-----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, DZlKpTGXk4EgMfnl5fGB2/cF+/7Zpb43fnVUWD/cYQuYy0yejv8TEi2QXoZxTe4n xoDrCZcTeHMjLEw0Dbpq2A== 0000950123-99-009156.txt : 19991018 0000950123-99-009156.hdr.sgml : 19991018 ACCESSION NUMBER: 0000950123-99-009156 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19990921 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19991006 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: 99723715 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 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): September 21, 1999 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 Identification No.) Incorporation)
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. On September 21, 1999 Century Aluminum Company, a Delaware corporation ("Century" or the "Company"), and Century Aluminum of West Virginia, Inc., a Delaware corporation and wholly-owned subsidiary of Century ("Century WV"), completed the sale to Pechiney Rolled Products LLC, a Delaware limited liability company ("Pechiney"), of certain assets and the assumption of certain liabilities of Century WV's rolled products unit at Ravenswood, West Virginia (the "Rolling Business") and all of the issued and outstanding shares of common stock of Century Cast Plate, Inc., a Delaware corporation and wholly-owned subsidiary of Century ("Century CP"). The parties consummated the sale pursuant to the Stock and Asset Purchase Agreement dated July 26, 1999 (the "Purchase Agreement") by and among Century, Century WV and Pechiney. The aggregate purchase price for the Rolling Business and Century CP was $248 million, subject to certain post-closing adjustments. The purchase price was determined by arms'-length negotiations between the parties. Century used a portion of the purchase price to repay its outstanding debt. The Rolling Business assets that were sold include Century WV's casting operation at the Ravenswood, West Virginia facility. The facility, which has the capacity to produce up to 600 million pounds (270,000 metric tons) of rolled aluminum products a year, provides premium sheet and plate products to the aerospace and transportation markets, and produces brazing sheet used to manufacture radiators for passenger cars and trucks. Century CP's operations include a fabrication plant located in Vernon, California. The fabrication plant has the capacity to produce 15 million pounds (7,000 metric tons) a year of cast aluminum plate. Cast aluminum plate is used principally in the machinery and equipment market. In connection with the Purchase Agreement, Century WV and Pechiney entered into a Molten Aluminum Purchase Agreement dated as of September 21, 1999 (the "Metal Agreement"). Pursuant to the Metal Agreement, Pechiney has agreed to purchase from Century WV substantial quantities of molten aluminum produced at Century WV's reduction facility in Ravenswood, West Virginia at a price which is based on a quoted average market price as reported for the month immediately preceding the month of delivery. In addition, Pechiney has agreed to provide casting services to Century WV in connection with the excess molten aluminum produced at Century WV's reduction facility which is not purchased by Pechiney under the Metal Agreement. In connection with the transition of ownership of the Rolling Business, Century has agreed to make available certain of its executive officers to provide consulting services to Pechiney. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements of Business Acquired. Not Applicable. (b) Pro Forma Financial Information. -1 3 (i) Unaudited pro forma consolidated balance sheet of Century Aluminum Company and subsidiaries as of June 30, 1999 giving effect to the disposition of the Rolling Business and Century CP as of June 30, 1999. (ii) Unaudited pro forma consolidated statements of operations of Century Aluminum Company and subsidiaries for the year ended December 31, 1998 and for the six month period ended June 30, 1999 giving effect to the disposition of the Rolling Business and Century CP as if such transaction had occurred January 1, 1998. The unaudited pro forma consolidated financial statements presented herein are shown for illustrative purposes only and are not necessarily indicative of the financial position or results of operations of the Company that would have actually resulted had the transaction occurred as of the date or for the periods presented, or that may result in the future. PRO FORMA FINANCIAL INFORMATION. The following unaudited pro forma consolidated financial information has been presented for the balance sheet as of June 30, 1999 and for the statements of operations for the year ended December 31, 1998 and the six month period ended June 30, 1999. The historic consolidated financial information presented herein should be read in conjuction with the audited consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1998 and the unaudited consolidated financial statements and notes thereto included in the Company's quarterly report on Form 10-Q for the period ended June 30, 1999. The following unaudited pro forma consolidated financial information is based on the historical consolidated financial statements of the Company. The unaudited pro forma consolidated balance sheet gives effect to: (i) the sale of the Rolling Business assets including all of the issued and outstanding shares of Century CP and the assumption by Pechiney of certain Rolling Business liabilities, (ii) the estimated costs and other charges related to the transaction, (iii) the repayment of the outstanding borrowings under the credit facility and (iv) the anticipated income tax effects related to the transaction. The unaudited pro forma consolidated statements of operations give effect to: (i) the elimination of the Rolling Business and Century CP, (ii) the estimated effects of the Metal Agreement and (iii) the elimination of interest expense resulting from the reduction of the outstanding balance of the Company's credit facility, as if such transactions occurred on January 1, 1998. The gain from the sale of the Rolling Business and Century CP has not been reflected in the pro forma consolidated statements of operations. The unaudited pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable. The unaudited pro forma consolidated financial information does not purport to represent what the Company's financial position or results of operations would actually have been had the transaction in fact occurred at such dates or to project the Company's financial position or results of operations at or for any future date or period. The unaudited pro forma consolidated financial information should be read in conjunction with the historical consolidated financial statements of the Company. -2 4 The following unaudited pro forma financial information does not reflect working capital changes related to the estimated effects of the Metal Agreement with Pechiney. UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1999 --------------------------------------------------- PRO FORMA ACTUAL ADJUSTMENTS PRO FORMA ------ ----------- --------- (IN THOUSANDS) ASSETS CURRENT ASSETS: Cash................................................................... $ 627 $241,877 (a) $ 130,504 (112,000) (b) Restricted cash equivalents............................................ 5,817 5,817 Accounts receivable, trade - net....................................... 87,624 (76,120) (a) 11,504 Due from affiliates.................................................... 7,818 7,818 Inventories............................................................ 182,875 (152,185) (a) 30,690 Prepaid and other assets............................................... 9,620 (465) (a) 28,433 19,278 (c) -------- ---------- --------- Total current assets............................................. 294,381 (79,615) 214,766 PROPERTY, PLANT AND EQUIPMENT - NET........................................ 228,784 (126,309) (a) 102,475 OTHER ASSETS............................................................... 18,261 (2,703) (a) 297 (15,261) (c) -------- ---------- --------- TOTAL........................................................... $541,426 $(223,888) $ 317,538 ======== ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable, trade.............................................. $37,916 $ (13,569) (a) $ 24,347 Due to affiliates.................................................... 13,711 (9,645) (a) 4,066 Accrued and other current liabilities................................ 31,755 (2,473) (a) 29,282 Accrued employee benefits costs - current portion.................... 15,565 (11,046) (a) 4,519 -------- ---------- --------- Total current liabilities....................................... 98,947 (36,733) 62,214 -------- ---------- --------- REVOLVING TERM LOAN....................................................... 112,000 (112,000) (b) - ACCRUED PENSION BENEFITS COSTS - Less current portion..................... 10,496 (5,223) (a) 5,273 ACCRUED POSTRETIREMENT BENEFITS COSTS - Less current portion 129,015 (91,031) (a) 37,984 OTHER LIABILITIES......................................................... 20,981 (13,411) (a) 22,564 14,994 (c) -------- ---------- --------- Total noncurrent liabilities.................................... 272,492 (206,671) 65,821 -------- ---------- --------- SHAREHOLDERS' EQUITY: Common stock......................................................... 202 202 Additional paid-in capital........................................... 164,406 164,406 Retained earnings.................................................... 5,379 30,493 (a) 24,895 (10,977) (c) -------- ---------- --------- Total shareholders' equity...................................... 169,987 19,516 189,503 -------- ---------- --------- TOTAL........................................................... $ 541,426 $ (223,888) $ 317,538 ========= =========== =========
- -------------------------- (a) Reflects the sale of the net assets of the Rolling Business and the stock of Century CP for $241.9 million including transaction costs and other charges related to the transaction (b) Reflects principal repayment of the credit facility. (c) Reflects the anticipated tax effect of the transaction. -3 5 2,2 UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998 ----------------- PRO FORMA ACTUAL ADJUSTMENTS PRO FORMA ------ ----------- --------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) NET SALES: Third-party customers ....................... $ 576,006 $ (534,522) (a) $ 272,968 231,484) (b) Related parties ............................. 74,252 74,252 --------- ---------- --------- 650,258 (303,038) 347,220 COST OF GOODS SOLD ............................... (611,796) 501,098 (a) (323,721) (213,023) (b) --------- ---------- --------- GROSS PROFIT ..................................... 38,462 (14,963) 23,499 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ..................... (19,246) 7,507 (a) (11,739) --------- ---------- --------- OPERATING INCOME ................................. 19,216 (7,456) 11,760 INTEREST EXPENSE - Net ........................... (2,204) 2,204 (a) - NET GAIN ON FORWARD CONTRACTS .................... 10,574 1,170 (a) 11,744 OTHER INCOME ..................................... 553 (185)(a) 368 --------- ---------- --------- INCOME BEFORE INCOME TAXES ....................... 28,139 (4,267) 23,872 INCOME TAX EXPENSE ............................... (10,202) 1,536 (c) (8,666) --------- ---------- --------- NET INCOME ....................................... $ 17,937 $ (2,731) $ 15,206 ========= ========= ========== EARNINGS PER COMMON SHARE Basic ....................................... $ 0.90 $ 0.76 ========= ========== Diluted ..................................... $ 0.89 $ 0.75 ========= ========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING Basic ............................................ 20,000 20,000 ========= ========== Diluted .......................................... 20,266 20,266 ========= ==========
- ------------------ (a) Reflects the elimination of the Rolling Business and Century CP and the reduction of interest expense related to the retirement of debt. (b) Reflects the estimated effects of the Metal Agreement with Pechiney. (c) Reflects the estimated tax effects of (a) and (b) above. -4 6 UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1999 ------------- PRO FORMA ACTUAL ADJUSTMENTS PRO FORMA ------ ----------- --------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) NET SALES: Third-party customers............................. $ 294,623 $(268,605)(a) $ 120,892 94,874 (b) Related parties................................... 37,742 37,742 ---------- --------- ----------- 332,365 (173,731) 158,634 COST OF GOODS SOLD..................................... (331,633) 261,799 (a) (164,868) (95,034) (b) ---------- --------- ----------- GROSS PROFIT (LOSS).................................... 732 (6,966) (6,234) SELLING, GENERAL AND ADMINISTRATIVE EXPENSES........................... (8,601) 3,476 (a) (5,125) ---------- --------- ----------- OPERATING LOSS......................................... (7,869) (3,490) (11,359) INTEREST EXPENSE - Net................................. (3,552) 3,552 (a) - NET LOSS ON FORWARD CONTRACTS.......................... (2,501) (842) (a) (3,343) OTHER EXPENSE.......................................... (669) 332 (a) (337) ---------- --------- ----------- LOSS BEFORE INCOME TAXES............................... (14,591) (448) (15,039) INCOME TAX BENEFIT..................................... 6,752 161 (c) 6,913 ---------- --------- ----------- NET LOSS............................................... $ (7,839) $(287) $ (8,126) ========== ========= =========== LOSS PER COMMON SHARE Basic ............................................ ($0.39) ($.40) ========== ========== Diluted........................................... ($0.39) ($.40) ========== ========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING Basic ............................................ 20,202 20,202 ---------- ---------- Diluted........................................... 20,323 20,323 ========== ==========
- ------------------ (a) Reflects the elimination of the Rolling Business and Century CP and the reduction of interest expense related to the retirement of debt. (b) Reflects the estimated effects of the Metal Agreement with Pechiney. (c) Reflects the estimated tax effects of (a) and (b) above. -5 7 (c) Exhibits. The following exhibits are filed with this report on Form 8-K: Exhibit Number Description - -------------- ----------- 2.1* Stock and Asset Purchase Agreement dated July 26, 1999 by and among Century Aluminum Company, Century Aluminum of West Virginia, Inc. and Pechiney Rolled Products LLC 2.2* Management Services Agreement dated as of September 21, 1999 by and between Century Aluminum Company and Pechiney Rolled Products LLC 2.3+ Molten Aluminum Purchase Agreement dated as of September 21, 1999 by and between Century Aluminum of West Virginia, Inc. and Pechiney Rolled Products LLC 2.4* Amended and Restated Shared Facilities and Services Agreement dated as of September 21, 1999 by and between Century Aluminum of West Virginia, Inc. and Pechiney Rolled Products LLC 99.1 Press Release dated September 21, 1999 - ------------------ * Schedules are omitted and will be furnished to the Commission upon request. + Portions of this Exhibit have been deleted and filed separately with the Securities and Exchange Commission pursuant to the Company's request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act. -6 8 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CENTURY ALUMINUM COMPANY Date: October 6, 1999 By: /s/ David W. Beckley --------------- ------------------------------------ Executive Vice President and Chief Financial Officer -7 EX-2.1 2 STOCK AND ASSET PURCHASE AGREEMENT 1 Exhibit 2.1 STOCK AND ASSET PURCHASE AGREEMENT STOCK AND ASSET PURCHASE AGREEMENT, dated as of July 26, 1999 (this "AGREEMENT"), among Century Aluminum Company, a Delaware corporation ("CENTURY"), Century Aluminum of West Virginia, Inc., a Delaware corporation ("CENTURY WV" and, together with Century, the "SELLERS") and Pechiney Rolled Products LLC, a Delaware limited liability company (the "PURCHASER"). W I T N E S S E T H: WHEREAS, the Sellers, directly and indirectly, are engaged in the Business (as defined herein); WHEREAS, Century WV desires to sell to the Purchaser, and the Purchaser desires to purchase from Century WV, all right, title and interest of Century WV in and to property and assets relating to the Rolling Business (as defined herein), and in connection therewith the Purchaser is willing to assume certain liabilities of Century WV and Century relating thereto, all upon the terms and subject to the conditions set forth herein; and WHEREAS, Century desires to sell to the Purchaser, and the Purchaser desires to purchase from Century, 100 shares (the "SHARES") of common stock ("COMMON STOCK"), par value $1.00 per share, of Century Cast Plate, Inc. ("CENTURY CP"), upon the terms and subject to the conditions set forth herein; NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound hereby, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "ACTION" means any claim, action, charge, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority. "ADJUSTED REFERENCE NET WORKING CAPITAL" means an amount equal to the Net Working Capital reflected on the Reference Balance Sheet plus (a) the Adjusted Pre-Closing 2 NWC Increase in the event the Purchase Price is adjusted upward pursuant to Section 2.08(b) or (b) minus the Adjusted Pre-Closing NWC Decrease in the event the Purchase Price is adjusted downward pursuant to Section 2.08(b); provided that if the Purchase Price is not adjusted pursuant to Section 2.08, the Adjusted Reference Net Working Capital shall equal the Net Working Capital reflected on the Closing Balance Sheet. "AFFILIATE" means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person. "AGREEMENT" means this Stock and Asset Purchase Agreement, dated as of July 26, 1999, among the Sellers and the Purchaser (including the Exhibits and Schedules hereto and the Disclosure Schedule) and all amendments hereto made in accordance with the provisions of Section 11.09. "ANCILLARY AGREEMENTS" means the Bill of Sale, the Deed, the Assumption Agreement, the Molten Aluminum Purchase Agreement, the Shared Services Agreement, the Management Services Agreement, the Vernon Indemnity Agreement and the Ravenswood Indemnity Agreement. "ASSETS" means the Shares and the Rolling Assets. "ASSUMPTION AGREEMENT" means the Assumption Agreement to be executed by the Purchaser and Century WV on the Closing Date substantially in the form of Exhibit A. "BILL OF SALE" means the Bill of Sale and Assignment to be executed by Century WV on the Closing Date substantially in the form of Exhibit B. "BUSINESS" means the Rolling Business and the business of the manufacture by Century CP and sale thereof of cast aluminum plate (meaning all products that are cast through a horizontal or vertical process which produces plates with thickness of more than 1/4 inch) as conducted immediately prior to the date hereof. "BUSINESS DAY" means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in The City of New York. "CLOSING BALANCE SHEET" means the statement of assets and liabilities of the Business, to be prepared pursuant to Section 2.09(a) and to be dated as of the Closing Date. "CODE" means the Internal Revenue Code of 1986, as amended through the date hereof. "CONFIDENTIALITY AGREEMENT" means the letter agreement dated January 4, 1999 between Century and Pechiney, a French societe anonyme. 2 3 "CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON CONTROL WITH"), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee, personal representative or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee, personal representative or executor, by contract or otherwise, including, without limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person. "DEED" means the deed to be executed by Century WV on the Closing Date substantially in the form of Exhibit C in order to convey to the Purchaser the Ravenswood Owned Real Property. "DESIGNATED AMOUNT" means U.S.$1,000,000. "DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto, dated as of the date hereof, and forming a part of this Agreement. "ENCUMBRANCE" means any security interest, pledge, mortgage, lien (including, without limitation, environmental and tax liens), charge, encumbrance, adverse claim, preferential arrangement, or restriction of any kind, including, without limitation, any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership. "ENVIRONMENTAL CLAIMS" means any and all actions, suits, demands or demand letters by any Governmental Authority, claims, liens, notices of noncompliance or violation by any Governmental Authority, notices of liability or potential liability by any Governmental Authority, investigations, proceedings, consent orders or consent agreements relating in any way to any Environmental Law, any Environmental Permit or any Hazardous Materials. "ENVIRONMENTAL LAW" means any Law, and any legally binding judicial or administrative interpretation thereof, in each case in effect as of the Closing, including any judicial or administrative order, consent decree or judgment, relating to pollution or protection of the environment, health, safety or natural resources, including, without limitation, those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials. "ENVIRONMENTAL PERMIT" means any permit, approval, identification number, license or other authorization required under any applicable Environmental Law. "ESSENTIAL FACILITIES" means the real property and assets identified as such in the Shared Services Agreement. 3 4 "GOVERNMENTAL AUTHORITY" means any United States federal, state or local or any foreign government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body. "GOVERNMENTAL ORDER" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority. "HAZARDOUS MATERIAL" means petroleum and petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls ("PCB" or "PCBs") and any other chemicals, materials or substances, in each case and to the extent regulated under any applicable Environmental Law. "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder. "INDEBTEDNESS" means, with respect to any Person, (a) all indebtedness of such Person, whether or not contingent, for borrowed money, (b) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (c) all obligations of such Person as lessee under leases that have been or should be, in accordance with U.S. GAAP, recorded as capital leases, (d) all obligations, contingent or otherwise, of such Person under acceptance, letter of credit or similar facilities, (e) all obligations of such Person to purchase, redeem, retire, defease or otherwise acquire for value any capital stock of such Person or any warrants, rights or options to acquire such capital stock, valued, in the case of redeemable preferred stock, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (f) all Indebtedness of others referred to in clauses (a) through (e) above guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed directly or indirectly by such Person through an agreement (i) to pay or purchase such Indebtedness or to advance or supply funds for the payment or purchase of such Indebtedness, (ii) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Indebtedness or to assure the holder of such Indebtedness against loss, (iii) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or such services are rendered) or (iv) otherwise to assure a creditor against loss, and (i) all Indebtedness referred to in clauses (a) through (e) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Encumbrance on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness. "INTELLECTUAL PROPERTY" means (a) inventions, whether or not patentable, whether or not reduced to practice or whether or not yet made the subject of a pending patent application or applications, (b) ideas and conceptions of potentially patentable subject matter, including, without limitation, any patent disclosures, whether or not reduced to practice and whether or not yet made the subject of a pending patent application or applications, (c) national (including the 4 5 United States) and multinational statutory invention registrations, patents, patent registrations and patent applications (including all reissues, divisions, continuations, continuations-in-part, extensions and reexaminations) and all rights therein provided by multinational treaties or conventions and all improvements to the inventions disclosed in each such registration, patent or application, (d) trademarks, service marks, trade dress, logos, trade names and corporate names, whether or not registered, including all common law rights, and registrations and applications for registration thereof, including, but not limited to, all marks registered in the United States Patent and Trademark Office, the Trademark Offices of the States and Territories of the United States of America, and the Trademark offices of other nations throughout the world, and all rights therein provided by multinational treaties or conventions, (e) copyrights (registered or otherwise) and registrations and applications for registration thereof, and all rights therein provided by multinational treaties or conventions, (f) computer software, including, without limitation, source code, operating systems and specifications, data, data bases, files, documentation and other materials related thereto, data and documentation, (g) trade secrets and confidential, technical or business information (including ideas, formulas, compositions, inventions, and conceptions of inventions whether patentable or unpatentable and whether or not reduced to practice), (h) whether or not confidential, technology (including know-how and show-how), manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, copyrightable works, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, (i) copies and tangible embodiments of all the foregoing, in whatever form or medium, (j) all rights to obtain and rights to apply for patents, and to register trademarks and copyrights, and (k) all rights to sue and recover and retain damages and costs and attorneys' fees for present and past infringement of any of the Intellectual Property rights hereinabove set out. "INVENTORIES" means all inventory, merchandise, work-in-progress, finished goods, and raw materials related to the Business, maintained, held or stored by or for the Sellers or Century CP in respect of the Business on the Closing Date and any prepaid deposits for any of the same. "IRS" means the Internal Revenue Service of the United States. "KNOWLEDGE OF THE SELLERS" or "TO THE SELLERS' KNOWLEDGE" means the knowledge of any of (a) any officer of the Sellers or Century CP or (b) any Senior Manager, but only in respect of a Senior Manager's department or area; which in each case shall be deemed to include the knowledge which any such person would have had if they had made reasonable inquiry. "LAW" means any federal, state, local or foreign statute, law, ordinance, regulation, rule, code, order, requirement or rule of common law. "LLC" means the limited liability company established pursuant to the LLC Agreement to own the Essential Facilities. 