-year senior secured first mortgage notes with a coupon of 11.75%; a $100 million revolving credit facility with Fleet Capital, Inc.; and the purchase by Glencore of $25 million of convertible preferred shares in Century that are convertible into common stock at $17.92 a share. The Hawesville plant has more than 800 employees and capacity to produce 237,000 metric tons per year (mtpy) of mostly high purity aluminum. Southwire will continue to operate an adjacent mill that produces aluminum rod and cable. Century is supplying the mill with molten, high-purity aluminum under a long-term contract. Announcing the completion of the acquisition, Craig A. Davis, Century Chairman and Chief Executive Officer, said: "The Hawesville plant is a significant and positive addition to our growing portfolio of primary aluminum assets. This acquisition substantially increases the size of our company and is another step in our strategy to become a significant and lower cost worldwide producer of primary aluminum." Glencore, based in Baar, Switzerland, is a leading privately held diversified natural resources group with worldwide interests in the mining, smelting, refining, processing and trading of metals and minerals, energy products and agricultural products. It currently owns 39 percent of the outstanding shares of Century common stock. Southwire manufactures wire and cable. The company's technologies and products, including building wire and cable, copper and aluminum rod and utility cable products, are distributed worldwide. Southwire is a privately held and based in Carrollton, GA. Century now owns 465,000 mtpy of primary aluminum capacity. In addition to the Hawesville plant, the company owns and operates a 168,000-mtpy reduction plant at Ravenswood, WV and owns a 49.67 percent share in a 215,000-mtpy reduction plant at Mt. Holly, SC. Alcoa, Inc. owns the remainder of the Mt. Holly facility and is the operating partner. Century's corporate offices are located in Monterey, CA. 2 Editorial contact: A. T. Posti (831) 642-9364 -----END PRIVACY-ENHANCED MESSAGE-----