5 6 "LLC AGREEMENT" means the limited liability company agreement to be entered into between Century WV and the Purchaser pursuant to the Shared Services Agreement. "LEASED REAL PROPERTY" means the real property leased pursuant to the office leases listed in Schedule 1.01(a). "LIABILITIES" means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured, known or unknown, or determined or determinable, including, without limitation, those arising under any Law (including, without limitation, any Environmental Law), Action or Governmental Order and those arising under any contract, agreement, arrangement, commitment or undertaking. "LICENSED INTELLECTUAL PROPERTY" means all Intellectual Property licensed or sublicensed from a third party by (a) Century WV and used in connection with the Business or (b) Century CP. "MAJOR CUSTOMER" means The Boeing Company. "MANAGEMENT SERVICES AGREEMENT" means the Management Services Agreement to be entered into between Century and the Purchaser, in the form attached hereto as Exhibit D. "MATERIAL ADVERSE EFFECT" means any circumstance, change in, or effect on, the Business that, individually or in the aggregate with any other circumstances, changes in, or effects on, the Business: (a) is, or is reasonably likely to be, materially adverse to the Business or the assets or liabilities (including, without limitation, contingent liabilities), results of operations or the condition (financial or otherwise) of the Business, taken as a whole, or (b) materially adversely affects, or is reasonably likely to materially adversely affect, the ability of the Purchaser to operate or conduct the Business in the manner in which it is currently operated or conducted, except, in each case for such circumstances, changes or effects resulting from changes in general economic market conditions or changes that generally affect businesses of the same type as the Business. "MOLTEN ALUMINUM PURCHASE AGREEMENT" means the Molten Aluminum Purchase Agreement to be entered into between Century WV and the Purchaser, in the form attached hereto as Exhibit E. "NET WORKING CAPITAL" means the excess of the current assets over the current liabilities (in each case as set forth on Schedule 1.01(b)) shown on any specified statement of assets and liabilities of the Business prepared on a basis consistent with the preparation of the Reference Balance Sheet. "OWNED INTELLECTUAL PROPERTY" means all Intellectual Property in and to which Century WV or Century CP holds, or has a right to hold, right, title and interest and which, in the case of Century WV, is used in connection with the Business. 6 7 "OWNED REAL PROPERTY" means the Ravenswood Owned Real Property and the Vernon Owned Real Property. "PBGC" means the Pension Benefit Guaranty Corporation. "PBGC AGREEMENT" means the agreement described in Section 6.07. "PERMITTED ENCUMBRANCES" means such of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced: (a) liens for Taxes, assessments and governmental charges or levies not yet due and payable; (b) Encumbrances imposed by Law, such as materialmen's, mechanics', carriers', workmen's, converters', warehousemen's and repairmen's liens and other similar liens arising in the ordinary course of business securing obligations; (c) pledges or deposits to secure obligations under workers' compensation laws or similar legislation or to secure public or statutory obligations; and (d) minor survey exceptions, reciprocal easement agreements and other customary encumbrances on title to real property that (i) were not incurred in connection with any Indebtedness, (ii) do not render title to the property encumbered thereby unmarketable and (iii) do not, individually or in the aggregate, materially adversely affect the value of or the use of such property for its present purposes. "PERMITTED PROPERTY ENCUMBRANCES" means the encumbrances listed in Schedule 1.01(c). "PERSON" means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. "PURCHASER'S ACCOUNTANTS" means PricewaterhouseCoopers, independent accountants of the Purchaser. "RAVENSWOOD INDEMNITY AGREEMENT" means the indemnification agreement relating to the Rolling Business to be entered into between Century WV and the Purchaser, in the form attached hereto as Exhibit F. "RAVENSWOOD OWNED REAL PROPERTY" means the real property listed in Schedule 1.01(d), together with all buildings and other structures, facilities or improvements currently or hereafter located thereon, all fixtures, systems, equipment and items of personal property attached or appurtenant thereto and all easements, licenses, rights and appurtenances relating to the foregoing. "REAL PROPERTY" means the Leased Real Property and the Owned Real Property. 7 8 "RECEIVABLES" means any and all accounts receivable, notes and other amounts receivable from customers arising from the conduct of the Business before the Closing Date, whether or not in the ordinary course, together with any unpaid financing charges accrued thereon. "REFERENCE BALANCE SHEET" means the statement of assets and liabilities of the Business, dated as of December 31, 1998, a copy of which is set forth in Section 3.07(a)(i) of the Disclosure Schedule. "REFERENCE BALANCE SHEET DATE" means December 31, 1998. "REGULATIONS" means the Treasury Regulations (including Temporary Regulations) promulgated by the United States Department of Treasury with respect to the Code or other federal tax statutes. "RELEASE" means disposing, discharging, injecting, spilling, leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing and the like of Hazardous Materials into or upon any land or water or air or otherwise entering into the environment. "REMEDIAL ACTION" means all action to (i) clean up, remove, treat or handle in any other way Hazardous Materials in the environment; (ii) restore or reclaim the environment or natural resources with respect to Hazardous Materials; (iii) prevent the Release of Hazardous Materials so that they do not migrate, endanger or threaten to endanger public health or the environment; or (iv) perform remedial investigations, feasibility studies, corrective actions, closures and postremedial or postclosure studies, investigations, operations, maintenance and monitoring on, about or in any Real Property in each case in respect of Hazardous Materials. "ROLLING BUSINESS" means the business of the casting operation and the manufacture of flat-rolled sheet aluminum (including, without limitation, plate and coil, distributor coil, flat sheet and brazing sheet), in each case at the Ravenswood, West Virginia facility of Century WV and the sale of such products, all as conducted immediately prior to the date hereof. "SELLERS' ACCOUNTANTS" means Deloitte & Touche, L.P., independent accountants of the Sellers. "SENIOR MANAGERS" means the individuals holding, or performing the functions corresponding to, the positions listed in Schedule 1.01(e). "SHARED SERVICES AGREEMENT" means the Shared Services Agreement dated the date hereof between Century WV and the Purchaser. "SUBSIDIARIES" means any and all corporations, partnerships, joint ventures, associations and other entities controlled by Century directly or indirectly (other than Century WV) through one or more intermediaries. 8 9 "TAX" or "TAXES" means any and all taxes, fees, levies, duties, tariffs, imposts, and other charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any government or taxing authority, including, without limitation: taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers' compensation, unemployment compensation, or net worth; taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes; license, registration and documentation fees; and customs' duties, and similar charges. "U.S. GAAP" means United States generally accepted accounting principles and practices in effect from time to time applied consistently throughout the periods involved. "VERNON INDEMNITY AGREEMENT" means the indemnification agreement relating to Century CP to be entered into between Century and the Purchaser, in the form attached hereto as Exhibit G. "VERNON OWNED REAL PROPERTY" means the real property listed in Schedule 1.01(f), together with all buildings and other structures, facilities or improvements currently or hereafter located thereon, all fixtures, systems, equipment and items of personal property attached or appurtenant thereto and all easements, licenses, rights and appurtenances relating to the foregoing. SECTION 1.02. Other Defined Terms. The following terms have the meanings defined for such terms in the Sections set forth below: Term Section ---- ------- Adjusted Pre-Closing NWC Decrease 2.08(b) Adjusted Pre-Closing NWC Increase 2.08(b) Agreed Estimated Net Working Capital 2.08(a) Alcoa 3.17(a)(x) Alcoa Agreement 6.12 Alcoa Plans 6.13(a) Allocation Statement 2.04(b) Assumed Liabilities 2.02(a) Business Assets 3.20(a) Century Preamble Century Common Stock Recitals Century CP Recitals Century CP Plan 3.22(h) Century CP Plans 3.22(h) Century WV Preamble Century WV Shares 3.02(a) 9 10 Term Section ----- ------- Closing 2.05 Closing Date 2.05 Code section 338(h)(10) Election 7.07(a) Collateral 8.02(d) Common Stock Recitals Covered Products 5.07(a) Default Estimated Net Working Capital 2.08(a) Disclosure Schedule Supplements 3.31 Disclosure Schedule Supplement 5.05(a) Elections 7.07(a) Employee Amounts 6.06 ERISA 3.22(a) Excluded Assets 2.01(b) Excluded Liabilities 2.02(b) Final Determination 7.04 Financial Statements 3.07(a) Form 8023 7.07(b) Former Employees 6.03(b) Indemnified Party 9.04(a) Indemnifying Party 9.04(a) Independent Accounting Firm 2.09(b)(ii) Independent Expert 9.05(b) Initial Transfer Amount 6.03(e) Kaiser 3.17(a)(x) Lockheed 8.02(l) Loss 9.02(a) Market Risk Period 6.03(g) Material Contracts 3.17(a) Material Licenses 3.30 Money Market Vehicle 6.03(g) Multiemployer Plan 3.22(b) Multiple Employer Plan 3.22(b) New Collective Bargaining Agreement 2.10(a) New Defined Benefit Plans 6.03(a) New Vernon Plans 6.13(a) Old Collective Bargaining Agreement 2.10(a) PBO Amount 6.03(g) Plans 3.22(a) Purchase Price 2.04(a) Purchaser Preamble Purchaser Indemnified Party 9.02(a) Purchaser's Actuary 6.03(d) Purchaser's Defined Contribution Plans 6.11 10 11 Term Section ---- ------- Reduction Facility 2.01(b)(v) Restricted Period 5.07(a) Returns 7.02 Rolling Assets 2.01(a) Safe Harbor Assumptions 6.03(d) Section 9.02(a)(iii) Loss 9.05(b) Section 9.03 Loss 9.05(b) Selected Business Assets 3.20(a) Seller Indemnified Party 9.03(a) Sellers' Actuary 6.03(d) Sellers' Defined Contribution Plans 6.11 Sellers Estimated Net Working Capital 2.08(a) Sellers' Pension Plans 6.03(b) Sellers' Recitals Shared Intellectual Property 5.12 Shares Recitals Third Party Claims 9.04(a) Title Company 8.02(n) Title Policy 8.02(n) Transferred Benefits 6.03(b) Transferred Employee 6.01 True-Up Amount 6.03(e) True-Up Date 6.03(e) USWA 8.02(k) Vernon Employees 6.13(a) WARN 3.22(g) ARTICLE II PURCHASE AND SALE SECTION 2.01. Purchase and Sale of Assets. (a) On the terms and subject to the conditions of this Agreement, Century WV shall, on the Closing Date, sell, assign, transfer, convey and deliver to the Purchaser or cause to be sold, assigned, transferred, conveyed and delivered to the Purchaser, and the Purchaser shall purchase from Century WV, on the Closing Date, all the assets, properties, goodwill and business of every kind and description and wherever located, whether tangible or intangible, real, personal or mixed, directly or indirectly owned by Century WV or to which Century WV is directly or indirectly entitled and, in any case, belonging to or used in the Rolling Business, other than the Excluded Assets described in Section 2.01(b) (the assets to be purchased by the Purchaser being referred to as the "ROLLING ASSETS"), including, without limitation, the following: 11 12 (i) the Rolling Business as a going concern; (ii) all the Ravenswood Owned Real Property, and all rights in respect of the Leased Real Property; (iii) all furniture, fixtures, equipment, machinery, spare parts, packaging materials, oil and other tangible personal property used or held for use by the Sellers at the locations at which the Rolling Business is conducted (including, without limitation, tangible personal property held in storerooms), or otherwise owned or held by the Sellers at the Closing Date for use in the conduct of the Rolling Business and not otherwise included in clause (ii) above, including, without limitation, the items listed in Schedule 2.01(a)(iii); (iv) all vehicles and transportation equipment, including, without limitation, the items listed in Schedule 2.01(a)(iv); (v) all Inventories of the Rolling Business; (vi) all Receivables of the Rolling Business; (vii) all books of account, general, environmental, health and safety, financial, tax and personnel records, claim and grievance records, environmental reports, invoices, technical records and drawings, shipping records, supplier lists, correspondence and other documents, records and files and all computer software and programs and any rights thereto owned, associated with or employed by the Sellers or used in, or relating to, the Rolling Business at the Closing Date, other than organization documents, minute and stock record books and the corporate seal of the Sellers; (viii) the goodwill of the Sellers relating to the Rolling Business; (ix) subject to Section 5.12, all the Sellers' right, title and interest in, to and under the Owned Intellectual Property and, the Licensed Intellectual Property used in, or relating to, the Rolling Business; (x) all claims, causes of action, choses in action, rights of recovery and rights of set-off of any kind (including rights to insurance proceeds relating to an Assumed Liability and rights under and pursuant to all warranties, representations and guarantees made by suppliers of products, materials or equipment, or components thereof), pertaining to, or arising out of, the Rolling Business and enuring to the benefit of the Sellers; (xi) all sales and promotional literature, customer lists and other sales-related materials owned, used, associated with or employed by the Sellers at the Closing Date used in, or relating to, the Rolling Business; 12 13 (xii) all rights of the Sellers under all contracts, licenses, sublicenses, agreements, leases, commitments, and sales and purchase orders, and under all commitments, bids and offers (to the extent such offers are transferable), used in, or relating to, the Rolling Business including, without limitation, those listed in Schedule 2.01(a)(xii); (xiii) all municipal, state and federal franchises, permits, licenses, agreements, waivers and authorizations held or used by the Sellers in connection with, or required for, the Rolling Business, to the extent transferable, including, without limitation, those listed in Schedule 2.01(a)(xiii); (xiv) all the Sellers' right, title and interest on the Closing Date in, to and under all other assets, rights and claims of every kind and nature used in the operation of, or residing with, the Rolling Business; (xv) to the extent contemplated in the Shared Services Agreement, the membership interest in the LLC; and (xvi) all assets of the Rolling Business to the extent specifically reflected in the Closing Balance Sheet. (b) The Rolling Assets shall exclude the following assets owned or leased by Century WV (the "EXCLUDED ASSETS"): (i) all real property, whether owned or leased, together with, to the extent owned or leased, all buildings and other structures, facilities or improvements currently or hereafter located thereon, and all fixtures, systems and equipment attached or appurtenant thereto other than the Ravenswood Owned Real Property and the Leased Real Property; (ii) all cash, cash equivalents and bank accounts owned by the Century WV at the Closing Date, including, without limitation, all deposits of Century WV as security for workers' compensation claims; (iii) all rights of Century WV under this Agreement and the Ancillary Agreements; (iv) the Oracle GEMMS software and any rights or claims in respect thereof; (v) all the assets, properties and goodwill belonging to or used by Century WV in connection with its operation of its reduction facility in Ravenswood, West Virginia ("REDUCTION FACILITY") which are not also used in the operation of the Business; 13 14 (vi) in respect of assets, properties and goodwill used by both the Reduction Facility and the Rolling Business, such assets, properties and goodwill used primarily by the Reduction Facility; (vii) the assets and properties ownership of which is to be retained by Century WV pursuant to the Shared Services Agreement; and (viii) all rights to insurance proceeds, except to the extent relating to an Assumed Liability, under insurance policies of the Sellers. SECTION 2.02. Assumption and Exclusion of Liabilities. (a) On the terms and subject to the conditions of this Agreement, the Purchaser shall, on the Closing Date, assume and shall agree to pay, perform and discharge when due the following Liabilities of Century WV (the "ASSUMED LIABILITIES"): (i) all Liabilities relating to or arising from the operation of the Rolling Business on or after the Closing Date, except as otherwise provided in Article VI with respect to employee benefit matters; (ii) subject to clause (iii) below, all Liabilities relating to or arising from the ownership or use of the Rolling Assets on or after the Closing Date, including, without limitation, all Liabilities under all claims, suits, actions, contracts, licenses, sublicenses, agreements, leases, commitments, and sales and purchase orders, and under all commitments, bids and offers; (iii) all Liabilities relating to or arising out of Actions brought against the Rolling Business associated with employment actions, omissions or events, including, without limitation, employment discrimination claims and claims for workplace related injuries by employees which occurred or were incurred or accrued on or before the Closing Date; provided that no such Liabilities (other than workers' compensation claims) shall be assumed to the extent they (together with all Liabilities relating to or arising out of Actions (other than workers' compensation claims) brought against Century CP associated with employment actions, omissions or events which were incurred or accrued on or before the Closing Date) exceed $600,000, individually or in the aggregate; (iv) all Liabilities relating to or arising from the matters set forth in Section 3.16(a) of the Disclosure Schedule (other than the Excluded Liabilities as set forth in Section 2.02(b)(vi)); (v) subject to Section 2.02(a)(iii), all Liabilities relating to or arising out of Actions brought against the Rolling Business before, on or after the Closing Date; and 14 15 (vi) all accrued liabilities of the Rolling Business to the extent specifically reflected in the Closing Balance Sheet. (b) Notwithstanding subsection (a) above, Century WV shall retain responsibility for, and the Purchaser shall not assume or have any responsibility for, all Liabilities of Century WV as of the Closing Date other than the Assumed Liabilities (the "EXCLUDED LIABILITIES"), including, without limitation: (i) except to the extent accrued on the Closing Balance Sheet in respect of the Rolling Business, all Taxes now or hereafter owed by the Sellers or any Affiliate of the Sellers, or attributable to the Rolling Assets or the Rolling Business, relating to any period, or any portion of any period, ending on or prior to the Closing Date (as provided in Section 7.01); (ii) except as otherwise provided in Article VI, any Liabilities for benefits, or under any of the Rolling Business' Plans; (iii) all Liabilities relating to or arising out of the Excluded Assets; (iv) all Liabilities relating to or arising out of Actions brought against the Rolling Business (other than workers' compensation claims) associated with employment actions, omissions or events, including, without limitation, employment discrimination claims, and claims for workplace related injuries by employees which occurred or were incurred or accrued on or before the Closing Date, but only to the extent such Liabilities (together with all Liabilities relating to or arising out of Actions (other than workers' compensation claims) brought against Century CP associated with employment actions, omissions or events which were incurred or accrued on or before the Closing Date), individually or in the aggregate, exceed $600,000; (v) all Liabilities in the nature of product liability claims relating to or arising out of allegations of personal injury or property damage suffered by any third party (A) on or prior to the Closing Date or (B) attributable to products sold or shipped, or Inventory purchased or manufactured, in each case in respect of the conduct of the Rolling Business on or prior to the Closing Date; (vi) all Liabilities under Environmental Laws relating to or arising out of (A) Hazardous Material transported from the Ravenswood Real Property pre-Closing; (B) any off-site migration of Hazardous Material resulting from any pre-Closing off-site disposal or Release of such Hazardous Material; (C) any off-site migration of Hazardous Material from the Ravenswood Real Property resulting from any pre-Closing disposal or Release at the Ravenswood Real Property, except (I) in respect of matters set forth in Section 3.16(a) of the Disclosure Schedule, if the Purchaser's actions or inactions are the cause of such off-site migration or (II) in respect of any other pre-Closing disposal or Release at the Ravenswood Real Property, if the Purchaser's negligence is the cause of such off-site migration; and (D) any on-site PCB contamination existing or occurring on 15 16 or before the Closing at the Ravenswood Real Property, or any off-site PCB contamination, whether existing or occurring before or after the Closing, resulting from or arising out of operations at the Ravenswood Real Property on or before the Closing, in each case requiring investigation or remediation or other action under applicable Environmental Law; it being understood that for purposes of this clause 2.02(b)(vi)(D), "Environmental Laws" include regulations adopted by the State of West Virginia or a subdivision thereof after the Closing Date pursuant to statutes enacted before the Closing Date; (vii) all Liabilities in respect of the Oracle GEMMS software and any claims in respect thereof; and (viii) any Indebtedness (other than obligations under equipment leases that have, or should have, been recorded as capital leases) of the Rolling Business. SECTION 2.03. Purchase and Sale of Shares. On the terms and subject to the conditions of this Agreement, on the Closing Date, Century shall sell to the Purchaser, and the Purchaser shall purchase from Century, all the Shares. The sale and purchase of the Shares shall not be consummated unless the sale and purchase of the Rolling Assets is consummated simultaneously, nor shall the sale and purchase of the Rolling Assets be consummated unless the sale and purchase of the Shares is consummated simultaneously. SECTION 2.04. Purchase Price; Allocation of Purchase Price. (a) Subject to the adjustments set forth in Sections 2.08 and 2.09, the purchase price for the Rolling Assets and the Shares shall be U.S.$247,000,000, and the purchase price for the covenants contained in Section 5.07 shall be U.S.$1,000,000 (collectively, the "PURCHASE PRICE"). Within thirty (30) calendar days following the date hereof, the Sellers and the Purchaser shall agree to allocate between the Rolling Assets and the Shares, in accordance with the respective fair market values of the Rolling Assets and the assets of Century CP, the portion of the Purchase Price not allocated to the covenants contained in Section 5.07. Under no circumstances, will the allocations between the Rolling Assets and the Shares be inconsistent with the allocations set forth under Section 7.07(b) of this Agreement. (b) Within sixty (60) calendar days following the Closing, the Purchaser shall prepare and deliver to the Sellers an allocation statement (the "ALLOCATION STATEMENT"), setting forth the allocation of the Purchase Price among the Rolling Assets and any related liability in accordance with Section 1060 of the Code. If, within 30 calendar days after the date of the Purchaser's delivery of the Form 8594, the Sellers reasonably dispute one or more of the computations and allocations reflected on the Form 8594, the Sellers will give written notice to the Purchaser setting forth the computations and allocations that the Sellers believe should be reflected on Form 8594, and the Sellers and the Purchaser will attempt in good faith to promptly agree on a revised Form 8594. If the parties cannot resolve any such dispute within 30 Business Days of the delivery by the Purchaser of the Form 8594 to the Sellers, the items remaining in dispute shall be submitted to an independent accounting firm of international reputation selected by, and mutually acceptable to, the Sellers and the Purchaser. If the independent accounting firm so selected determines that the allocation with respect to any item or items remaining in dispute 16 17 is incorrect and that the Sellers would be materially adversely affected by the incorrectness of such allocation, then the Sellers and the Purchaser shall be bound by the allocation of such items as determined by the independent accounting firm. Otherwise, the Purchaser and the Sellers shall be bound by the allocation with respect to such item or items as prepared by the Purchaser. The independent accounting firm shall make any such determination within 30 Business Days after submission of the remaining disputed items. Any subsequent adjustments to the Purchase Price shall be reflected in the Allocation Statement as revised hereunder in a manner consistent with Treasury Regulation Section 1.1060 1T(f). For all Tax purposes, the Purchaser and the Sellers agree to report the transactions contemplated in this Agreement in a manner consistent with the terms of this Agreement, including the allocations under Section 2.04(a), and that none of them will take any position inconsistent therewith in any Tax return, in any refund claim, in any litigation, or otherwise. Each of the Sellers and the Purchaser agree to cooperate with each other in preparing Form 8594 for filing by each and to furnish the other with a copy of such form prepared in draft within a reasonable period before its filing due date, as well as copies of such forms as filed. SECTION 2.05. Closing. Subject to the terms and conditions of this Agreement, the sale and purchase of the Assets and the assumption of the Assumed Liabilities contemplated by this Agreement shall take place at a closing (the "CLOSING") to be held at the offices of Shearman & Sterling, 599 Lexington Avenue, New York, New York at 10:00 A.M. New York time on the later to occur of (i) September 30, 1999 or (ii) the last Business Day of the month following the fifth Business Day after the later to occur of the (A) expiration or termination of all applicable waiting periods under the HSR Act and (B) satisfaction or waiver of all other conditions to the obligations of the parties set forth in Article VIII, or at such other place or at such other time or on such other date as the Sellers and the Purchaser may mutually agree upon in writing (the day on which the Closing takes place being the "CLOSING DATE"). SECTION 2.06. Closing Deliveries by the Sellers. At the Closing, the Sellers shall deliver or cause to be delivered to the Purchaser: (a) the Bill of Sale, the Deed and such other instruments, in form and substance reasonably satisfactory to the Purchaser, as may be requested by the Purchaser to transfer the Rolling Assets to the Purchaser or evidence such transfer on the public records; (b) stock certificates evidencing the Shares duly endorsed in blank, or accompanied by stock powers duly executed in blank, in form reasonably satisfactory to the Purchaser and with all required stock transfer tax stamps affixed; (c) executed counterparts of the Assumption Agreement, the Molten Aluminum Purchase Agreement, the Shared Services Agreement, the Management Services Agreement, the Vernon Indemnity Agreement and the Ravenswood Indemnity Agreement; 17 18 (d) a receipt for the Purchase Price; and (e) the certificates, deliveries and other documents required to be delivered pursuant to Section 8.02. SECTION 2.07. Closing Deliveries by the Purchaser. At the Closing, the Purchaser shall deliver to the Sellers: (a) the Purchase Price by wire transfer in immediately available funds to an account or accounts designated at least three Business Days prior to the Closing Date by the Sellers in a written notice to the Purchaser; (b) executed counterparts of the Assumption Agreement, the Molten Aluminum Purchase Agreement, the Shared Services Agreement, the Management Services Agreement, the Vernon Indemnity Agreement and the Ravenswood Indemnity Agreement; and (c) the certificates, deliveries and other documents required to be delivered pursuant to Section 8.01. SECTION 2.08. Pre-Closing Adjustment of Purchase Price. (a) On or around the tenth Business Day preceding the Closing Date, the Sellers shall in good faith estimate the Net Working Capital as of the last calendar day of the immediately preceding month (the "SELLERS ESTIMATED NET WORKING CAPITAL") and deliver to the Purchaser in accordance with Section 11.02 a notice specifying the Sellers Estimated Net Working Capital and the basis, in reasonable detail, for such calculation. The Purchaser shall have three Business Days to review the Sellers Estimated Net Working Capital during which time the Sellers shall in good faith assist the Purchaser in such review. After such three Business Day review period shall have terminated, either (i) the parties shall have, acting in good faith, mutually agreed an estimate of the Net Working Capital as of the last calendar day of the immediately preceding month (the "AGREED ESTIMATED NET WORKING CAPITAL") or (ii) the Sellers, on the one hand, and the Purchaser, on the other hand, shall have, acting in good faith, each determined an estimate of the Net Working Capital as of the last calendar day of the immediately preceding month (the determination closest to the Net Working Capital reflected on the Reference Balance Sheet being hereinafter referred to as the "DEFAULT ESTIMATED NET WORKING CAPITAL"). (b) Following determination of the Agreed Estimated Net Working Capital or the Default Estimated Net Working Capital, as the case may be, the Purchase Price shall be adjusted as follows: (i) in the event that the Agreed Estimated Net Working Capital or the Default Estimated Net Working Capital, as the case may be, exceeds the Net Working Capital reflected on the Reference Balance Sheet, then the Purchase Price shall be adjusted 18 19 upward by an amount equal to 50% of such excess (the "ADJUSTED PRE-CLOSING NWC INCREASE"); and (ii) in the event that the Agreed Estimated Net Working Capital or the Default Estimated Net Working Capital, as the case may be, is less than the Net Working Capital reflected on the Reference Balance Sheet, then the Purchase Price shall be adjusted downward by an amount equal to 50% of such shortfall (the "ADJUSTED PRE-CLOSING NWC DECREASE"). SECTION 2.09. Post-Closing Adjustment of Purchase Price. The Purchase Price shall be subject to adjustment after the Closing as specified in this Section 2.09: (a) Closing Balance Sheet. As promptly as practicable, but in any event within 90 calendar days following the Closing Date, the Purchaser shall deliver to the Sellers the Closing Balance Sheet, together with a certificate of the Purchaser thereon that the Closing Balance Sheet was prepared on a basis consistent with the preparation of the Reference Balance Sheet. (b) Disputes. (i) Subject to clause (ii) of this Section 2.09(b), the Closing Balance Sheet delivered by the Purchaser to the Sellers shall be deemed to be and shall be final, binding and conclusive on the parties hereto. (ii) The Sellers may dispute any amounts reflected on the Closing Balance Sheet to the extent the net effect of such disputed amounts in the aggregate would affect the Net Working Capital reflected on the Closing Balance Sheet by more than the Designated Amount, but only on the basis that the amounts reflected on the Closing Balance Sheet were not prepared in accordance with the same U.S. GAAP, applied on a basis consistent with the preparation of the Reference Balance Sheet; provided, however, that the Sellers shall have notified the Purchaser in writing of each disputed item, specifying the amount thereof in dispute and setting forth, in reasonable detail, the basis for such dispute, within 30 Business Days of the Purchaser's delivery of the Closing Balance Sheet to the Sellers. In the event of such a dispute, the Sellers' Accountants and the Purchaser's Accountants shall attempt to reconcile their differences, and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the parties hereto. If any such resolution by the Purchaser's Accountants and the Sellers' Accountants leaves in dispute amounts the net effect of which in the aggregate would not affect the Net Working Capital reflected on the Closing Balance Sheet by more than the Designated Amount, all such amounts remaining in dispute shall then be deemed to have been resolved in favor of the Closing Balance Sheet delivered by the Purchaser to the Sellers. If the Sellers' Accountants and the Purchaser's Accountants are unable to reach a resolution with such effect within 20 Business Days after receipt by the Purchaser of the Sellers' written notice of dispute, the Sellers' Accountants and the Purchaser's Accountants shall submit the items remaining in dispute for resolution to an independent accounting firm of international reputation mutually acceptable to the Purchaser and the 19 20 Sellers (the "INDEPENDENT ACCOUNTING FIRM"), which shall, within 60 Business Days after such submission, determine and report to the Purchaser and the Sellers upon such remaining disputed items, and such report shall be final, binding and conclusive on the Sellers and the Purchaser. The fees and disbursements of the Independent Accounting Firm shall be allocated between the Sellers and the Purchaser in the same proportion that the aggregate amount of such remaining disputed items so submitted to the Independent Accounting Firm that is unsuccessfully disputed by each such party (as finally determined by the Independent Accounting Firm) bears to the total amount of such remaining disputed items so submitted. (iii) In acting under this Agreement, the Purchaser's Accountants, the Sellers' Accountants and the Independent Accounting Firm shall be entitled to the privileges and immunities of arbitrators. (iv) No adjustment to the Purchase Price pursuant to Section 2.09(c) shall be made with respect to amounts disputed by the Sellers pursuant to this Section 2.09(b), unless the net effect of the amounts successfully disputed by the Sellers in the aggregate is to increase the Net Working Capital reflected on the Closing Balance Sheet by at least the Designated Amount. (c) Purchase Price Adjustment. The Closing Balance Sheet shall be deemed final for the purposes of this Section 2.09 upon the earlier of (A) the failure of the Sellers to notify the Purchaser of a dispute within 30 Business Days of the Purchaser's delivery of the Closing Balance Sheet to the Sellers, (B) the resolution of all disputes, pursuant to Section 2.09(b)(ii), by the Purchaser's Accountants and the Sellers' Accountants and (C) the resolution of all disputes, pursuant to Section 2.09(b)(ii), by the Independent Accounting Firm. Subject to the limitation set forth in Section 2.09(b)(iv), within three Business Days of the Closing Balance Sheet being deemed final, a Purchase Price adjustment shall be made as follows: (i) In the event that the Adjusted Reference Net Working Capital exceeds the Net Working Capital reflected on the Closing Balance Sheet by at least the Designated Amount, then the Purchase Price shall be adjusted downward in an amount equal to the full amount by which the Adjusted Reference Net Working Capital exceeds the Net Working Capital shown on the Closing Balance Sheet, the Purchaser shall deliver written notice to the Sellers specifying the amount of such downward adjustment of the Purchase Price, and the Sellers shall, within three Business Days of their receipt of such notice, pay such amount to the Purchaser in immediately available funds. (ii) In the event that the Net Working Capital reflected on the Closing Balance Sheet exceeds the Adjusted Reference Net Working Capital by at least the Designated Amount, then the Purchase Price shall be adjusted upward in an amount equal to the full amount by which the Net Working Capital shown on 20 21 the Closing Balance Sheet exceeds the Adjusted Reference Net Working Capital and the Purchaser shall, within three Business Days of such determination, pay the amount of such excess to the Sellers by wire transfer in immediately available funds. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS As an inducement to the Purchaser to enter into this Agreement, the Sellers hereby represent and warrant, jointly and severally, to the Purchaser as follows: SECTION 3.01. Organization, Authority and Qualification of the Sellers. Each of the Sellers is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all necessary power and authority to enter into this Agreement and the Ancillary Agreements to which it is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. Each of the Sellers is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business makes such licensing or qualification necessary, except to the extent that the failure to be so licensed or qualified would not adversely affect (i) the ability of such Seller to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement and the Ancillary Agreements to which it is a party and (ii) the ability of the Sellers and the Subsidiaries to conduct the Business in any material respect. The execution and delivery by each of the Sellers of this Agreement and the Ancillary Agreements to which it is a party, the performance by each of the Sellers of its obligations hereunder and thereunder and the consummation by each of the Sellers of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of each of the Sellers. This Agreement has been, and upon their execution the Ancillary Agreements will be, duly executed and delivered by each of the Sellers that is a party thereto, and (assuming due authorization, execution and delivery by the Purchaser) this Agreement constitutes, and upon their execution the Ancillary Agreements to which each Seller is a party will constitute, legal, valid and binding obligations of such Seller enforceable against such Seller in accordance with their respective terms. SECTION 3.02. Capital Stock and Ownership. (a) Century owns all of the authorized, issued and outstanding shares of capital stock of Century WV (the "CENTURY WV SHARES") free and clear of all Encumbrances. There are no options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the capital stock of Century WV or obligating either Century WV or Century to issue or sell any shares of capital stock of, or other interest in, Century WV. 21 22 (b) The Shares constitute all the authorized, issued and outstanding shares of capital stock of Century CP. The Shares have been duly authorized and validly issued and are fully paid and nonassessable. None of the issued and outstanding shares of Common Stock was issued in violation of any preemptive rights. There are no options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the capital stock of Century CP or obligating either Century CP or Century to issue or sell any shares of capital stock of, or other interest in, Century CP. There are no outstanding contractual obligations of Century CP to repurchase, redeem or otherwise acquire any shares of Common Stock or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any other Person. The Shares are owned of record and beneficially by Century free and clear of all Encumbrances. Upon consummation of the transactions contemplated by this Agreement, the Purchaser will own all the issued and outstanding capital stock of Century CP, free and clear of all Encumbrances, and the Shares will be fully paid and nonassessable. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares. SECTION 3.03. Subsidiaries. (a) Century CP owns, whether of record or beneficially, no direct or indirect equity or other interest in any corporation, partnership, joint venture, association or other entity or any right (contingent or otherwise) to acquire the same. Century CP is not a member of (nor is any part of the Business conducted through) any partnership, nor is Century CP a participant in any joint venture or similar arrangement. (b) Century CP: (i) is a corporation duly organized and validly existing under the laws of its jurisdiction of incorporation, (ii) has all necessary power and authority to own, operate or lease the properties and assets owned, operated or leased by it and to carry on its business as it has been and is currently conducted and (iii) is in all material respects duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of its business makes such licensing or qualification necessary or desirable. (c) All material corporate actions taken by Century CP have been duly authorized and it has taken no material action that conflicts with, constitutes a default under or results in a violation of any provision of its charter or By-laws (or similar organizational documents). True and complete copies of the charter and By-laws (or similar organizational documents), in each case as in effect on the date hereof, of Century CP have been delivered by the Sellers to the Purchaser. SECTION 3.04. Books and Records. The minute books of Century CP contain in all material respects accurate records of all meetings and accurately reflect in all material respects all other actions taken by the stockholders, Board of Directors and all committees of the Board of Directors of Century CP. Complete and accurate copies of all such minute books of Century CP and of the stock register of Century CP have been provided by the Sellers to the Purchaser. Complete and accurate copies of all minute books of meetings held since January 1, 1996 of the stockholders, Boards of Directors, and all committees thereof, of the Sellers, which 22 23 contain references to matters material, or which with the passage of time could reasonably be expected to become material, to the Business, have been provided by the Sellers to the Purchaser (but only to the extent of discussions of such matters). SECTION 3.05. No Conflict. Except as may result from any facts or circumstances relating solely to the Purchaser or as described in Section 3.06, the execution, delivery and performance by each of the Sellers of this Agreement and the Ancillary Agreements to which it is a party do not and will not (a) violate, conflict with or result in the breach of any provision of the charter or By-laws (or similar organizational documents) of any of the Sellers or Century CP, (b) materially conflict with or violate (or cause an event which would be reasonably likely to have a Material Adverse Effect as a result of) any Law or Governmental Order applicable to any of the Sellers, Century CP or any of their respective assets, properties or businesses or (c) except as set forth in Section 3.05(c) of the Disclosure Schedule or as would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect, conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Encumbrance on any of the Rolling Assets or the assets or properties of Century CP pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which any of the Sellers or Century CP is a party or by which any of such assets or properties is bound or affected. SECTION 3.06. Governmental Consents and Approvals. The execution, delivery and performance by each of the Sellers of this Agreement and each Ancillary Agreement to which it is a party does not and will not require any consent, approval, authorization or other order of, action by, filing with or notification to, any Governmental Authority, except (a) as described in Section 3.06 of the Disclosure Schedule and (b) the requirements of the HSR Act. SECTION 3.07. Financial Information; Books and Records. (a) True and complete copies of the Reference Balance Sheet and the related statement of operations of the Business (collectively referred to herein as the "FINANCIAL STATEMENTS") have been delivered by the Sellers to the Purchaser. Except as set forth in Section 3.07(a) of the Disclosure Schedule, the Financial Statements (i) were prepared in all material respects from the books of account and other financial records of the Sellers and Century CP, (ii) present fairly in all material respects the financial condition and results of operations of the Business as of the dates thereof or for the periods covered thereby and (iii) have been prepared in accordance with the same U.S. GAAP as applied in the preparation of the consolidated financial statements of Century as of, and for the year ended, December 31, 1998. (b) The books of account and other financial records of the Sellers and Century CP for fiscal years 1997, 1998 and 1999 and, in the case of Century CP, since its formation in December 1998: (i) fairly present in all material respects all items of income and expense and all assets and Liabilities required to be reflected therein in accordance with U.S. 23 24 GAAP applied on a basis consistent with the past practices of the Sellers, and throughout the periods involved, (ii) are in all material respects complete and do not contain or reflect any material inaccuracies or discrepancies and (iii) have been maintained in all material respects in accordance with good business and accounting practices. SECTION 3.08. No Undisclosed Liabilities. There are no Liabilities of the Business, other than Liabilities (i) reflected or reserved against on the Reference Balance Sheet, (ii) disclosed in Section 3.08 of the Disclosure Schedule (or as otherwise disclosed in the Disclosure Schedule if the relevance to this Section 3.08 is reasonably apparent from the facts specified in such disclosure), (iii) incurred since the date of this Agreement in the ordinary course of business, consistent with past practice, of the Business and which do not and would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect or (iv) of a kind and type that would not be required to be disclosed in a financial statement prepared in accordance with U.S. GAAP and which do not and would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect. Reserves are reflected on the Reference Balance Sheet against all Liabilities of the Business as of the date thereof, other than Liabilities relating to the Excluded Liabilities, in amounts that have been established on a basis consistent with the past practices of the Sellers and in accordance with U.S. GAAP. SECTION 3.09. Receivables. Section 3.09 of the Disclosure Schedule is an aged list of the Receivables as of the Reference Balance Sheet Date showing separately those Receivables that as of such date had been outstanding (i) for less than the due date, (ii) 1 to 15 days past due, (iii) 16 to 30 days past due, (iv) 31 to 60 days past due and (v) over 60 days past due. Except to the extent, if any, reserved for on the Reference Balance Sheet, all Receivables reflected on the Reference Balance Sheet arose in all material respects from, and the Receivables existing on the Closing Date will have arisen in all material respects from, the sale of Inventory or services to Persons in the ordinary course of the Business consistent with past practice and, except as reserved against on the Reference Balance Sheet, constitute or will constitute in all material respects, as the case may be, only valid, undisputed claims of the Business not subject to valid claims of set-off or other defenses or counterclaims other than normal cash discounts accrued in the ordinary course of the Business consistent with past practice. All Receivables reflected on the Reference Balance Sheet or arising from the date thereof until the Closing are, or will be, reserved for in accordance with the same U.S. GAAP as applied in the preparation of the consolidated financial statements of Century as of and for the year ended, December 31, 1998. SECTION 3.10. Inventories. (a) Subject to amounts reserved therefor on the Reference Balance Sheet, the values at which all Inventories are carried on the Reference Balance Sheet reflect the historical inventory valuation policy of Century WV and Century CP of stating such Inventories at the lower of cost (determined principally on the last-in, first-out method) or market value. Except as set forth in Section 3.10 of the Disclosure Schedule and for Encumbrances described in clause (b) of the definition of "Permitted Encumbrances", the Business has good and marketable title to the Inventories free and clear of all Encumbrances. The Inventories do not consist of any items held on consignment. The Business is not under any obligation or liability with respect to accepting returns of items of Inventory or merchandise in 24 25 the possession of its customers other than in the ordinary course of the Business consistent with past practice. No clearance or extraordinary sale of the Inventories has been conducted since the Reference Balance Sheet Date. The Business has not acquired or committed to acquire or manufactured Inventory for sale which is not of a quality and quantity usable in the ordinary course of the Business within a reasonable period of time and consistent with past practice nor has the Business changed the price of any Inventory except for (i) price reductions to reflect any reduction in the cost thereof to the Business, (ii) reductions and increases responsive to normal competitive conditions and consistent with the Business' past sales practices, (iii) increases to reflect any increase in the cost thereof to the Business and (iv) increases and reductions made with the written consent of the Purchaser. Section 3.10 of the Disclosure Schedule contains a complete list of the addresses of all warehouses and other facilities in which the Inventories are located. (b) The Inventories are in all material respects in a condition such that they can be sold in the ordinary course of the Business consistent with past practice. All Inventories reflected in the Reference Balance Sheet or arising from the date hereof until the Closing are, or will be, recorded in accordance with the same U.S. GAAP as applied in the preparation of the consolidated financial statements of Century as of and for the year ended, December 31, 1998. SECTION 3.11. Public Filings. None of Century WV or the Subsidiaries is required to file any forms, reports or other documents with the SEC. SECTION 3.12. Sales and Purchase Order Backlog. (a) As of the Reference Balance Sheet Date, open sales orders accepted by the Business totaled approximately $117,000,000, and, as of a date not more than ten days prior to the date hereof, open sales orders accepted by the Business totaled approximately $126,000,000. Section 3.12(a) of the Disclosure Schedule lists all sales orders exceeding $100,000 per order, which have been accepted by the Business, and which were open either as of the Reference Balance Sheet Date or as of such date not more than ten days prior to the date hereof. (b) As of the Reference Balance Sheet Date, open purchase orders issued by the Business totaled approximately $17,000,000, and, as of the date referred to in Section 3.12(a) not more than ten days prior to the date hereof, open purchase orders issued by the Business totaled approximately $15,000,000. Section 3.12(b) of the Disclosure Schedule lists all purchase orders exceeding $100,000 per order, which have been issued by the Business, and which were open either as of the Reference Balance Sheet Date or as of such date not more than ten days prior to the date hereof. SECTION 3.13. Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Since the Reference Balance Sheet Date, except as disclosed in Section 3.13 of the Disclosure Schedule, the Business has been conducted in the ordinary course and consistent with past practice. As amplification and not limitation of the foregoing, except as disclosed in Section 3.13 of the Disclosure Schedule and except as would not, individually or in 25 26 the aggregate, be reasonably likely to have a Material Adverse Effect, since the Reference Balance Sheet Date, none of the Sellers or Century CP has: (a) permitted or allowed any of the assets or properties (whether tangible or intangible) of the Business to be subjected to any Encumbrance, other than Permitted Encumbrances and Encumbrances that will be released at or prior to the Closing; (b) except in the ordinary course of the Business consistent with past practice, discharged or otherwise obtained the release of any Encumbrance relating to the Business or paid or otherwise discharged any Liability of the Business, other than current liabilities reflected on the Reference Balance Sheet and current liabilities incurred in the ordinary course of the Business consistent with past practice since the date of the Reference Balance Sheet; (c) written down or written up (or failed to write down or write up) the value of any Inventories or Receivables or revalued any assets of the Business other than in the ordinary course of the Business consistent with past practice and in accordance with the same U.S. GAAP as applied in the preparation of the consolidated financial statements of Century as of and for the year ended, December 31, 1998; (d) made any change in any method of accounting or accounting practice or policy related to the Business, other than such changes required by U.S. GAAP; (e) amended, terminated, canceled or compromised any material claims of the Business or waived any other rights of substantial value to the Business; (f) sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including, without limitation, leasehold interests and intangible property), other than in the ordinary course of the Business consistent with past practice; (g) issued or sold any capital stock, notes, bonds or other securities, or any option, warrant or other right to acquire the same, of Century CP; (h) redeemed any of the capital stock of Century CP or declared, made or paid any dividends or distributions (whether in cash, securities or other property) to the holders of Century CP's capital stock; (i) in relation to Century CP or the Business, merged with, entered into a consolidation with or acquired an interest of 5% or more in any Person or acquired a substantial portion of the assets or business of any Person or any division or line of business thereof, or otherwise acquired any material assets other than in the ordinary course of the Business consistent with past practice; 26 27 (j) made any commitment for any capital expenditure in respect of the Business that will not be expended as of the Closing Date in excess of $1,000,000 in the aggregate; (k) made any material changes in the customary methods of operations of the Business, including, without limitation, practices and policies relating to manufacturing, purchasing, marketing, selling and pricing; (l) made any express or deemed election or settled or compromised any liability, with respect to Taxes of the Business; (m) in the case of Century CP, incurred any Indebtedness which will not be repaid in full prior to Closing, except for obligations under letters of credit or in respect of bonds posted in the ordinary course of business consistent with past practice; (n) in the case of Century CP, made any loan to, guaranteed any Indebtedness of or otherwise incurred any Indebtedness on behalf of any Person; (o) failed in any material respect to pay any creditor any amount owed to such creditor when due; (p) (A) established or increased or promised to increase the benefits under any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including, without limitation, the granting of stock options, stock appreciation rights, performance awards or other restricted stock awards), stock purchase or other employee benefit plan or otherwise increased or promised to increase the compensation payable or to become payable to any directors, officers or employees of the Business, or (B) paid any benefit not required by any plan or agreement as in effect as of the date hereof; in either case except as required by Law or any collective bargaining agreement or involving ordinary increases consistent with the past practice of the Business; (q) entered into any employment or severance agreement with any of the employees of the Business; (r) terminated, discontinued, closed or disposed of any plant, material facility or other material business operation, or laid off any employees (other than layoffs in the ordinary course of the Business consistent with past practice) or implemented any early retirement, separation or program providing early retirement window benefits within the meaning of Section 1.401(a)-4 of the Regulations or announced or planned any such action or program for the future; 27 28 (s) entered into any collective bargaining agreement or contract with the labor union or collective bargaining representative without the prior written consent of the Purchaser (other than the New Collective Bargaining Agreement); (t) disclosed any material secret or confidential Intellectual Property (except by way of issuance of a patent) or permitted to lapse or go abandoned any material Intellectual Property (or any registration or grant thereof or any application relating thereto) to which, or under which, the Business has any right, title, interest or license; (u) allowed any Material License or material Environmental Permit that was issued or relates to the Business to lapse or terminate; (v) failed to maintain the Business' plants, property and equipment in good repair and operating condition, as compared to the condition thereof as of the Reference Balance Sheet Date, ordinary wear and tear excepted; (w) suffered any casualty loss or damage with respect to any of the Rolling Assets or Century CP's properties or assets which in the aggregate have a replacement cost of more than $500,000, whether or not such losses or damages shall have been covered by insurance; (x) amended or restated the charter or By-laws (or other organizational documents) of Century CP; (y) suffered any Material Adverse Effect; (z) entered into any contract or agreement in respect of the Business (i) between or among the Sellers or any Affiliate of the Sellers or (ii) with Glencore International AG or any of its Affiliates; (aa) (i) amended any policy of the Business relating to the payment of accounts payable or accounts receivable; (ii) cancelled, or modified the terms and conditions of payment of, any amounts due the Business in respect of accounts receivable; or (iii) accelerated, or modified the terms and conditions of payment of, any amounts payable by the Business in respect of accounts payable; except in the case of clauses (i) or (ii), in the ordinary course of business consistent with past practice; or (bb) agreed, whether in writing or otherwise, to take any of the actions specified in this Section 3.13 or granted any options to purchase, rights of first refusal, rights of first offer or any other similar rights with respect to any of the actions specified in this Section 3.13, except as expressly contemplated by this Agreement and the Ancillary Agreements. SECTION 3.14. Litigation. Except as set forth in Section 3.14 of the Disclosure Schedule, there are no material Actions by or against the Business, or affecting any of the 28 29 properties or assets of the Business, including, without limitation, the Assets, pending before any Governmental Authority (or, to the knowledge of the Sellers, threatened to be brought by or before any Governmental Authority), provided that for purposes hereof an Action shall not be deemed material if the sole damages are monetary and the monetary Liability is less than $250,000. None of the matters disclosed in Section 3.14 of the Disclosure Schedule, individually or in the aggregate, has had or would be reasonably likely to have a Material Adverse Effect or could adversely affect the legality, validity or enforceability of this Agreement, any Ancillary Agreement or the consummation of the transactions contemplated hereby or thereby. SECTION 3.15. Compliance with Laws. Except as set forth in Section 3.15 of the Disclosure Schedule and except for environmental matters, real property matters, employee, compensation and benefit matters, labor matters and tax matters, as to which the provisions of Sections 3.16, 3.19, 3.22, 3.23 and 3.25, respectively, shall apply, the Sellers have conducted and continue to conduct the Business in all material respects in accordance with all Laws and Governmental Orders applicable to the Business or any of the properties or assets of the Business, including, without limitation, the Assets, and the Business is not in violation of any such Law or Governmental Order in any material respect. SECTION 3.16. Environmental Matters. (a) Except as disclosed in Section 3.16(a) of the Disclosure Schedule: (i) Each of the Sellers and Century CP is in material compliance with all applicable Environmental Laws and all Environmental Permits related to the Business or the Real Property. All noncompliance with Environmental Laws or Environmental Permits in respect of the Business in the last three years has been resolved without any material pending, ongoing or future obligation, cost or liability. (ii) There are no underground or aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any of the Real Property, except where the existence thereof would not be reasonably likely to result in any material Liability. (iii) None of the Sellers or Century CP has, and to the knowledge of the Sellers, no other Person has, Released Hazardous Materials on any of the Real Property in a manner that would be reasonably likely to result in material Liability. (iv) None of the Sellers or Century CP is conducting, or has undertaken or completed, any Remedial Action relating to any Release or threatened Release at the Real Property currently or formerly owned or operated by the Sellers or Century CP or at any other off-site location in respect of the Business, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law or Environmental Permit. 29 30 (v) There is no asbestos or asbestos-containing material on any of the Real Property. (vi) To the knowledge of the Sellers, none of the Real Property is listed or has been proposed for listing on the National Priorities List or the Comprehensive Environmental Response, Compensation and Liability Information System under the federal Comprehensive Environmental Response, Compensation, and Liability Act or any analogous federal, state or local list. (vii) There are no material Environmental Claims pending or, to the knowledge of the Sellers, threatened against (a) any of the Sellers or Century CP relating to the Business, (b) the Business or (c) the Real Property, and to the knowledge of the Sellers, there are no circumstances that can reasonably be expected to form the basis of any such Environmental Claim in respect of the Business, including without limitation with respect to any off-site disposal location presently or formerly used by any of the Sellers or Century CP or any of their predecessors or with respect to any previously owned or operated facilities. (viii) There are no wetlands or any areas subject to any legal requirement or restriction in any way related to wetlands (including, without limitation, requirements or restrictions related to buffer or transition areas or open waters) at or affecting the Real Property. (b) The Sellers have provided the Purchaser the opportunity to review copies of any environmental assessment or audit reports or other material studies or analyses in their possession relating to the Business or the Real Property (excluding routine in-house reporting, monitoring and correspondence). (c) Except as disclosed in Section 3.16(c) of the Disclosure Schedule, and for notices, petitions and filings as may be required for the transfer of Environmental Permits to the Purchaser or, if such transfer is not permitted under applicable Law, for the Purchaser to obtain such Permits, neither the execution of this Agreement nor the consummation of the transactions contemplated herein will require any Remedial Action or notice to or consent of Governmental Authorities or third parties pursuant to any applicable Environmental Law or Environmental Permit. (d) For avoidance of doubt, the Sellers shall, in respect of the Ravenswood Real Property, retain, and in respect of the Vernon Owned Real Property, hold the Purchaser harmless for, all Liabilities relating to or arising from (i) Hazardous Material transported from the Real Property pre-Closing; (ii) any off-site migration of Hazardous Material resulting from any pre-Closing off-site disposal or Release of such Hazardous Material; (iii) any off-site migration of Hazardous Material from the Real Property resulting from any pre-Closing disposal or Release at the Real Property, except (I) in respect of matters set forth in Section 3.16(a) of the Disclosure Schedule, if the Purchaser's actions or inactions are the cause of such off-site 30 31 migration or (II) in respect of any other pre-Closing disposal or Release at the Real Property, if the Purchaser's negligence is the cause of such off-site migration; and (iv) any on-site PCB contamination existing or occurring on or before the Closing at the Real Property, or any off-site PCB contamination, whether existing or occurring before or after the Closing, resulting from or arising out of operations at the Real Property on or before the Closing, in each case requiring investigation or remediation or other action under applicable Environmental Law; it being understood that for purposes of this clause 3.16(d)(iv), "Environmental Laws" include regulations adopted by the State of West Virginia or the State of California, as the case may be, or a subdivision thereof, after the Closing Date pursuant to statutes enacted before the Closing Date. (e) For avoidance of doubt, notwithstanding anything to the contrary contained in Section 3.16(a) of the Disclosure Schedule, the Purchaser shall also be indemnified for environmental matters to the extent provided in the Ravenswood Indemnity Agreement and the Vernon Indemnity Agreement. (f) Section 3.16(f) of the Disclosure Schedule lists all Environmental Permits used or held in the conduct of the Business. (g) Except as disclosed in Section 3.16(g) of the Disclosure Schedule, to the knowledge of the Sellers, no PCBs have been Released at, on or beneath any of the Real Property or are migrating to or from any of the Real Property; it being understood, for avoidance of doubt, that the requirement of disclosure under this Section 3.16(g) is not intended to alter the allocation of liability with respect to PCBs as otherwise provided for in this Agreement. SECTION 3.17. Material Contracts. (a) Section 3.17(a) of the Disclosure Schedule lists each of the following contracts and agreements (including, without limitation, oral and informal arrangements) of the Sellers or Century CP in respect of the Business (such contracts and agreements, together with all contracts, agreements, leases and subleases concerning the management or operation of any Real Property (including, without limitation, brokerage contracts) listed or otherwise disclosed in Section 3.19(a) or 3.19(b) of the Disclosure Schedule to which any Seller or Century CP is a party and all agreements relating to Intellectual Property set forth in Section 3.18(a) of the Disclosure Schedule, being "MATERIAL CONTRACTS"): (i) each contract, agreement, invoice, purchase order and other arrangement, for the purchase of Inventory, spare parts, other materials or personal property with any supplier or for the furnishing of services to the Business under the terms of which the Business is likely to pay or otherwise give consideration of more than $500,000 in the aggregate over the remaining term of such contract; (ii) each contract, agreement, invoice, sales order and other arrangement, for the sale of Inventory or other personal property or for the furnishing of services by the Business which is likely to involve consideration of more than $500,000 in the aggregate over the remaining term of such contract; 31 32 (iii) all material broker, distributor, dealer, manufacturer's representative, franchise, agency, sales promotion contracts and agreements, and all material market research, marketing consulting and advertising contracts and agreements; (iv) all material contracts and agreements in respect of the Business with any Governmental Authority; (v) all employment, termination, severance or consulting contracts or agreements with a current employee or former employee or current or former director of or consultant of the Business that is not terminable at will by the employer; (vi) all collective bargaining agreements or contracts relating to the Business with any labor union; (vii) all contracts and agreements that limit the ability of the Business to compete in any line of business or with any Person or in any geographic area or during any period of time; (viii) all contracts, agreements, hedges and other arrangements in respect of the Business (A) between or among the Sellers or any Affiliate of the Sellers, (B) with Glencore International AG or any of its Affiliates or (C) relating to and between the Business and the Reduction Facility; (ix) all contracts and agreements for the provision of utilities (including, without limitation, electricity, gas and conversion services) to the Business; (x) all contracts and agreements with Kaiser Aluminum & Chemical Corporation ("KAISER") or Aluminum Company of America ("ALCOA") or any of their Affiliates pursuant to which Kaiser or Alcoa has agreed to indemnify the Sellers or Century CP in respect of the Business, pursuant to which the Business may be liable to Kaiser or Alcoa or pursuant to which Kaiser or Alcoa would have Liabilities owing to the Business; (xi) all contracts and agreements related to the provision of services pursuant to any employee health or welfare benefit plans; and (xii) all other contracts and agreements, whether or not made in the ordinary course of the Business, the absence of which, individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect. For purposes of this Section 3.17 and Sections 3.19 and 3.20, the term "LEASE" shall include any and all leases, subleases, sale/leaseback agreements or similar arrangements. (b) Except as disclosed in Section 3.17(b) of the Disclosure Schedule, each Material Contract s valid and binding on the Sellers and/or Century CP, as the case may be, and is in all material respects in full force and effect. None of the Sellers or Century CP is in any 32 33 material respect in breach of, or default under, any Material Contract. The failure to obtain any consents or waivers in respect of the Material Contracts in connection with the execution, delivery and consummation of this Agreement will not, individually or in the aggregate, have a Material Adverse Effect. (c) Except as disclosed in Section 3.17(c) of the Disclosure Schedule, to the knowledge of the Sellers, no other party to any Material Contract is in any material respect in breach thereof or default thereunder. (d) Alcoa and its Affiliates have fully performed all their obligations under the Transition Services Agreement dated as of December 31, 1998 between Century and Alcoa, and have no further Liabilities to the Business under such Agreement. SECTION 3.18. Intellectual Property. (a) Section 3.18(a)(i) of the Disclosure Schedule sets forth a true and complete list and a brief description of all material Owned Intellectual Property and Section 3.18(a)(ii) of the Disclosure Schedule sets forth a true and complete list and a brief description of all material Licensed Intellectual Property. Except as disclosed in Section 3.18(a)(iii) of the Disclosure Schedule, the rights of the Sellers or Century CP in or to such material Owned Intellectual Property or, to the knowledge of the Sellers, such material Licensed Intellectual Property do not in any material respect conflict with or infringe on the rights of any other Person and none of the Sellers or Century CP has received any claim or written notice from any Person to such effect. (b) Except as disclosed in Section 3.18(b) of the Disclosure Schedule: (i) all the material Owned Intellectual Property is owned by a Seller or Century CP, as the case may be, free and clear of any Encumbrance, (ii) no material Actions have been made or asserted or are pending (nor, to the knowledge of the Sellers has any such Action been threatened) against a Seller or Century CP either (A) based upon or challenging or seeking to deny or restrict the use by the Business of any of the Owned Intellectual Property or (B) alleging that any services provided, or products manufactured or sold by the Business are being provided, manufactured or sold in violation of any patents or trademarks, or any other rights of any Person and (iii) to the knowledge of the Sellers, no Person is using any patents, copyrights, trademarks, service marks, trade names, trade secrets or similar property that are confusingly similar to the material Owned Intellectual Property or that infringe upon the material Owned Intellectual Property or upon the rights of the Sellers or Century CP therein. Except as disclosed in Section 3.18(b) of the Disclosure Schedule, none of the Sellers or any of their Affiliates has granted any license or other right to any other Person with respect to the material Owned Intellectual Property. The consummation of the transactions contemplated by this Agreement and the Ancillary Agreements will not result in the termination or material impairment of any of the material Owned Intellectual Property. (c) The Sellers have, or have caused to be, delivered to the Purchaser correct and complete copies of all licenses and sublicenses for Licensed Intellectual Property set forth in Section 3.18(a)(ii) of the Disclosure Schedule and any and all ancillary documents pertaining thereto (including, but not limited to, all amendments, consents and evidence of commencement 33 34 dates and expiration dates). With respect to each of such material licenses and material sublicenses: (i) any such license or sublicense, together with all ancillary documents delivered pursuant to the first sentence of this Section 3.18(c), is legal, valid, binding, enforceable and in full force and effect and represents the entire agreement between the respective licensor and licensee with respect to the subject matter of such license or sublicense; (ii) except as otherwise disclosed in Section 3.18(a)(ii) of the Disclosure Schedule, with respect to each such license or sublicense: (A) none of the Sellers or Century CP has received any notice of cancellation or termination under such license or sublicense, (B) none of the Sellers or Century CP has received any notice of a breach or default under such license or sublicense, which breach or default has not been cured, and (C) none of the Sellers or Century CP has granted to any other Person any rights, adverse or otherwise, under such license or sublicense; (iii) none of the Sellers, Century CP or (to the knowledge of the Sellers) any other party to any such license or sublicense, is in material breach or default, and, to the knowledge of the Sellers, no event has occurred that, with notice or lapse of time would constitute such a breach or default or permit termination, modification or acceleration under such license or sublicense; (iv) no Actions have been made or asserted or are pending (nor, to the knowledge of the Sellers has any such Action been threatened) against a Seller or Century CP either (A) based upon or challenging or seeking to deny or restrict the use by the Business of any of the material Licensed Intellectual Property or (B) alleging that any material Licensed Intellectual Property is being licensed, sublicensed or used in violation of any patents or trademarks, or any other rights of any Person; and (v) to the knowledge of the Sellers, no Person is using any patents, copyrights, trademarks, service marks, trade names, trade secrets or similar property that are confusingly similar to the material Licensed Intellectual Property or that infringe upon the material Licensed Intellectual Property or upon the rights of the Sellers or Century CP therein. (d) Except as disclosed in Section 3.18(d) of the Disclosure Schedule, (i) all rights of the Sellers and Century CP in each item of material Owned Intellectual Property or material Licensed Intellectual Property are transferable to the Purchaser as herein contemplated, and (ii) as a result of the transactions contemplated hereby, upon the Closing, the Purchaser shall own or possess, or own or possess adequate and enforceable licenses, sublicenses or other rights to use, without payment of any fee, all such material Owned Intellectual Property or such material Licensed Intellectual Property. 34 35 (e) The Owned Intellectual Property and the Licensed Intellectual Property constitute all the Intellectual Property used or held in the conduct of the Business. SECTION 3.19. Real Property. (a) Section 3.19(a) of the Disclosure Schedule lists: (i) the location of Owned Real Property, (ii) the current owner of such Owned Real Property, (iii) information relating to the recordation of the deed of each parcel of Owned Real Property and (iv) the current use of each such parcel of Owned Real Property. (b) Section 3.19(b) of the Disclosure Schedule lists: (i) the street address of each parcel of Leased Real Property, (ii) the identity of the lessor, lessee and current occupant (if different from lessee) of each such parcel of Leased Real Property, and (iii) the term (referencing applicable renewal periods) and rental payment terms of the leases (and any subleases) pertaining to each such parcel of Leased Real Property. (c) Except as described in Section 3.19(c) of the Disclosure Schedule, there is no material violation of any Law (including, without limitation, any building, planning or zoning Law) relating to any of the Real Property. The Sellers have made available to the Purchaser true and correct copies of the deeds for each parcel of Owned Real Property and, to the extent available, all title reports, surveys, certificates of occupancy, permits, and other documents relating to or otherwise affecting the Real Property. A Seller or Century CP, as the case may be, is in peaceful and undisturbed possession of each parcel of Real Property and there are no contractual or legal restrictions that preclude or restrict in any material respect the ability to use the premises for the purposes for which they are currently being used. All existing water, sewer, steam, gas, electricity, telephone and other utilities required for the use, occupancy, operation and maintenance of the Real Property are adequate for the conduct of the Business as it has been and currently is conducted. None of the officers or Senior Managers of the Sellers have actual knowledge of any physical condition of the Real Property which would prevent the Business from continuing to be conducted in the manner in which it is presently being conducted within existing capital and operating budgets taken as a whole. The parties recognize and agree that portions of the Real Property have been used in manufacturing operations for more than fifty years, that conditions can change suddenly and that the preceding sentence shall not constitute in any manner a representation, warranty or covenant with respect to latent defects or specific budget items. Except as set forth in Section 3.19(c) of the Disclosure Schedule, none of the Sellers or Century CP has leased or subleased any portion of the Real Property to any other Person, nor has any Seller or Century CP assigned its interest under any lease or sublease listed in Section 3.19(b) of the Disclosure Schedule to any third party. (d) The Sellers have, or have caused to be, delivered to the Purchaser correct and complete copies of all leases and subleases listed in Section 3.19(b) of the Disclosure Schedule and any and all ancillary documents pertaining thereto (including, but not limited to, all amendments, consents for alterations and documents recording variations and evidence of commencement dates and expiration dates). Except as would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect, with respect to each of such leases and subleases: 35 36 (i) such lease or sublease, together with all ancillary documents delivered pursuant to the first sentence of this Section 3.19(d), is legal, valid, binding, enforceable and in full force and effect and represents the entire agreement between the respective landlord and tenant with respect to such property; (ii) except as otherwise disclosed in Section 3.19(b) of the Disclosure Schedule, with respect to each such lease or sublease: (A) none of the Sellers or Century CP has received any notice of cancellation or termination under such lease or sublease, and (B) none of the Sellers or Century CP has received any notice of a breach or default under such lease or sublease, which breach or default has not been cured; and (iii) none of the Sellers, Century CP or (to the knowledge of the Sellers any other party to such lease or sublease, is in breach or default in any material respect, and, to the knowledge of the Sellers, no event has occurred that, with notice or lapse of time would constitute such a breach or default or permit termination, modification or acceleration under such lease or sublease. (e) There are no condemnation proceedings or eminent domain proceedings of any kind pending or, to the knowledge of the Sellers, threatened against the Real Property. (f) All the Real Property is occupied under a valid and current certificate of occupancy or similar permit and, to the knowledge of the Sellers, except for such consents that may be required from Office Lease landlords with respect to any assignment to the Purchaser of the Office Leases, there are no facts that would prevent the Real Property from being occupied after the Closing in the same manner as immediately prior to the Closing. (g) All improvements on the Real Property constructed by or on behalf of the Sellers or Century CP or, to the knowledge of the Sellers, constructed by or on behalf of any other Person were constructed in compliance with all applicable Laws (including, but not limited to, any building, planning or zoning Laws) affecting such Real Property and Leased Real Property, except for failures to comply that would not be reasonably likely to result in a Material Adverse Effect. (h) No improvements on the Real Property and none of the current uses and conditions thereof violate any applicable deed restrictions or other applicable covenants, restrictions, agreements, existing site plan approvals, zoning or subdivision regulations or urban redevelopment plans as modified by any duly issued variances, and no permits, licenses or certificates pertaining to the ownership or operation of all improvements on the Real Property, other than those which are transferable with the Real Property, are required by any Governmental Authority having jurisdiction over the Real Property, except for violations, and the absence of permits, licenses or certificates, which would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect. 36 37 (i) Except to the extent contemplated in the Shared Services Agreement, (i) all improvements on any Real Property are wholly within the lot limits of such Real Property and do not encroach on any adjoining premises or easements, and (ii) there are no encroachments on any Real Property by any improvements located on any adjoining premises, except for Permitted Encumbrances. (j) Except as otherwise set forth in Section 3.19(j) of the Disclosure Schedule, there have been no improvements of a value in excess of $100,000 in the aggregate made to or construction on any Real Property within the applicable period for the filing of mechanic's liens. (k) The rental set forth in each lease or sublease of the Leased Real Property is the actual rental being paid, and there are no separate agreements or understandings with respect to the same. (l) A Seller or Century CP, as the case may be, has, and upon the Closing the Purchaser will have, the full right to exercise any renewal options contained in the leases and subleases, if any, pertaining to the Leased Real Property on the terms and conditions contained therein and upon due exercise would be entitled to enjoy the use of each Leased Real Property for the full term of such renewal options. (m) Seller or Century CP, as the case may be, owns, leases or has the legal right to use all of the Real Property used in the conduct of the Business. A Seller or Century CP, as the case may be, has in all material respects good and marketable title to the Owned Real Property and valid and subsisting leasehold interests in the material Leased Real Property, free and clear of all Encumbrances other than Permitted Encumbrances and Permitted Property Encumbrances. SECTION 3.20. Assets. (a) Except as disclosed in Section 3.20(a) of the Disclosure Schedule, a Seller or Century CP, as the case may be, owns, leases or has the legal right to use, in all material respects, all the properties and assets (except for the Environmental Permits, the contracts (whether or not Material Contracts), the Owned Intellectual Property and the Licensed Intellectual Property, the Real Property and the licenses (whether or not Material Licenses) as to which the provisions of Sections 3.16, 3.17, 3.18, 3.19 and 3.31, respectively, shall apply) and any other tangible personal property, used in the conduct of the Business or relating to the conduct of the Business, all of which properties, assets and rights (other than the Excluded Assets) constitute the "SELECTED BUSINESS ASSETS" and, together with the Environmental Permits, the contracts (whether or not Material Contracts), the Owned Intellectual Property and the Licensed Intellectual Property, the Real Property and the licenses (whether or not Material Licenses) constitute the "BUSINESS ASSETS". A Seller or Century CP, as the case may be, has in all material respects good and marketable title to, or, in the case of leased or subleased Selected Business Assets, valid and subsisting leasehold interests in, all the Selected Business Assets, free and clear of all Encumbrances, except (i) as disclosed in Section 3.20(a) of the Disclosure Schedule; and (ii) Permitted Encumbrances. 37 38 (b) The Business Assets (taken together with the Shared Services Agreement) constitute all the properties, assets and rights used or held in, and all such properties, assets and rights as are necessary to the conduct of, the Business. None of the officers or Senior Managers of the Sellers have actual knowledge of any physical condition, facts or circumstances relating to the Business Assets which would prevent the Business from continuing to be conducted in the manner in which it is presently being conducted within existing capital and operating budgets taken as a whole. The parties recognize and agree that portions of the Real Property have been used in manufacturing operations for up to fifty years, that conditions can change suddenly and that the preceding sentence shall not constitute in any manner a representation, warranty or covenant with respect to latent defects or specific budget items. (c) Except as set forth in Section 3.20(a) or 3.20(c) of the Disclosure Schedule, the Sellers have the right to sell, assign, transfer, convey and deliver the Selected Business Assets to the Purchaser without material penalty or other material adverse consequences. Following the consummation of the transactions contemplated by this Agreement and the execution of the instruments of transfer contemplated by this Agreement, the Purchaser will own, with good, valid and marketable title, or lease, under valid and subsisting leases, or otherwise acquire the interests of the Sellers in the Selected Business Assets, free and clear of any Encumbrances, other than Permitted Encumbrances, and without incurring any material penalty or other material adverse consequence. (d) The electric motors of the hot line (including, without limitation, the rewinders) have the nominal performance specifications, specified in Section 3.20(d) of the Disclosure Schedule. SECTION 3.21. Customers. Listed in Section 3.21 of the Disclosure Schedule are the names and addresses of the ten most significant customers (by revenue) of the Business for the twelve-month period ended December 31, 1998 and the amount for which each such customer was invoiced during such period. SECTION 3.22. Employee Benefit Matters. (a) Century WV Plans and Material Documents. Section 3.22(a) of the Disclosure Schedule lists with respect to the current and former employees, directors or officers of the Rolling Business (other than any such Person who is currently a director, officer or employee of Century) (i) all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and all bonus, stock option, stock purchase, restricted stock, incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, programs or arrangements, and all employment, termination, severance or other contracts or agreements, to which any of the Sellers is a party, with respect to which any of the Sellers has any obligation or which are maintained, contributed to or sponsored by any of the Sellers, (ii) each employee benefit plan for which any of the Sellers could incur liability under Section 4069 of ERISA in the event such plan has been or were to be terminated, (iii) any plan in respect of which any of the Sellers could incur liability under Section 4212(c) of ERISA and 38 39 (iv) any contracts, arrangements or understandings between a Seller or any of its Affiliates and any employee of any of the Sellers, including, without limitation, any contracts, arrangements or understandings relating to a sale of any Seller (collectively, the "PLANS"). Each Plan is in writing and the Sellers have furnished the Purchaser with a complete and accurate copy of each Plan and a complete and accurate copy of each material document prepared in connection with each such Plan or will furnish such Plan or document prior to the Closing Date unless otherwise provided in Section 3.22(a) of the Disclosure Schedule, including, without limitation, (i) a copy of each trust or other funding arrangement, (ii) each summary plan description, (iii) the most recently filed IRS Form 5500, (iv) the most recently received IRS determination letter for each such Plan, if applicable, and (v) the most recently prepared actuarial report and financial statement in connection with each such Plan if applicable. Except as disclosed on Section 3.22(a) of the Disclosure Schedule with respect to the current and former employees, directors or officers of the Rolling Business (other than any such Person who is currently a director, officer or employee of Century), there are no other employee benefit plans, programs, arrangements or agreements, whether formal or informal, whether in writing or not, to which any of the Sellers or any Subsidiary is a party, with respect to which any of the Sellers or any Subsidiary has any obligation or which are maintained, contributed to or sponsored by any of the Sellers or any Subsidiary. With respect to the Business, none of the Sellers has any express or implied commitment (i) to create, incur liability with respect to or cause to exist any other employee benefit plan, program or arrangement, (ii) to enter into any contract or agreement to provide compensation or benefits to any individual or (iii) to modify, change or terminate any Plan, other than with respect to a modification, change or termination required by ERISA or the Code. (b) Absence of Certain Types of Plans. None of the Plans is a multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA) (a "MULTIEMPLOYER PLAN") or a single employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) for which any of the Sellers could incur liability under Section 4063 or 4064 of ERISA (a "MULTIPLE EMPLOYER PLAN"). Except as provided in Section 3.22(b) of the Disclosure Schedule, none of the Plans provides for the payment of separation, severance, termination or similar-type benefits to any Person or obligates any of the Sellers to pay separation, severance, termination or similar-type benefits solely as a result of any transaction contemplated by this Agreement or as a result of a "change in control", within the meaning of such term under Section 280G of the Code. Except as provided in Section 3.22(b) of the Disclosure Schedule, none of the Plans provides for or promises retiree medical, disability or life insurance benefits to any current or former employee, officer or director of any of Century CP or the Business. Each of the Plans is subject only to the laws of the United States or a political subdivision thereof. (c) Compliance with Applicable Law. Except as otherwise provided in Section 3.22(c) of the Disclosure Schedule, each Plan is now and always has been operated in all material respects in accordance with the requirements of all applicable Law, including, without limitation, ERISA and the Code, and all persons who participate in the operation of such Plans and all Plan "fiduciaries" (within the meaning of Section 3(21) of ERISA) have always acted in all material respects in accordance with the provisions of all applicable Law, including, without limitation, ERISA and the Code. Each of the Sellers has performed in all material respects all 39 40 obligations required to be performed by it under, is not in any material respect in default under or in violation of, and has no knowledge of any material default or violation by any party to, any Plan. No legal action, suit or claim is pending or, to Sellers' knowledge, threatened with respect to any Plan (other than claims for benefits in the ordinary course) and no fact or event exists that could give rise to any such action, suit or claim. (d) Qualification of Certain Plans. Except as otherwise provided in Section 3.22(d) of the Disclosure Schedule, each Plan which is intended to be qualified under Section 401(a) of the Code or Section 401(k) of the Code has received a favorable determination letter from the IRS after 1985 that it is so qualified and each trust established in connection with any Plan which is intended to be exempt from federal income taxation under Section 501(a) of the Code has received a determination letter from the IRS after 1985 that it is so exempt, and, to Sellers' knowledge, no material fact or event has occurred since the date of such determination letter from the IRS to adversely affect the qualified status of any such Plan or the exempt status of any such trust. (e) Absence of Certain Liabilities and Events. Except as disclosed in Section 3.22(e) of the Disclosure Schedule, none of the Sellers has incurred any liability under, arising out of or by operation of Title IV of ERISA (other than liability for premiums to the Pension Benefit Guaranty Corporation arising in the ordinary course), including, without limitation, any liability in connection with (i) the termination or reorganization of any employee benefit plan subject to Title IV of ERISA or (ii) the withdrawal from any Multiemployer Plan or Multiple Employer Plan, and no fact or event exists which is reasonably likely to give rise to any such liability. No complete or partial termination has occurred within the five years preceding the date hereof with respect to any Plan. Except with respect to the transfer of plan assets contemplated in Section 6.03, or as disclosed in Section 3.22(e) of the Disclosure Schedule, no reportable event (within the meaning of Section 4043 of ERISA) has occurred or, to the knowledge of the Sellers, is expected to occur with respect to any Plan subject to Title IV of ERISA. No Plan had an accumulated funding deficiency (within the meaning of Section 302 of ERISA or Section 412 of the Code), whether or not waived, as of the most recently ended plan year of such Plan. Except as disclosed in Section 3.22(e) of the Disclosure Schedule, none of the assets of any of the Sellers is the subject of any lien arising under Section 302(f) of ERISA or Section 412(n) of the Code; none of the Sellers has been required to post any security under Section 307 of ERISA or Section 401(a)(29) of the Code; and no fact or event exists which is reasonably likely to give rise to any such lien or requirement to post any such security. (f) Plan Contributions and Funding. All contributions, premiums or payments required to be made with respect to any Plan have been made on or before their due dates. All such contributions which have been deducted for income tax purposes have not been challenged or disallowed by any government entity. (g) WARN Act. The Sellers and the Subsidiaries are in compliance with the requirements of the Workers Adjustment and Retraining Notification Act ("WARN") and have no liabilities pursuant to WARN. 40 41 (h) Century CP Plans. Section 3.22(h) of the Disclosure Schedule lists each employee welfare benefit or employee pension benefit plan (individually, each a "CENTURY CP PLAN" and, collectively, "CENTURY CP PLANS") Century maintains or to which Century contributes or in which the Century CP employees participate. Each such Century CP Plan (and related trust, insurance contract, or fund) complies in form and in operation in all material respects with the applicable requirements of ERISA, the Code and other applicable laws. SECTION 3.23. Labor Matters. Except as detailed in Section 3.17 of the Disclosure Schedule and the book of grievances which the Sellers have furnished to the Purchaser, solely in respect of employees engaged in the Business, (a) none of the Sellers is a party to any collective bargaining agreement or other labor union contract applicable to persons employed by any of the Sellers, or in the Business and, to the knowledge of the Sellers, currently there are no organizational campaigns, petitions or other unionization activities seeking recognition of a collective bargaining unit which could affect any of the Sellers; (b) there are no strikes, slowdowns or work stoppages pending or, to the knowledge of the Sellers, threatened between any of the Sellers and any of their respective employees, and none of the Sellers has experienced any such strike, slowdown or work stoppage within the past three years; (c) none of the Sellers has breached in any material respect or otherwise failed to comply with the provisions of any collective bargaining or union contract and there are no written grievances outstanding against any of the Sellers under any such agreement or contract; (d) there are no unfair labor practice complaints pending against any of the Sellers before the National Labor Relations Board or any other Governmental Authority or any current union representation questions involving employees of any of the Sellers; (e) each of the Sellers is currently in compliance in all material respects with all applicable Laws relating to the employment of labor, including those related to wages, hours, collective bargaining and the payment and withholding of taxes and other sums as required by the appropriate Governmental Authority and has withheld and paid to the appropriate Governmental Authority or is holding for payment not yet due to such Governmental Authority all amounts required to be withheld from employees of any of the Sellers and is not liable for any arrears of wages, taxes, penalties or other sums for failure to comply with any of the foregoing; (f) each of the Sellers has paid in full to all their respective employees or adequately accrued for in accordance with U.S. GAAP consistently applied all material wages, salaries, commissions, bonuses, benefits and other compensation due to or on behalf of such employees; (g) there is no material claim with respect to payment of wages, salary or overtime pay that has been asserted or is now pending or threatened before any Governmental Authority with respect to any Persons currently or formerly employed by any of the Sellers; (h) none of the Sellers is a party to, or otherwise bound by, any consent decree with, or citation by, any Governmental Authority relating to employees or employment practices; (i) there is no charge or proceeding with respect to a violation of any occupational safety or health standards that has been asserted or is now pending or threatened with respect to any of the Sellers; and (j) there is no charge of discrimination in employment or employment practices, for any reason, including, without limitation, age, gender, race, religion or other legally protected category, which has been asserted or is now pending or threatened before the United States Equal Employment Opportunity 41 42 Commission, or any other Governmental Authority in any jurisdiction in which any of the Sellers has employed or currently employs any such Person. SECTION 3.24. Century CP Labor and Employment Matters. Except as set forth in Section 3.24 of the Disclosure Schedule, Century CP is not subject to any (i) collective bargaining or other labor agreement; or (ii) employment, retainer, or consulting agreement. The Sellers have not committed, nor have been notified in writing of any claim to have committed, any unfair labor practice with respect to Century CP. The Sellers have delivered to the Purchaser a complete and accurate list of all Century CP employees and their remuneration. Except as set forth in Section 3.24, as of the date hereof, none of the Century CP employees has given the Sellers formal notice that he/she will, or intends to, resign or seek other employment. SECTION 3.25. Employees. (a) The Sellers have delivered to the Purchaser a complete and accurate list containing the name, place of employment, the current annual salary rates, bonuses, deferred or contingent compensation (whether payable in cash or otherwise), pension, accrued vacation, "golden parachute" and other like benefits paid or payable (in cash or otherwise), the date of employment and a description of position and job function of each current employee listed on Section 6.01 of the Disclosure Schedule engaged in the Business. (b) All salaried employees of the Business are now, or will by the Closing be, under written obligation to a Seller or a Subsidiary to maintain in confidence all confidential or proprietary information acquired by them in the course of their employment and to assign to a Seller or a Subsidiary all inventions made by them in connection within the scope of their employment during such employment and for a reasonable period thereafter. SECTION 3.26. Taxes. (a) Except as set forth in Section 3.26 of the Disclosure Schedule: (i) all returns and reports in respect of Taxes required to be filed as of the date hereof with respect to each of the Sellers and each Subsidiary and the Business have been timely filed; (ii) all Taxes shown to be due on such returns and reports have been timely paid; (iii) all such returns and reports are true, correct and complete in all material respects; (iv) no adjustment relating to such returns has been proposed formally or informally by any Tax authority and, to the knowledge of the Sellers, no basis exists for any such adjustment; (v) there are no pending or, to the knowledge of the Sellers, threatened actions or proceedings for the assessment or collection of Taxes against any of the Sellers or any Subsidiary or (insofar as either relates to the activities or income of any of the Sellers or any Subsidiary or the Business or could result in liability of any of the Sellers or any Subsidiary on the basis of joint and/or several liability) any corporation that was includible in the filing of a return with any of the Sellers on a consolidated or combined basis; (vi) no consent under Section 341(f) of the Code has been filed with respect to Century CP; and (vii) there are no Tax liens on any assets of the Business. (b) Except as disclosed in Section 3.26 of the Disclosure Schedule: (i) there are no outstanding waivers or agreements extending the statute of limitations for any period with respect to any Tax to which any of the Sellers or any Subsidiary or the Business may be subject; (ii) there are no requests for information currently outstanding that could affect the Taxes of any 42 43 of the Sellers, any Subsidiary or the Business; and (iii) to the knowledge of the Sellers there are no proposed reassessments of any property owned by any of the Sellers or any Subsidiary or other proposals that could increase the amount of any Tax to which any of the Sellers, any Subsidiary or the Business would be subject. SECTION 3.27. Insurance. Section 3.27 of the Disclosure Schedule sets forth all insurance coverage of the Sellers with respect to the Business, and, to the extent available to the Sellers, details for the last three years of the Business' loss experience with respect to such coverage. SECTION 3.28. Accounts; Lockboxes; Safe Deposit Boxes; Powers of Attorney. Section 3.28 of the Disclosure Schedule is a true and complete list of (i) the names of each bank, savings and loan association, securities or commodities broker or other financial institution in which the Business (in the name of a Seller or Century CP) has an account, including cash contribution accounts, and the names of all persons authorized to draw thereon or have access thereto, (ii) the location of all lockboxes and safe deposit boxes of the Business and the names of all Persons authorized to draw thereon or have access thereto and (iii) the names of all Persons, if any, holding powers of attorney from the Sellers or Century CP relating to the Business. At the time of the Closing, none of the Sellers shall have any such account, lockbox or safe deposit box for use in respect of the Business other than those listed in Section 3.28 of the Disclosure Schedule, nor shall any additional Person have been authorized, from the date of this Agreement, to draw thereon or have access thereto or to hold any such power of attorney, without the prior written consent of the Purchaser. At the time of the Closing, all monies and accounts of the Business shall be held by, and be accessible only to, the Business. SECTION 3.29. Year 2000 Compliance. The Sellers have initiated reviews and committed resources that, to the Sellers' knowledge, are sufficient to ensure that on the Closing Date (a) all computer software necessary for the conduct of the Business designed to be used prior to, during, and after December 31, 1999 will operate in all material respects during each such time period without error relating to the year 2000, specifically including any error relating to, or being the product of, date data which represents or references different centuries or more than one century and (b) such computer software will accept, calculate, sort, extract and otherwise process date inputs and date values, and return and display date values, in a consistent manner regardless of the dates used, whether before, on, or after January 1, 2000. SECTION 3.30. Governmental Licenses and Permits. Section 3.30 of the Disclosure Schedule lists all material governmental qualifications, registrations, filings, privileges, franchises, licenses, permits, approvals or authorizations other than the Environmental Permits (collectively, the "MATERIAL LICENSES") used or held in the conduct of the Business. All of such Material Licenses are in full force and effect, and the Sellers and Century CP are in material compliance with each such Material License. SECTION 3.31. Disclosure Schedule Supplements. The facts, events or circumstances referenced in the Disclosure Schedule Supplements, taken as a whole, do not, and 43 44 will not, individually or in the aggregate, result in Losses to the Business of more than $1,000,000. SECTION 3.32. Opinion of Financial Advisor. The Sellers have received the opinion of Morgan Stanley Dean Witter, dated a date prior to the date hereof, to the effect that, as of such date, the Purchase Price is fair from a financial point of view to the Sellers. SECTION 3.33. Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission from the Business in connection with the transactions contemplated by this Agreement or the Ancillary Agreements based upon arrangements made by or on behalf of the Sellers. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER As an inducement to the Sellers to enter into this Agreement, the Purchaser hereby represents and warrants to the Sellers as follows: SECTION 4.01. Organization and Authority of the Purchaser. The Purchaser is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all necessary corporate power and authority to enter into this Agreement and the Ancillary Agreements to which it is a party, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery by the Purchaser of this Agreement and the Ancillary Agreements to which it is a party, the performance by the Purchaser of its obligations hereunder and thereunder and the consummation by the Purchaser of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of the Purchaser. This Agreement has been, and upon their execution by the Purchaser the Ancillary Agreements will be, duly executed and delivered by the Purchaser, and (assuming due authorization, execution and delivery by the Sellers) this Agreement constitutes, and upon their execution the Ancillary Agreements will constitute, legal, valid and binding obligations of the Purchaser in accordance with their respective terms. SECTION 4.02. No Conflict. Assuming compliance with the notification requirements of the HSR Act and the making and obtaining of all filings, notifications, consents, approvals, authorizations and other actions referred to in Section 4.03, except as may result from any facts or circumstances relating solely to the Sellers, the execution, delivery and performance of this Agreement and the Ancillary Agreements by the Purchaser do not and will not (a) violate, conflict with or result in the breach of any provision of the Charter or by-laws (or other organizational documents) of the Purchaser (b) materially conflict with or violate any Law or Governmental Order applicable to the Purchaser or (c) conflict with, or result in any breach of, 44 45 constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Encumbrance on any of the assets or properties of the Purchaser pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which the Purchaser is a party or by which any of such assets or properties is bound or affected, which would, individually or in the aggregate, have a material adverse effect on the ability of the Purchaser to consummate the transactions contemplated by this Agreement or by the Ancillary Agreements. SECTION 4.03. Governmental Consents and Approvals. The execution, delivery and performance of this Agreement and each Ancillary Agreement to which it is a party by the Purchaser do not and will not require any consent, approval, authorization or other order of, action by, filing with, or notification to, any Governmental Authority, except the notification requirements of the HSR Act. SECTION 4.04. Litigation. No claim, action, proceeding or investigation is pending or, to the best knowledge of the Purchaser after due inquiry, threatened, which seeks to materially delay or prevent the consummation of, or which would be reasonably likely to materially adversely affect the Purchaser's ability to consummate the transactions contemplated by this Agreement and the Ancillary Agreements. SECTION 4.05. Brokers. No Broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission from the Sellers in connection with the transactions contemplated by this Agreement or the Ancillary Agreements based upon arrangements made by or on behalf of the Purchaser. ARTICLE V ADDITIONAL AGREEMENTS SECTION 5.01. Conduct of Business Prior to the Closing. (a) The Sellers covenant and agree that, except with the prior written consent of the Purchaser (which shall not be unreasonably withheld), between the date hereof and the Closing, the Sellers shall, and shall cause Century CP to, conduct the Business only in the ordinary course and consistent with the Sellers' and Century CP's prior practice. Without limiting the generality of the foregoing, except with the prior written consent of the Purchaser and except in the ordinary course of business consistent with past practice to meet market conditions, the Sellers shall, and shall cause Century CP to, (i) continue their promotional activities, and pricing and purchasing policies, in accordance with past practice; (ii) not shorten or lengthen the customary payment cycles, or otherwise change the terms, for any payables or receivables; (iii) continue to acquire, produce and maintain Inventory (including, without limitation, the mix of Inventory) in accordance with past practice; (iv) use commercially reasonable efforts to (A) preserve intact its business 45 46 organization and the business organization of the Business, (B) keep available to the Purchaser the services of the employees of the Business, (C) continue in full force and effect without material modification all existing policies or binders of insurance currently maintained in respect of the Business and (D) preserve current relationships with customers, suppliers and other persons with which the Business has significant business relationships; (v) exercise, but only after notice to the Purchaser and receipt of the Purchaser's prior written approval (which shall not be unreasonably withheld), any rights of renewal pursuant to the terms of any of the leases or subleases set forth in Section 3.19(b) of the Disclosure Schedule which by their terms would otherwise expire; (vi) renew or apply for renewal all Material Licenses and Environmental Permits; (vii) not amend, modify or consent to the termination of any Material Contract or the Business' rights thereunder; and (viii) not engage in any practice, take any action, fail to take any action or enter into any transaction which could cause any representation or warranty of the Sellers to be untrue in any material respect or result in a material breach of any covenant made by the Sellers in this Agreement. (b) The Sellers covenant and agree, jointly and severally, that, prior to the Closing, without the prior written consent of the Purchaser (which shall not be unreasonably withheld), none of the Sellers or Century CP will do any of the things enumerated in the second sentence of Section 3.13 (including, without limitation, clauses (a) through (bb) thereof). (c) The Sellers covenant and agree that except with the prior written consent of the Purchaser, between the date hereof and the Closing, the Sellers shall not issue or sell any shares of capital stock or any option, warrant or other right to acquire the same. SECTION 5.02. Access to Information. (a) From the date hereof until the Closing, upon reasonable notice to the Sellers' officers designated below and for purposes of facilitating the transfer of the Business, the Sellers shall, and shall cause Century CP and each of the Sellers' and Century CP's officers, directors, managers, agents, accountants and counsel to (i) afford to up to two officers, employees or authorized agents or representatives of the Purchaser at any given facility at any given time for an aggregate of 12 days (i.e., 24 man days) reasonable access during normal business hours to the offices, properties, plant and other facilities of the Business (and to those officers, directors, employees, agents, accountants and counsel of the Sellers and Century CP who have knowledge relating to the Business) and (ii) furnish to such representatives of the Purchaser such additional access, data and other information regarding the Business and the Assets as the Purchaser may from time to time reasonably request. The Purchaser acknowledges that nothing in this Section 5.02 shall require the Sellers to grant access to officers, employees, agents and representatives of the Purchaser in order to permit the Purchaser to implement any expansion plans that it may contemplate in respect of the Business. The parties hereto further agree that with respect to this Section 5.02 (i) all requests by the Purchaser for access or information will be submitted or directed only to Century's President and Chief Operating Officer (in respect of manufacturing and technical matters), Chief Financial Officer (in respect of financial and accounting matters and management information and control systems) and General Counsel and Chief Administrative Officer (in respect of contractual, environmental, human resource and any other matters); (ii) that the Purchaser shall not interfere 46 47 with any of the businesses or operations of the Sellers or Century CP; and (iii) that nothing in this Section 5.02 shall restrict the Purchaser's access to the offices, properties, plant and other facilities of the Business (and to those officers, directors, employees, agents, accountants and counsel of the Sellers and Century CP who have knowledge relating to the Business) or financial, operating, technical and environmental data and other information regarding the Business and the Assets to the extent reasonably required or contemplated under the Shared Services Agreement and the Molten Aluminum Purchase Agreement. (b) In order to facilitate the resolution of any claims made against or incurred by the Sellers prior to the Closing, for a period of seven years after the Closing, the Purchaser shall (i) retain the books and records of the Business which are transferred to the Purchaser pursuant to this Agreement relating to periods prior to the Closing in a manner reasonably consistent with the prior practices of the Sellers and (ii) upon reasonable notice, afford the officers, employees and authorized agents and representatives of the Sellers reasonable access (including the right to make, at the Sellers' expense, photocopies), during normal business hours, to such books and records. (c) In order to facilitate the resolution of any claims made by or against or incurred by the Purchaser after the Closing, for a period of seven years following the Closing, the Sellers shall (i) retain all books and records of the Sellers which are not transferred to the Purchaser pursuant to this Agreement and which relate to the Business for periods prior to the Closing and which shall not otherwise have been delivered to the Purchaser and (ii) upon reasonable notice, afford the officers, employees and authorized agents and representatives of the Purchaser, reasonable access (including the right to make photocopies at the expense of the Purchaser), during normal business hours, to such books and records. SECTION 5.03. Confidentiality. (a) For a period of two years from the Closing Date, the Sellers agree to, and shall cause their agents, representatives, Affiliates, Senior Managers, officers and directors to, and shall use commercially reasonable efforts to cause their other employees to: (i) treat and hold as confidential (and not disclose or provide access to any Person to) all information relating to trade secrets, processes, patent or trademark applications, product development, price, customer and supplier lists, pricing and marketing plans, policies and strategies, operations methods, product development techniques, business acquisition plans, new personnel acquisition plans and any other confidential information with respect to the Business, (ii) in the event that the Sellers or any such agent, representative, Affiliate, Senior Manager or employee, officer or director becomes legally compelled to disclose any such information, to the extent legally possible provide the Purchaser with prompt written notice of such requirement so that the Purchaser may seek a protective order or other remedy or waive compliance with this Section 5.03(a), (iii) in the event that such protective order or other remedy is not obtained, or the Purchaser waives compliance with this Section 5.03(a), furnish only that portion of such confidential information which is legally required to be provided and exercise commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such information, and (iv) promptly furnish (prior to, at, or as soon as practicable following, the Closing) to the Purchaser any and all copies (in whatever form or medium) of all such 47 48 confidential information then in the possession of the Sellers or any of their agents, representatives, Affiliates, Senior Managers or employees, officers and directors and destroy any and all additional copies then in the possession of the Sellers or any of their agents, representatives, Affiliates, Senior Managers or employees, officers and directors of such information and the portion of any analyses, compilations, studies or other documents prepared on the basis thereof; provided, however, that clauses (i), (ii) and (iii) of this sentence shall not apply to any information that, at the time of disclosure, is available publicly and was not disclosed in breach of this Agreement by the Sellers, their agents, representatives, Affiliates, Senior Managers or employees, officers or directors. The Sellers agree and acknowledge that remedies at Law for any breach of their obligations under this Section 5.03(a) are inadequate and that in addition thereto the Purchaser shall be entitled to seek equitable relief, including injunction and specific performance, in the event of any such breach, without the necessity of demonstrating the inadequacy of monetary damages. (b) For a period of two years from the Closing Date, the Purchaser agrees to, and shall cause its agents, representatives, Affiliates, senior managers, officers and directors to, and shall use commercially reasonable efforts to cause their other employees to: (i) treat and hold as confidential (and not disclose or provide access to any Person to) all information obtained in connection with transactions contemplated by this Agreement and the Ancillary Agreements relating to trade secrets, processes, patent or trademark applications, product development, price, customer and supplier lists, pricing and marketing plans, policies and strategies, operations methods, product development techniques, business acquisition plans, new personnel acquisition plans and any other confidential information with respect to the business of the Sellers (other than the Business), (ii) in the event that the Purchaser or any such agent, representative, Affiliate, senior manager or employee, officer or director becomes legally compelled to disclose any such information, to the extent legally possible provide the Sellers with prompt written notice of such requirement so that the Sellers may seek a protective order or other remedy or waive compliance with this Section 5.03(b), (iii) in the event that such protective order or other remedy is not obtained, or the Sellers waive compliance with this Section 5.03(b), furnish only that portion of such confidential information which is legally required to be provided and exercise commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such information, and (iv) promptly furnish (prior to, at, or as soon as practicable following, the Closing) to the Sellers any and all copies (in whatever form or medium) of all such confidential information then in the possession of the Purchaser or any of its agents, representatives, Affiliates, senior managers or employees, officers and directors and destroy any and all additional copies then in the possession of the Purchaser or any of its agents, representatives, Affiliates, senior managers or employees, officers and directors of such information and the portion of any analyses, compilations, studies or other documents prepared on the basis thereof; provided, however, that clauses (i), (ii) and (iii) of this sentence shall not apply to any information that, at the time of disclosure, is available publicly and was not disclosed in breach of this Agreement by the Purchaser, its agents, representatives, Affiliates, senior managers or employees, officers or directors. The Purchaser agrees and acknowledges that remedies at Law for any breach of its obligations under this Section 5.03(b) are inadequate and that in addition thereto the Sellers shall be entitled to seek equitable relief, including injunction 48 49 and specific performance, in the event of any such breach, without the necessity of demonstrating the inadequacy of monetary damages. SECTION 5.04. Regulatory and Other Authorizations; Notices and Consents. (a) Each of the Sellers and the Purchaser will use commercially reasonable efforts to obtain (or in the case of the Sellers cause Century CP to obtain) all authorizations, consents, orders and approvals of all Governmental Authorities and officials that may be or become necessary for their execution and delivery of, and the performance of their obligations pursuant to, this Agreement and the Ancillary Agreements and will cooperate fully with such other parties in promptly seeking to obtain all such authorizations, consents, orders and approvals, it being understood that (i) nothing in this Section 5.04(a) is intended to be a covenant that the Sellers shall in fact obtain on the Purchaser's behalf any such authorizations, consents, orders or approvals, or (ii) except as provided in Section 8.02, obtaining any such authorizations, consents, orders and approvals shall not be a condition to Closing. Each party hereto agrees to make an appropriate filing, if necessary, pursuant to the HSR Act with respect to the transactions contemplated by this Agreement within fifteen Business Days of the date hereof and to supply as promptly as practicable to the appropriate Governmental Authorities any additional information and documentary material that may be requested pursuant to the HSR Act. Each party to this Agreement shall promptly notify the other parties of any communication it or any of its Affiliates receives from any Governmental Authority relating to the matters that are the subject of this Agreement and permit the other parties to review in advance any proposed communication by such party to any Governmental Authority. (b) The Sellers shall, or shall cause Century CP to, give promptly such notices to third parties and use commercially reasonable efforts to obtain such third party consents as the Purchaser may reasonably deem necessary or desirable in connection with the transactions contemplated by this Agreement, including, without limitation, all third party consents that are necessary or desirable in connection with the transfer of the Material Contracts, it being understood that (i) nothing in this Section 5.04(b) is intended to be a covenant that the Sellers shall in fact obtain on the Purchaser's behalf any such consents or (ii), except as provided in Section 8.02(l), obtaining any such consents shall not be a condition to Closing. (c) The Purchaser shall cooperate and use commercially reasonable efforts to assist the Sellers in giving such notices and obtaining such consents; provided, however, that the Purchaser shall have no obligation to give any guarantee or other consideration of any nature in connection with any such notice or consent or to consent to any change in the terms of any Material Contract which the Purchaser may deem adverse to the interests of the Purchaser or the Business. (d) The Sellers and the Purchaser agree that, in the event any consent, approval or authorization necessary or desirable to preserve for the Business or the Purchaser any right or benefit under any lease, license, contract, commitment or other agreement or arrangement to which the Sellers or Century CP is a party and which is to be transferred to the Purchaser pursuant to Section 2.01(a) is not obtained prior to the Closing, the Sellers will, 49 50 subsequent to the Closing, cooperate with the Purchaser in attempting to obtain such consent, approval or authorization as promptly thereafter as practicable. If such consent, approval or authorization cannot be obtained, the Sellers will use commercially reasonable efforts to provide the Purchaser on a back-to-back or similar basis with the rights and benefits of the affected lease, license, contract, commitment or other agreement or arrangement for the term of such lease, license, contract or other agreement or arrangement, and, if the Sellers provide such rights and benefits, the Purchaser shall assume the obligations and burdens thereunder. SECTION 5.05. Disclosure Schedule Supplements; Notice of Developments. (a) The Purchaser and the Sellers agree that the Sections of the Disclosure Schedule qualifying Article III are not final and are subject to further review and revision. The Sellers may supplement such Sections of the Disclosure Schedule qualifying Article III by including, to the extent appropriate, a description (in reasonable detail) of facts, events or circumstances affecting the Business and existing prior to the date hereof and delivering to the Purchaser within 20 days of the date hereof supplemental sections of the Disclosure Schedule qualifying Article III (each, "DISCLOSURE SCHEDULE SUPPLEMENT"); provided that nothing in this Section 5.05(a) will permit the Sellers to include in the Disclosure Schedule Supplements any references to any facts, events or circumstances which, taken as a whole, individually or in the aggregate, (i) reflect Liabilities of the Business greater than $1,000,000, (ii) result in, or may be reasonably likely to result in, Losses to the Business of more than $1,000,000 or (iii) would materially and adversely affect the Purchaser's ability to conduct the Business on the Closing Date. (b) Prior to the Closing, the Sellers shall promptly notify the Purchaser in writing of (i) all events, circumstances, facts and occurrences arising subsequent to the date of this Agreement which result in any material breach of a representation or warranty or covenant of the Sellers in this Agreement or which have the effect of making any representation or warranty of the Sellers in this Agreement untrue or incorrect in any material respect and (ii) all other developments materially affecting the Business or the Business Assets. SECTION 5.06. Use of Intellectual Property. (a) Except as determined by the committee to be established pursuant to the Shared Services Agreement in respect of the Shared Intellectual Property or as set forth in Section 5.06 of the Disclosure Schedule, from and after the Closing, none of the Sellers or the Subsidiaries (other than Century CP) shall use any of the Owned Intellectual Property or the Licensed Intellectual Property. SECTION 5.07. Non-Competition. (a) In partial consideration of the payment of the Purchase Price, as set forth in Section 2.04, the Sellers and the Purchaser agree that, for a period of five (5) years after the Closing (the "RESTRICTED PERIOD"), none of the Sellers or the Subsidiaries (other than Century CP) shall acquire, directly or indirectly, any ownership, equity, or similar interest (whether through a stock, asset or other type of transaction) in any multipurpose aluminum rolling mill in North America having a production capacity of at least 500,000,000 pounds per year that manufactures, produces or supplies heat-treated aluminum products or brazing products ("COVERED PRODUCTS"), provided that nothing herein shall restrict the Sellers from acquiring an interest in a Person that manufactures, produces or supplies 50 51 Covered Products if such activities did not represent or account for more than 20% of such Person's revenues, assets or income during, or as of the end of, any of the three fiscal years preceding the proposed date of acquisition. (b) As a separate and independent covenant, the Sellers agree with the Purchaser that, for a period of five (5) years following the Closing, none of the Sellers or the Subsidiaries (other than Century CP) will in any way, directly or indirectly, interfere or attempt to interfere with any contractual relationship in North America of the Business with any customer or supplier relationship in existence on the date hereof. (c) The Restricted Period shall be extended by the length of any period during which the Sellers are in breach of the terms of this Section 5.07. (d) The Sellers acknowledge that the covenants of the Sellers set forth in this Section 5.07 are an essential element of this Agreement and that, but for the agreement of the Sellers to comply with these covenants, the Purchaser would not have entered into this Agreement. The Sellers acknowledge that this Section 5.07 constitutes an independent covenant and shall not be affected by performance or nonperformance of any other provision of this Agreement by the Purchaser. The Sellers has independently consulted with its counsel and after such consultation agrees that the covenants set forth in this Section 5.07 are reasonable and proper. SECTION 5.08. Bulk Transfer Laws. Without prejudice to Section 9.02(a)(vi), the Purchaser hereby waives compliance by the Sellers with any applicable bulk sale or bulk transfer laws of any jurisdiction in connection with the sale of the Assets to the Purchaser. SECTION 5.09. Cash; Other Communications. From and after the Closing, (a) the Sellers shall use commercially reasonable efforts to take, or cause to be taken, all appropriate action, and do or cause to be done all things necessary, proper or advisable under the applicable Laws to put the Purchaser in effective possession, ownership and control of the Business Assets and the Purchaser shall cooperate with the Sellers for that purpose and (b) the Purchaser shall use commercially reasonable efforts to take, or cause to be taken, all appropriate action, and do or cause to be done all things necessary, proper or advisable under applicable Laws to put the Sellers in effective possession, ownership and control of assets not included within the Business Assets and the Sellers shall cooperate with the Purchaser for that purpose. Subject to the terms of the Shared Services Agreement, all cash and other remittances, mail and other communications relating to the Business Assets or the Business received by the Sellers or their Affiliates shall be promptly turned over to the Purchaser by the Sellers and, until sent to the Purchaser, shall be deemed held in trust by the Sellers for the benefit of the Purchaser. Subject to the terms of the Shared Services Agreement, all cash and other remittances, mail and other communications relating to any business of the Sellers not included within the Business being purchased by the Purchaser hereunder that are received by the Purchaser shall be promptly turned over to the Sellers by the Purchaser and, until sent to the Sellers, shall be deemed held in trust by the Purchaser for the benefit of the Sellers. 51 52 SECTION 5.10. Further Action. (a) Each of the parties hereto shall use commercially reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary, proper or advisable under applicable Laws, and execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and the Ancillary Agreements and consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements, including, without limitation, fulfill, or cause to be fulfilled, the conditions set forth in Article VIII. (b) The Purchaser agrees with the Sellers that, for a period of two (2) years following the Closing Date, none of the Purchaser or its Affiliates on the one hand, or the Sellers or their respective Affiliates on the other hand, will, in any way, directly or indirectly, solicit, offer to hire or induce (except through advertisements to the general public for positions) any person who is an employee of the other, to accept employment by it or enter into a business relationship with it. SECTION 5.11. Environmental Permits. The Sellers will assist the Purchaser in the transfer or the reissue of such Environmental Permits or in any arrangement for their continued use by the Purchaser, including assisting in filing applications for any new Environmental Permits, it being understood that (a) nothing in this Section 5.11 is intended to be a covenant that the Sellers shall in fact obtain on the Purchaser's behalf any such Environmental Permits, or (b) except as provided in Section 8.02, obtaining any such Environmental Permits shall not be a condition to Closing SECTION 5.12. Intellectual Property. The Sellers agree to provide to the Purchaser within 15 Business Days of the date hereof a list of all Owned Intellectual Property and all Licensed Intellectual Property that is currently used by Century WV in its operations other than the Business (collectively, the "SHARED INTELLECTUAL PROPERTY"), provided that the parties agree that the Shared Intellectual Property shall not include any Owned Intellectual Property or Licensed Intellectual Property that is material to the Business or used in the manufacturing activities of the Business. The parties agree to refer to the committee to be established pursuant to the Shared Services Agreement matters relating to the Shared Intellectual Property and that the Shared Intellectual Property shall thereafter be deemed a "Shared Service" under such agreement. ARTICLE VI EMPLOYEE MATTERS SECTION 6.01. Offer of Employment. No later than 10 days prior to the Closing Date, the Purchaser shall offer employment to each of the hourly and salaried employees listed on a schedule previously provided to the Purchaser who remains actively employed by the Sellers as of the Closing Date in the Rolling Business (excluding individuals on short or long 52 53 term disability or leave of absence or layoff). Each such employee who accepts such offer of employment by the Purchaser, and each employee hired after the date hereof by the Sellers to work in the Rolling Business and who accepts an offer of employment by the Purchaser on or prior to the Closing Date shall hereinafter be referred to as a "TRANSFERRED EMPLOYEE". SECTION 6.02. Collective Bargaining Agreements. As of the Closing Date, the Purchaser agrees to assume any existing collective bargaining agreements sponsored by the Sellers and listed on Section 3.23 of the Disclosure Schedule. SECTION 6.03. Defined Benefit Pension Plans. (a) Effective as of the Closing Date, the Transferred Employees shall no longer participate in the Sellers' defined benefit pension plans. Effective as of such date, the Purchaser shall establish replacement defined benefit pension plans (the "NEW DEFINED BENEFIT PLANS") that are intended to be qualified under Section 401(a) of the Code, and a related trust or trusts that are intended to be exempt from taxation under Section 501(a) of the Code for the benefit of the Transferred Employees, the terms of which plans and trust(s) shall be substantially comparable to the terms of the Sellers' defined benefit pension plans (and in compliance with any applicable collective bargaining agreement). The Purchaser agrees that the new Defined Benefit Plans and their related trusts and funding arrangements shall be operative in all respects on the Closing Date and the Purchaser agrees to deliver to the Seller the certificate of an officer or an opinion of counsel representing that the New Defined Benefit Plans meet the requirements for qualification under Section 401(a) of the Code. The Purchaser agrees as soon as practicable after the Closing Date to apply for, and take all actions necessary to secure, a determination letter from the Internal Revenue Service to the effect that the New Defined Benefit Plans are qualified under the applicable provisions of the Code. The Purchaser further agrees that if such a determination letter is not obtained, any liability resulting from the failure to obtain such letter shall be the responsibility of the Purchaser. The Purchaser shall recognize the Transferred Employees' service prior to the Closing Date with the Sellers for all purposes under the New Defined Benefit Plans. (b) As soon as practicable after the Closing Date, the Sellers shall cause to be transferred from the Sellers' defined benefit pension plans (the "SELLERS' PENSION PLANS") to the New Defined Benefit Plans all accrued benefits and other liabilities of the Sellers' Pension Plans relating to the Transferred Employees and to the employees of the Rolling Business whose employment terminated prior to the Closing Date ("FORMER EMPLOYEES") in the manner described below (the "TRANSFERRED BENEFITS"). Following completion of the transfer of assets and liabilities from the Sellers' Pension Plans to the New Defined Benefit Plans, the Sellers shall have no further liability whatsoever with respect to the Former Employees and the Transferred Employees for benefits under the Sellers' Pension Plans, other than liability for any breach of fiduciary duties or any nonexempt prohibited transaction occurring prior to such transfer. As of the Closing Date, the Sellers shall cause the Sellers' Pension Plans to be amended so as to cease further accrual of benefits with respect to the Former Employees and Transferred Employees. Section 6.03(b) of the Disclosure Schedule lists all Former Employees together with relevant data concerning their age, date of hire, date of termination and accrued pension benefits. 53 54 (c) As a condition of making the transfer of assets and liabilities described below in this section, the Sellers and the Purchaser shall be entitled to receive the following: (i) in the case of the Sellers, a certificate from an officer or an opinion of counsel of the Purchaser representing that the New Defined Benefit Plans meet the requirements for qualification under Section 401(a) of the Code and that the Purchaser has timely requested a determination letter from the Internal Revenue Service confirming such qualification; (ii) in the case of the Purchaser, a certificate from an officer or an opinion of counsel of the Sellers representing that the Sellers' Plans have received a recent favorable determination from the Internal Revenue Service to the effect that the Sellers' Plans meet such requirements for qualification; and (iii) to Sellers' knowledge, there have been no amendments or actions since the issuance of such favorable determination letter which adversely affect such plans' qualifications. (d) The Sellers shall cause Deloitte & Touche (the "SELLERS' ACTUARY") to determine the amount of assets required by Section 414(l) of the Code for the Transferred Benefits obligation based on allocating assets by priority categories described in Section 4044(a) of ERISA (the "414(l) AMOUNT"), to be transferred from the Sellers' Plans to the New Defined Benefit Plans. The 414(l) Amount shall be determined as of the Closing Date by the Sellers' Actuary on the basis of the Pension Benefit Guaranty Corporation's safe harbor plan termination assumptions set forth in Section 4044 of ERISA and the remaining assumptions used in the most recent ERISA actuarial valuation of the Sellers' Plans (the "SAFE HARBOR ASSUMPTIONS"). In connection therewith, the Sellers shall cause the Sellers' Actuary to determine the amounts of charges and credits to the funding standard account under Section 412 of the Code, the funding standard account credit balance and the annual amortization charges and credits (such amounts determined under the provisions of Internal Revenue Service Revenue Ruling 81-212 and other applicable guidance) to be allocated between the Sellers' Plans and the New Defined Benefit Plans as a result of the transfer of assets and liabilities anticipated under this section. Such amounts shall be determined without regard to use of the de minimis option contained in such revenue ruling and the regulations promulgated under Section 414(l) of the Code. The actuarial calculation of the liabilities by Pension Benefit Guaranty Corporation priority categories underlying the 414(l) Amount determined by the Sellers' Actuary shall be reviewed and verified by an actuarial firm designated by the Purchaser (the "PURCHASER'S ACTUARY"). (e) As soon as practicable after the Closing Date, but in no event later than 30 days from the Closing Date, the Sellers shall prepare and file Form 5310A with respect to the transfer required by this section, and within 60 days of the Closing Date, the Sellers shall cause to be transferred from the trusts for the Sellers' Plans to the trusts established for the New Pension Plans an amount in cash and marketable securities acceptable to the parties equal to 80% of the amount reasonably estimated by the Sellers' Actuary in good faith, after verification and approval by the Purchaser's Actuary, to be equal to the 414(l) Amount; provided, however, that such estimated amount shall be calculated prior to the last day of the month subsequent to the execution of this Agreement (the "INITIAL TRANSFER AMOUNT"). As soon as practicable after the final determination of the 414(l) Amount, calculated as of the Closing Date (the "TRUE-UP DATE"), but in no event later than 6 months from the Closing Date, the Sellers shall cause a second transfer to be made to the New Pension Plans in cash and marketable securities acceptable to the parties, of the "TRUE-UP AMOUNT". The True-Up Amount shall be equal to the 54 55 414(l) Amount (A) minus the sum of (i) the Initial Transfer Amount and (ii) distributions, if any, made with respect to Transferred Employees and Former Employees from the Closing Date through the True-Up Date, and (B) plus earnings in the Money Market Vehicle described in (g) below. Such True-Up Amount shall be determined by the Sellers' Actuary, after verification and approval by the Purchaser's Actuary. Once the Sellers' Actuary and the Purchaser's Actuary shall reach agreement, the Sellers' Actuary shall verify that the completed transfers comply with the requirements of Section 414(l). Nothing in this Section 6.03(e) shall prevent the Sellers from filing the Form 5310A in their discretion prior to the Closing Date. (f) The Sellers' Actuary shall provide the Purchaser's Actuary with the results of the calculations made under paragraphs (d) and (e) above and with records and other information in support of such calculations as required by the Purchaser's Actuary to verify and approve such calculations. The Sellers and the Purchaser will cause their respective actuaries to work together in good faith to promptly resolve any differences between them with respect to such calculations. The expenses of the Sellers' Actuary shall be borne by the Sellers, and the expenses of the Purchaser's Actuary shall be borne by the Purchaser. In the event such differences cannot be resolved, the two actuaries shall appoint a third actuary to resolve such differences, and the cost of such third actuary shall be equally borne by the Sellers and the Purchaser. The decision of such third actuary shall be final and binding on the Sellers and the Purchaser. (g) Notwithstanding any provisions to the contrary in this Section 6.03, it is the intention of the parties that the Sellers shall attempt to minimize the market risk from the Closing Date to the date the True Up Amount is transferred (the "MARKET RISK PERIOD") by placing 125% of the Initial Transfer Amount into a money market account or other fixed income investment vehicle offered by the Sellers' Trustee on the Closing Date (the "MONEY MARKET VEHICLE"), and it is agreed that the return on such investment during the Market Risk Period shall be paid to the Purchaser's New Defined Benefit Plans at the time of transfer of the True Up Amount. The Initial Transfer Amount and any distributions made with respect to Transferred Employees and Former Employees during the Market Risk Period shall be paid from the Money Market Vehicle. Promptly after the date hereof the Sellers and the Purchaser shall contact the PBGC and seek to have the PBGC terminate the PBGC Agreement and release the PBGC lien on the Ravenswood Owned Real Property. If the PBGC does not terminate the PBGC Agreement prior to the Closing or does not agree to postpone until after the Closing the quarterly installment contributions to the Sellers' Pension Plans described in Section 2(c)(ii) of the PBGC Agreement, and the Sellers are required to make any such quarterly installment contribution before the Closing, the Purchase Price shall be increased by the after-tax effective cost to the Sellers of such contribution, multiplied by 78%, representing the agreed upon share of such contribution attributable to the Transferred Benefits, plus interest at 6% from the date of such contribution to the Closing Date. SECTION 6.04. Welfare Benefit Plans. The Sellers shall be responsible for providing COBRA benefits to all employees of the Rolling Business whose employment terminated on or before the Closing Date, and for providing COBRA notices to all Transferred 55 56 Employees, as required by applicable law. Effective as of the Closing Date, the Purchaser shall be responsible for all employee welfare plan benefits or payments for Transferred Employees whether accruing before or after the Closing Date. Except as provided in Section 6.05 on and after the Closing Date, the Purchaser shall provide to the Transferred Employees such welfare benefit plans, which are substantially comparable to those enjoyed by such Transferred Employees immediately prior to the Closing Date which comply with applicable collective bargaining agreements; provided, however, that nothing contained in this Section 6.04 shall obligate or commit the Purchaser to continue any welfare benefit plan, program or arrangement after the Closing Date for any particular length of time, or to limit the right of the Purchaser to amend, modify, suspend, revoke or terminate any such plan, subject, however, to the provisions of any applicable collective bargaining agreement. SECTION 6.05. Retiree Medical and Life Insurance Plans. On and after the Closing Date, the Purchaser shall assume all retiree medical and life insurance obligations of the Sellers for Transferred Employees and former employees of the Rolling Business who are identified in Section 6.05 of the Disclosure Schedule but only to the extent that such obligations relate to claims that are accrued on the Closing Balance Sheet, and the Purchaser shall provide to the Transferred Employees retiree medical and life insurance benefits substantially comparable to those enjoyed by such employees immediately prior to the Closing Date and in accordance with any applicable collective bargaining agreement; provided, however, that nothing contained in this Section 6.05 shall limit the right of the Purchaser to amend, modify, suspend, revoke or terminate any such obligations or benefits, it being understood that the Sellers shall not be liable to such former employees or Transferred Employees solely by reason of the Purchaser's amendment, modification, suspension, revocation or termination of obligations or benefits. SECTION 6.06. Workers' Compensation Claims. Effective as of the Closing Date, the Sellers agree to assign all workers' compensation insurance policies relating to employees of the Business to the Purchaser. The Purchaser agrees to assume all workers' compensation claims brought by employees or former employees of the Rolling Business, including by Transferred Employees, whether such claims accrue or are brought before or after the Closing Date, and the Sellers shall have no further liability therefor on or after the Closing Date. SECTION 6.07. PBGC Agreement. (a) The Sellers and the Purchaser agree that each Party will be entitled to participate in discussions with the PBGC and will use commercially reasonable efforts to obtain, on or prior to the Closing Date, the release of the Collateral described in the Agreement made as of January 23, 1996, between Century, the PBGC and certain other parties (the "PBGC AGREEMENT") which is related to the Rolling Business, such that the PBGC no longer has a security interest in any Assets purchased hereunder, provided, however, that the Sellers do not guaranty the release of such security interest nor shall a release of such security interest be a condition to Closing. (b) Each of the Sellers and the Purchaser, respectively, agrees to comply with any requirements set forth by the PBGC, including without limitation payments, guarantees or 56 57 the provision of other security to the extent, in the case of the Sellers, such requirements apply to the Reduction Facility and in the case of the Purchaser to the Rolling Business. (c) The Purchaser and the Sellers agree to cooperate with each other in attempting to effect the release of the Collateral described in (a) above, including the disclosure of information relating to the Purchaser and the Sellers and their Affiliates that may be requested by the PBGC in connection with the PBGC's review of the transaction contemplated thereby. SECTION 6.08. Management Services Agreement. The Sellers agree that prior to the Closing Date, Century shall have entered into the Management Services Agreement, under which Century agrees to provide the services of certain key executives of Century on a limited basis to the Purchaser for a fee after the Closing Date. Such services and the times the services shall be provided are specified in such agreement. SECTION 6.09. Incentive Plans. The Sellers shall be responsible for all payments to any Transferred Employees under any incentive, bonus, stock option, stock purchase or similar plans of the Sellers, and for the payment of any benefits under such plans, which are accelerated, or become payable, as a result of the Closing, and the Purchaser shall have no responsibility for any such payments. The Purchaser shall have no responsibility to continue any such plans after the Closing or to make any payments under such plans. SECTION 6.10. Employment Agreements. The Purchaser agrees to assume the Employment Agreements disclosed in Section 3.22(a) of the Disclosure Schedule, to the extent the same are in effect on the Closing Date with respect to the Transferred Employees. SECTION 6.11. 401(k) Plan. Effective as of the Closing Date, Transferred Employees shall no longer actively participate in the Ravenswood Aluminum Corp. United Steelworkers of America Savings Plan or the Ravenswood Aluminum Corp. Salaried Employees Defined Contribution Plan (together, the "SELLERS' DEFINED CONTRIBUTION PLANS"). Effective as of the Closing Date, the Purchaser shall establish or make available one or more defined contribution plans for Transferred Employees containing terms substantially identical (other than employer stock terms) to those of the Sellers' Defined Contribution Plans (the "PURCHASER'S DEFINED CONTRIBUTION PLANS") and in compliance with applicable collective bargaining agreements and shall credit Transferred Employees for their service with the Sellers for participation and vesting purposes under the Purchaser's Defined Contribution Plans. As soon as practicable following the Closing Date, and upon receipt by the Sellers and by the Purchaser of the officer's certificates or opinions of counsel referred to below, the Sellers shall cause to be transferred from the Sellers' Defined Contribution Plans to the Purchaser's Defined Contribution Plans, and the Purchaser shall cause to be received, assets equal to the finalized account balances of such Transferred Employees who participated in the Sellers' Defined Contribution Plans. Effective as of the Closing Date, the Sellers shall cause each Transferred Employee to be fully vested in his or her account balance. The Sellers shall insure that such Transferred Employees do not receive in service distributions from the Sellers' Defined Contribution Plans in advance of such transfer. As a condition to such transfer, the Sellers and the Purchaser shall each be entitled 57 58 to receive from the other an officer's certificate or an opinion of counsel to the effect that the Sellers' Defined Contribution Plans, and the Purchaser's Defined Contribution Plans, as the case may be, either (a) have received a recent favorable determination letter as to their qualification under the Code, and nothing has occurred since the date of such letter which would cause the loss of such qualification or (b) substantially complies by its terms with the relevant qualification provisions of the Internal Revenue Code, and the plan sponsor has timely applied for a favorable determination letter with respect to the plans, and will make whatever changes to the plans as are requested by the Internal Revenue Service as a condition of qualification. SECTION 6.12. Century CP Plans. The Purchaser shall assume all the rights and obligations of Century under the Acquisition Agreement made as of December 22, 1998 between Alcoa and Century (the "ALCOA AGREEMENT") with respect to Employee Matters described in Section 9.09 of the Alcoa Agreement. SECTION 6.13. Century CP Pension Plan. (a) Effective as of the Closing Date, the employees employed by Century CP (the "VERNON EMPLOYEES") shall no longer participate in the relevant Alcoa defined benefit pension plans (the "ALCOA PLANS"). Effective as of such date, the Purchaser shall establish replacement defined benefit pension plans (the "NEW VERNON PLANS") in compliance with applicable collective bargaining agreements that are intended to be qualified under Section 401(a) of the Code, and related trusts that are intended to be exempt from taxation under Section 501(a) of the Code for the benefit of the Vernon Employees, the terms of which plans and trusts shall be substantially comparable to the terms of the Alcoa Plans. The Purchaser agrees as soon as practicable after the Closing Date to apply for, and take all actions necessary to secure, determination letters from the Internal Revenue Service to the effect that the New Vernon Plans are qualified under applicable provisions of the Code. Assuming assets are transferred as provided in (b) below, the Purchaser shall recognize the Vernon Employees' service prior to the Closing Date with Alcoa and with the Sellers for all purposes under the New Vernon Plans. (b) The Sellers agree, to the extent provided by the terms of the Alcoa Agreement, to cause Alcoa to transfer assets on a timely basis from the Alcoa Plans to the New Vernon Plans in accordance with the provisions of Section 9.09(c)(3) of the Alcoa Agreement. SECTION 6.14. Century CP Annual Performance Pay Plan. The Sellers agree that the Closing Balance Sheet will show, as a liability of the Business, amounts earned on a pro rata basis by the Vernon Employees who participate in the Performance Pay Plan pursuant to the collective bargaining agreement dated May 16, 1997 between UAW Local No. 808 and Century CP and the Purchaser shall pay such amounts to such employees in accordance with the collective bargaining agreements of Century CP following the delivery of the Closing Balance Sheet. ARTICLE VII 58 59 TAX MATTERS SECTION 7.01. Indemnity. (a) Each of Century and Century WV agree, on a joint and several basis, to indemnify and hold the Purchaser, Century CP and their Affiliates harmless from and against any and all of the following Taxes (other than payroll and other employment taxes to the extent accrued on the Closing Balance Sheet), including reasonable attorneys' and accountants' fees and other reasonable out-of-pocket expenses incurred in connection therewith: (i) Taxes imposed on or payable by Century CP or in respect of the Rolling Assets with respect to taxable periods ending on or before the Closing Date; (ii) with respect to taxable periods beginning before the Closing Date and ending after the Closing Date, Taxes imposed on Century CP or in respect of the Rolling Assets which are allocable, pursuant to Section 7.01(b) hereof, to the portion of such period ending on the Closing Date; (iii) Taxes imposed on any member of an affiliated, consolidated, unitary or other combined group with which Century CP files or has filed a Tax return in a period ending on or prior to the Closing Date on a consolidated, unitary or other combined basis or with which one or more of the Sellers file a Tax return on such basis after the Closing Date; (iv) Taxes imposed on or payable by Century CP as a result of (A) the Code section 338(h)(10) Election with respect to Century CP referred to in Section 7.07 and (B) an actual or deemed election under a state or local provision which is analogous or comparable to Code Section 338(h)(10); (v) Taxes relating to any payments required to be made after the Closing Date under any Tax indemnity, Tax sharing, or Tax allocation agreement between the Sellers and Century CP under which Century CP was obligated, or was a party, on or prior to the Closing Date; and (vi) Taxes arising from the breach of any representation, warranty or covenant of the Sellers with respect to Taxes under this Agreement. For purposes of this Section 7.01(a), the Sellers agree, on a joint and several basis, to indemnify the Purchaser for any and all out-of-pocket costs and expenses (including reasonable fees for attorneys and other outside consultants) incurred in connection with any contest of any Tax liability for which the Sellers are liable under this Article VII. (b) In the case of Taxes that are payable with respect to a taxable period that begins before the Closing Date and ends after the Closing Date, the portion of any such Tax that is allocable to the portion of the period ending on the Closing Date shall be: (i) in the case of Taxes that are either (x) based upon or related to income or receipts, or (y) imposed in connection with any sale or other transfer or assignment of property (real or personal, tangible or intangible) (other than conveyances pursuant to this Agreement, as provided under Section 7.06), deemed equal to the amount which would be payable if the taxable year ended with the Closing Date; and (ii) in the case of Taxes imposed on a periodic basis with respect to the assets of the Sellers or any Subsidiary, or otherwise measured by the level of any item, deemed to be the amount of such Taxes for the entire period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period) multiplied by a fraction the numerator of which is the number of calendar days in 59 60 the period ending on the Closing Date and the denominator of which is the number of calendar days in the entire period. SECTION 7.02. Returns and Payments. From the date of this Agreement through and after the Closing Date, the Sellers shall prepare and file or otherwise furnish in proper form to the appropriate Governmental Authority (or cause to be prepared and filed or so furnished) in a timely manner all Tax returns, reports and forms ("RETURNS") relating to the Sellers, Century CP and the Business that is due on or before or relates to any taxable period ending on or before the Closing Date (and the Purchaser shall do the same for Returns relating to Century CP and the Business with respect to any taxable period ending after the Closing Date). Returns of Century CP and the Business not yet filed for any taxable period that begins before the Closing Date shall be prepared in a manner consistent with past practices employed with respect to Century CP, but only if the preparation of such Returns in a manner inconsistent with past practices would have a Material Adverse Effect on the non-preparing party (except (i) to the extent counsel for the Sellers renders a legal opinion stating that there is no reasonable basis in law therefor or that a Return cannot be so prepared and filed without being subject to penalties or (ii) with the consent of the Purchaser, which shall not be unreasonably withheld). With respect to any Return required to be filed by the Purchaser or the Sellers with respect to Century CP and the Business and as to which an amount of Tax is allocable to the other party under Section 7.01(b), the filing party shall provide the other party and its authorized representatives with a copy of such completed Return and a statement certifying the amount of Tax shown on such Return that is allocable to such other party pursuant to Section 7.01(b), together with appropriate supporting information and schedules at least 20 Business Days prior to the due date (including any extension thereof) for the filing of such Return, and such other party and its authorized representatives shall have the right to review and comment on such Return and statement prior the filing of such Return. The Sellers and the Purchaser agree to consult and resolve in good faith any issue arising out of the review of any such Tax Return. In the event the parties are unable to resolve any dispute within thirty (30) days following the delivery of such Tax Return by the filing party to the non-filing party, the parties shall resolve their dispute by jointly requesting that a mutually acceptable accounting firm which is not the past or then current principal auditors of the Purchaser or the Sellers resolve any issue before the due date of such Tax Return, in order that such Tax Return may be timely filed. The scope of the accounting firm's review shall be limited to the disputed items. The Sellers and the Purchaser shall each pay one-half of the accounting firm's fees and expenses. SECTION 7.03. Tax Refunds and Credits. The Purchaser shall, within forty-five (45) days following receipt of any tax refund, credit or offset, pay to the Sellers the amount of any Tax refund or credit or offset (including any interest paid or credited or any offset allowed with respect thereto), but reduced by any Taxes that the Purchaser or Century CP shall be required to pay with respect thereto, received or used, in the case of a credit or offset, by the Purchaser or Century CP of Taxes (i) relating to taxable periods or portions thereof ending on or before the Closing Date (including any taxes allocated to such period under Section 7.01(b) hereof), or (ii) attributable to an amount paid by the Sellers under Section 7.01(a) hereof. The amount of any refunds or credits or offsets (including any interest paid or credited with respect 60 61 thereto) received by the Purchaser or Century CP shall be for the account of the Purchaser if the refund, credit or offset is of Taxes relating to taxable periods that begin after the Closing Date (including any taxes allocated to such period under Section 7.01(b) hereof). The Purchaser may, for its own account, claim a refund, credit or offset that relates to an adjustment to a taxable period that begins before the Closing Date that arises from an adjustment to a taxable period beginning on or after the Closing Date, provided, however, that the Sellers must consent to any such refund claim, which consent may not be unreasonably withheld (for this purpose, withholding of consent shall be reasonable if such refund claim could reasonably be expected to have a material tax cost or otherwise materially adversely affect the Sellers. The Purchaser shall, if the Sellers so request and at the Sellers' expense, cause the relevant entity to file for and use commercially reasonable efforts to obtain and expedite the receipt of any refund to which the Sellers are entitled under this Section 7.03, provided, however, that the Purchaser must consent to any such refund claim, which consent may not be unreasonably withheld (for this purpose, withholding of consent shall be reasonable if such refund claim could reasonably be expected to have a material tax cost or otherwise materially adversely affect the Purchaser, Century CP or any of their Affiliates). SECTION 7.04. Time of Payment. Payment by the Sellers of any amount due under this Article VII shall be made within thirty (30) days following written notice by the Purchaser that payment of such amounts to the appropriate Tax authority or other appropriate party is due; provided that in the case of any payment due to a Tax authority or other appropriate party the Sellers shall not be required to make any payment earlier than two days before it is due to the appropriate Tax authority. In the case of a Tax that is contested in accordance with the provisions of Section 7.08 (other than a Tax contested in any administrative or judicial proceeding in which the Tax contested must be paid prior to or upon commencement of such proceeding), payment of the Tax to the appropriate Tax authority will not be considered to be due earlier than the date a final determination has been made as defined in Section 1313(a) of the Code or as finally determined pursuant to any similar rule or provision of any relevant applicable Tax laws of any state, local, foreign or other Tax jurisdiction (a "FINAL DETERMINATION"). SECTION 7.05. Cooperation and Exchange of Information. Upon the terms set forth in Section 5.02, the Sellers and the Purchaser will provide each other with such cooperation and information as either of them reasonably may request of the other in facilitating an appraisal of the assets of the Business, preparing and filing any Return, amended Return or claim for refund, determining a liability for Taxes or a right to a refund of Taxes, participating in or conducting any audit or other proceeding in respect of Taxes or making representations to or furnishing information to parties subsequently desiring to purchase all or a part of the Business from the Purchaser. Such cooperation and information shall include providing copies of relevant Returns or portions thereof, together with accompanying schedules, related work papers and documents relating to rulings or other determinations by Tax authorities. The Sellers shall make its employees available on a basis mutually convenient to both parties to provide explanations of any documents or information provided hereunder. Each of the Sellers and the Purchaser shall retain all Returns, schedules and work papers, records and other documents in its possession relating to Tax matters of the Business for each taxable period first ending after the Closing Date 61 62 and for all prior taxable periods until the later of (i) the expiration of the statute of limitations of the taxable periods to which such Returns and other documents relate, without regard to extensions except to the extent notified by the other party in writing of such extensions for the respective Tax periods, or (ii) six years following the due date (without extension) for such Returns. Any information obtained under this Section 7.05 shall be kept confidential except as may be otherwise necessary in connection with the filing of Returns or claims for refund or in conducting an audit or other proceeding. SECTION 7.06. Conveyance Taxes. The Sellers and the Purchaser shall be equally liable for and each shall pay one-half of any real property transfer or gains, sales, use, transfer, value added, stock transfer, and stamp taxes, any transfer, recording, registration, and other fees, and any similar Taxes which become payable in connection with the transactions contemplated by this Agreement. The Sellers, after the review and consent by the Purchaser, shall file such applications and documents as shall permit any such Tax to be assessed and paid on or prior to the Closing Date in accordance with any available pre-sale filing procedure. The Purchaser shall execute and deliver all instruments and certificates necessary to enable the Sellers to comply with the foregoing. The Purchaser shall complete and execute a resale or other exemption certificate with respect to the inventory items sold hereunder, and shall provide the Sellers with an executed copy thereof. SECTION 7.07. Section 338(h)(10) Election. (a) Century and the Purchaser shall jointly make a deemed asset sale election described under Code section 338(h)(10) (the "CODE SECTION 338(h)(10) ELECTION") and shall make all corresponding or similar elections under applicable state or local law with respect to the qualified stock purchase of Shares by the Purchaser hereunder (collectively, "ELECTIONS"). Century and the Purchaser shall file all such Elections on a timely basis and comply with all rules and regulations applicable to such Elections. Century and the Purchaser shall cooperate with each other to take all actions necessary and appropriate (including filing such forms, returns, elections, schedules and documents on a joint or separate basis as may be required) to effect and preserve timely Elections in accordance with applicable Treasury Regulations under Code section 338 and comparable state or local laws. (b) Within sixty (60) calendar days following the Closing Date, the Purchaser will deliver to Century a completed Internal Revenue Service Form 8023, and the required schedules thereto ("FORM 8023"), providing for the Section 338(h)(10) Election. If, within 30 calendar days after the date of Purchaser's delivery of the Form 8023, Century disputes one or more of the allocations reflected in items 9a or 11a of Form 8023, Century will give written notice to the Purchaser setting forth the allocations that Century believes should be reflected on Form 8023 (but in no event will Century's allocations reflected in items 9a and 11a of Form 8023 be less than that of the Purchaser's), and Century and the Purchaser shall be bound by Century's allocations so long as such allocations are consistent with the terms of this Agreement, which allocations shall be contained in a revised Form 8023. If Century reasonably disputes any other allocations or computations reflected on the Form 8023, Century and the Purchaser will attempt in good faith to promptly agree on a revised Form 8023. If the parties cannot resolve 62 63 any such dispute within 30 Business Days of the delivery by the Purchaser of the Form 8023 to Century, the items remaining in dispute shall be submitted to an independent accounting firm of international reputation selected by, and mutually acceptable to, Century and the Purchaser. If the independent accounting firm so selected determines that the allocation with respect to any item or items remaining in dispute is incorrect and that Century would be materially adversely affected by the incorrectness of such allocation, then Century and the Purchaser shall be bound by the allocation of such items as determined by the independent accounting firm. Otherwise, the Purchaser and Century shall be bound by the allocation with respect to such item or items as prepared by the Purchaser. The independent accounting firm shall make any such determination within 30 Business Days after submission of the remaining disputed items. SECTION 7.08. Contests. (a) After the Closing Date, each of the Sellers and the Purchaser shall promptly notify the other party in writing upon receipt of written notice of the commencement of any Tax audit or administrative or judicial proceeding or of any demand or claim on the Sellers, the Purchaser or Century CP which, if determined adversely to the taxpayer or after the lapse of time, would be grounds for indemnification by the other party under Section 7.01. Such notice shall contain factual information (to the extent known to the notifying party) describing the asserted Tax liability in reasonable detail and shall include copies of any notice or other document received from any taxing authority in respect of any such asserted Tax liability. If the indemnitee under Section 7.01 fails to give the indemnitor under Section 7.01 prompt notice of an asserted Tax liability as required by this Section 7.08, then the indemnitor shall not have any obligation to indemnify for any loss arising out of such asserted Tax liability but only to the extent that failure to give such notice results in a detriment to the indemnitor. (b) In the case of an audit or administrative or judicial proceeding that relates to periods ending on or before the Closing Date, the Sellers shall have the sole right, at their expense, to control the conduct of such audit or proceeding, but only to the extent that such audit or proceeding relates to a Tax for which the Sellers have a potential indemnification obligation under Section 7.01; provided, however, that if the results of such contest could reasonably be expected to have a material Tax cost to the Purchaser or Century CP for any taxable period including or ending after the Closing Date, then the Sellers and the Purchaser shall jointly control the defense and settlement of any such contest and each party shall cooperate with the other party at its own expense and there shall be no settlement or closing or other agreement with respect thereto without the consent of the other party, which consent shall not be unreasonably withheld and, if the Sellers do not assume the defense of any such audit or proceeding, the Purchaser may defend the same in such manner as it may deem appropriate, including, but not limited to, settling such audit or proceeding; provided, however, that the Purchaser shall not settle any such audit or proceeding without the consent of the Sellers, which consent shall not be unreasonably withheld. If the Sellers choose to control the contest, the Purchaser shall promptly empower and shall cause Century CP or other party promptly to empower (by power of attorney and such other documentation as may be appropriate) such representatives of the Sellers as they may designate to represent the Purchaser or Century CP or other party or its successor in the contest insofar as the contest involves an asserted tax liability for which the Sellers would be liable under Section 7.01. The Purchaser shall have sole control over the defense and settlement of any contest relating to taxable periods or portions thereof that begin on or after the Closing Date (including, subject to Section 7.08(c) hereof, any Taxes allocated to such period under Section 7.01(b) hereof) or relating to taxable periods or portions thereof ending on or before the Closing Date 63 64 provided the Taxes to which such contest relates are Taxes for which Sellers are not liable under Section 7.01(a) hereof, provided, however, that if the results of any such contest otherwise controlled by the Purchaser could reasonably be expected to have a material Tax cost or otherwise materially adversely affect the Sellers, then the Sellers and the Purchaser shall jointly control the defense and settlement of any such contest and each party shall cooperate with the other party at its own expense and there shall be no settlement or closing or other agreement with respect thereto without the consent of the other party, which consent shall not be unreasonably withheld. (c) With respect to periods beginning before the Closing Date and ending after the Closing Date, (i) each party may participate in an audit or proceeding which relates to any such period and (ii) such audit or proceeding shall be controlled by that party which would bear the burden of the greater portion of the sum of the adjustment and any corresponding adjustments that may reasonably be anticipated for future Tax periods; provided that neither party shall settle any such audit or proceeding without the consent of the other, which consent shall not be unreasonably withheld. The principle set forth in the preceding sentence shall govern also for purposes of deciding any issue that must be decided jointly (in particular, choice of judicial forum) in situations in which separate issues are otherwise controlled hereunder by the Purchaser and the Sellers. (d) The Purchaser and the Sellers agree to cooperate, and the Purchaser agrees to cause Century CP to cooperate, in the defense against or compromise of any claim in any audit or proceeding. (e) The Sellers shall promptly notify the Purchaser of the commencement of any claim, audit, examination or other written change or adjustment received by the Sellers, in each case relating to Century CP, by any taxing authority which could reasonably be expected to affect the liability of the Purchaser or Century CP for a material amount of Taxes, and the Sellers shall keep the Purchaser informed of the progress thereof. The failure to provide such notice shall not affect the indemnification obligations under this Article VII unless the indemnified party is materially prejudiced as a result of such failure. SECTION 7.09. Miscellaneous. (a) The Sellers and the Purchaser agree to treat all payments made under Section 2.09 and this Article VII and under any other indemnity provision contained in this Agreement as adjustments to the Purchase Price for Tax purposes and that such treatment shall govern for purposes hereof. (b) The covenants and obligations of parties under this Article VII, and the representations and warranties of Sellers set forth in Section 3.25 hereof, shall survive the Closing and shall remain in full force and effect until the expiration of all statutes of limitations on assessment or collection of Tax plus 180 days with respect to any Taxes that would be indemnifiable by the Sellers under this Agreement. (c) From and after the date of this Agreement, the Sellers shall not without the prior written consent of the Purchaser (which consent may not be unreasonably withheld) make, 64 65 or cause or permit to be made, any Tax election not consistent with prior practices that could be reasonably expected to have a Material Adverse Effect. (d) The Sellers and the Purchaser agree that the fair market value of the assets of Century CP, in the aggregate, generally equals the adjusted tax basis in those assets as of the date of this Agreement. (e) For purposes of this Article VII, all references to the Purchaser, the Sellers, Century CP and the Subsidiaries include successors. (f) All tax sharing agreements or similar agreements with respect to or involving the Sellers and Century CP shall be terminated with respect to Century CP as of the Closing Date and, after the Closing Date, Century CP shall not be bound thereby or have any liability thereunder. ARTICLE VIII CONDITIONS TO CLOSING SECTION 8.01. Conditions to Obligations of the Sellers. Subject to the proviso in Section 10.01(b), the obligations of the Sellers to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions: (a) Representations, Warranties and Covenants. (i) The representations and warranties of the Purchaser contained in this Agreement shall be true and correct as of the Closing, with the same force and effect as if made as of the Closing Date; except to the extent that any inaccuracies as of the Closing Date in the representations and warranties would not be reasonably likely to have, individually or in the aggregate, a material adverse effect on the ability of the Purchaser to consummate the transactions contemplated by this Agreement (provided that for purposes of determining whether any representation or warranties are inaccurate as of the Closing Date any representation or warranty that is qualified by a standard of materiality shall be required to be true in all respects without giving effect to such materiality standard), (ii) the covenants and agreements contained in this Agreement to be complied with by the Purchaser on or before the Closing shall have been complied with in all material respects, and (iii) the Sellers shall have received a certificate from the Purchaser to such effect signed by a duly authorized officer thereof; (b) HSR Act. Any waiting period (and any extension thereof) under the HSR Act applicable to the purchase of the Assets contemplated by this Agreement shall have expired or shall have been terminated; 65 66 (c) No Proceeding or Litigation. No Action shall have been commenced by or before any Governmental Authority against either the Sellers or the Purchaser, seeking to restrain or materially and adversely alter the transactions contemplated by this Agreement which is reasonably likely to render it impossible or unlawful to consummate such transactions; provided, however, that the provisions of this Section 8.01(c) shall not apply if the Sellers have directly or indirectly solicited or encouraged any such Action; (d) Ancillary Agreements. The Purchaser shall have executed and delivered to the Sellers each of the Ancillary Agreements to which it or any of its Affiliates is a party; (e) Resolutions of the Purchaser. The Sellers shall have received a true and complete copy, certified by a duly authorized officer of the Purchaser, of the resolutions duly and validly adopted by the Board of Directors of the Purchaser evidencing its authorization of the execution and delivery of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby. SECTION 8.02. Conditions to Obligations of the Purchaser. Subject to the proviso in Section 10.01(a), the obligations of the Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions: (a) Representations, Warranties and Covenants. (i) The representations and warranties of the Sellers contained in this Agreement shall be true and correct as of the Closing with the same force and effect as if made as of the Closing, except to the extent that any inaccuracies as of the Closing Date in the representations and warranties would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect (provided that for purposes of determining whether any representations or warranties are inaccurate as of the Closing Date any representation or warranty that is qualified by a standard of materiality shall be required to be true in all respects without giving effect to such materiality standard; provided that solely for purposes of this Section 8.02(a), if there is any circumstance, change in or effect on the Business whose adverse effect on the Business is monetary, such circumstance, change or effect shall be deemed to be a Material Adverse Effect if such monetary liability is greater than $15,000,000); (ii) the covenants and agreements contained in this Agreement to be complied with by the Sellers on or before the Closing shall have been complied with in all material respects except that the Sellers shall have complied in all respects with their obligations under Article II hereof, and (iii) the Purchaser shall have received a certificate of the Sellers to such effect signed by duly authorized officers thereof; (b) HSR Act. Any waiting period (and any extension thereof) under the HSR Act applicable to the purchase of the Assets contemplated hereby shall have expired or shall have been terminated; 66 67 (c) No Proceeding or Litigation. No Action shall have been commenced by or before any Governmental Authority against either the Sellers or the Purchaser, seeking to restrain or materially and adversely alter the transactions contemplated by this Agreement which is reasonably likely to render it impossible or unlawful to consummate such transactions or which would be reasonably likely to have a Material Adverse Effect; provided, however, that the provisions of this Section 8.02(c) shall not apply if the Purchaser has solicited or encouraged any such Action; (d) Resolutions of the Sellers. The Purchaser shall have received a true and complete copy, certified by the Secretary or an Assistant Secretary of each of the Sellers, of the resolutions duly and validly adopted by the Board of Directors of each of the Sellers and the stockholders of Century WV evidencing their authorization of the execution and delivery of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby; (e) Consents and Approvals. The Purchaser and the Sellers shall have received, each in form and substance reasonably satisfactory to the Purchaser, all authorizations, consents, orders and approvals of all Governmental Authorities and officials which are necessary for the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements or for the conduct of the Business by the Purchaser immediately after giving effect to the Closing, except where the failure to obtain any such authorizations, consents, orders or approvals would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect after giving effect to consummation of the transactions contemplated by this Agreement and the Ancillary Agreements; (f) Resignations. The Purchaser shall have received the resignations, effective as of the Closing, of all directors and officers of Century CP, except for such persons as shall have been designated in writing prior to the Closing by the Purchaser to the Sellers; (g) Minute Books. The Purchaser shall have received a copy of the minute books and stock register of Century CP, certified by the Secretary or Assistant Secretary of Century CP, as of the Closing; (h) Good Standing; Qualification to Do Business. The Purchaser shall have received good standing certificates for Century CP from the secretary of state of the jurisdiction in which such entity is incorporated or organized and from the secretary of state in each other jurisdiction in which the failure of Century CP to qualify to do business as a foreign corporation would be reasonably likely to have a material and adverse effect on the business of Century CP, in each case dated as of a date not earlier than ten Business Days prior to the Closing Date and accompanied by bring-down telegrams dated the Closing Date; 67 68 (i) Ancillary Agreements. Each of the Sellers or its Affiliates shall have executed and delivered to the Purchaser each of the Ancillary Agreements to which a Seller or any of its Affiliates is a party; (j) No Material Adverse Effect. No circumstance, change in, or effect on the Business shall have occurred which has or, with the passage of time is reasonably expected to have, individually or in the aggregate, a Material Adverse Effect; provided that to the extent any such circumstance, change or effect on the Business results in an inaccuracy as of the Closing Date in the representations and warranties of the Sellers, such circumstance, change or effect shall not be separately considered under this Section 8.02(j) for purposes of determining whether a Material Adverse Effect has occurred or is reasonably expected to occur; (k) New Collective Bargaining Agreement. The collective bargaining agreement with the United Steelworkers of America (the "USWA") entered into and agreed upon by Century WV effective June 1, 1999 and the terms thereof are effective and binding on the parties and have not been amended since such date; (l) Major Customer. (i) The Major Customer shall have consented to the assignment to the Purchaser of the Sellers' rights and obligations under the agreements entered into with such Major Customer and the Major Customer shall not have terminated or materially and adversely altered, or given notice that it intends to terminate or materially and adversely alter, its commercial arrangements with the Business and (ii) The Lockheed Martin Corporation ("LOCKHEED") shall have consented to the assignment to the Purchaser of Century WV's rights and obligations under the agreements entered into with Lockheed in October 1998; (m) Taxes and Fees. The Sellers shall have paid one-half of all transfer, deed, gains, stamp and all other similar taxes and special assessments and recording charges, if any; (n) Title Policy. The Purchaser shall have received, at its sole cost and expense, an owner's form of policy or policies of title insurance, dated or updated to the Closing Date (the "TITLE POLICY") with liability in the amount reasonably specified by the Purchaser, insuring that the Purchaser has a good and marketable fee estate in and to the Owned Real Property subject only to the Permitted Encumbrances and the Permitted Property Encumbrances. The Title Policy shall be issued by a title company satisfactory to the Purchaser (the "TITLE COMPANY"), and shall insure (to the extent insurable) any easements, leasehold estates or other matters appurtenant to or benefitting the Owned Real Property as part of the insured estate. In the event delivery of the Title Policy is not possible as of the Closing, Purchaser shall have received at the Closing the irrevocable and unconditional binding commitment of the Title Company to issue the Title Policy in the form of a so-called "pro-forma policy", or "marked binder"; 68 69 (o) Title Indemnity. The Sellers shall have provided to the Title Company a "gap" indemnity, indemnifying the Title Company against matters affecting title (other than Permitted Encumbrances) between the Closing Date and the date of recordation of the Deed or Deeds; (p) Title Proof. The Sellers shall have provided to the Title Company such reasonable and customary title affidavits, indemnities, undertakings and "proofs" as may be customary in the jurisdiction in which the Owned Real Property is situated or as may be reasonably required by the Title Company; (q) Survey. The Purchaser shall have received, at least ten (10) days prior to the Closing, at the Sellers' sole cost and expense, an "as-built" survey or surveys of the Owned Real Property reasonably satisfactory to the Purchaser, certified to the Purchaser and the Title Company by a licensed surveyor approved by the Purchaser, dated or updated not earlier than sixty (60) days prior to the Closing, complying with the latest edition of the ALTA and ASCM Minimum Standard Detail Requirements for Land Title Surveys, including Table A items reasonably requested by the Purchaser; (r) Easements. The Sellers, at their sole cost and expense, shall have executed, acknowledged and recorded such easements as shall be necessary for the Purchaser to operate the Business, including, without limitation, those easements contemplated in Schedule 8.02(r); (s) Conveyance. The conveyance of the Owned Real Property shall be in compliance with all material zoning, subdivision, land use, and other Laws, and the Owned Real Property shall be assessed as a separate tax lot for real property tax assessment purposes; (t) Certificate of Non-Foreign Status. The Purchaser shall have received a certificate from the Sellers (which complies with Section 1445 of the Code) of non-foreign status executed in accordance with the provisions of the Foreign Investment in Real Property Tax Act; and (u) Utilities. The Purchaser shall have rights to obtain from the utility provider utilities on terms and conditions, including cost, similar to those currently in effect. (v) Environmental Permits. All Environmental Permits required for the Purchaser, as the new owner of the Assets, to conduct the Business as of the Closing shall be in full force and effect except (i) as would not be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect, and (ii) as would not materially and adversely affect the Purchaser's ability to operate the Business. 69 70 ARTICLE IX INDEMNIFICATION SECTION 9.01. Survival of Representations and Warranties. The representations and warranties of the Purchaser and the Sellers contained in this Agreement shall survive the Closing until the second anniversary thereof; provided, however, that (a) the representations and warranties of the Sellers dealing with Tax matters shall survive as provided in Article VII, (b) insofar as any claim is made by the Purchaser for the breach of any representation or warranty of the Sellers contained herein relating to environmental matters, such representations and warranties shall, for purposes of such claims by the Purchaser, survive the Closing until the sixth anniversary of the Closing, and (c) the representations and warranties contained in Section 3.01 (other than the second sentence thereof) shall survive the Closing until the fourth anniversary thereof. Neither the period of survival nor the liability of the Sellers with respect to the Sellers' representations and warranties shall be reduced by any investigation made at any time by or on behalf of the Purchaser. If written notice of a claim has been given in good faith prior to the expiration of the applicable representations and warranties by the Purchaser to the Sellers pursuant to Section 9.04, then the relevant representations and warranties shall survive as to such claim until the claim has been finally resolved. SECTION 9.02. Indemnification by the Sellers. (a) Subject to Section 9.01, the Sellers shall, jointly and severally, indemnify, defend and hold harmless the Purchaser and its Affiliates, officers, directors, employees, agents, successors and assigns (each a "PURCHASER INDEMNIFIED PARTY") for any and all Liabilities, losses, damages, claims, costs and expenses, interest, awards, judgments and penalties (including, without limitation, reasonable attorneys' and consultants' fees and expenses) actually suffered or incurred (including, without limitation, any Action brought or otherwise initiated by any of them) (hereinafter a "LOSS") by them, arising out of or resulting from: (i) the breach of any representation or warranty made by the Sellers contained in this Agreement (other than in respect of Taxes and other amounts indemnified against under Article VII, it being understood that the rights and obligations of the parties with respect to indemnification for any and all Tax matters shall be governed by Article VII); or (ii) the breach of any covenant or agreement by the Sellers contained in this Agreement (other than any covenant in Article VII, it being understood that the rights and obligations of the parties with respect to indemnification for any and all Tax matters shall be governed by Article VII); or (iii) with the exception of Losses associated with items set forth in Section 3.16(a) of the Disclosure Schedule, (A) any Releases of Hazardous Material requiring an investigation or remediation under any applicable Environmental Law at, on, under, migrating from (but only to the extent migrating on or prior to the Closing) or to, or 70 71 transported from (but only to the extent transported on or prior to the Closing) the Real Property, or any property formerly owned, leased, occupied or used by the Sellers, Century CP or the Business but only during the period in which such former property was owned, leased, occupied or used by any such Person, in any such case on or prior to the Closing; or any continuing migration of such Hazardous Material from the Real Property after the Closing (including, without limitation, any Remedial Action at any time after the Closing relating to such Hazardous Material), except (I) in respect of matters set forth in Section 3.16(a) of the Disclosure Schedule, if the Purchaser's actions or inactions are the cause of such off-site migration or (II) in respect of any other pre-Closing disposal or Release at the Real Property, if the Purchaser's negligence is the cause of such off-site migration; (B) any Environmental Claim arising at any time that relates to the Sellers, Century CP, the Business or the Real Property on or prior to the Closing; or (C) any noncompliance with or violation of any applicable Environmental Law or Environmental Permit relating in any way to the Sellers or the Business on or prior to the Closing, or any continuation of such violation or non-compliance after the Closing; or (iv) Liabilities relating to or arising from employee claims described in Section 2.02(b)(iv) to the extent such claims exceed the amount described in such Section; or (v) without prejudice to Section 6.07, any action taken by the PBGC relating to the defined benefit pension plans maintained prior to the Closing by the Sellers for the Transferred Employees or to the assets of the Sellers which are not the Shares and Rolling Assets purchased hereunder; or (vi) Liabilities arising from or related to any failure to comply with laws relating to bulk transfers or bulk sales with respect to the transactions contemplated by this Agreement; or (vii) the Excluded Liabilities; or (viii) except as otherwise provided in Article VI, Liabilities for benefits, or under any of Century CP's Plans; or (ix) Liabilities relating to or arising out of Actions brought against Century CP (other than worker's compensation claims) associated with employment actions, omissions or events, including, without limitation, employment discrimination claims, and claims for workplace related injuries by employees which occurred or were incurred or accrued on or before the Closing Date, but only to the extent such Liabilities (together with all Liabilities relating to or arising from employee claims described in Section 2.02(b)(iv)), individually or in the aggregate, exceeded $600,000; or (x) all Liabilities of Century CP in the nature of product liability claims relating to or arising out of allegations of personal injury or property damage suffered by any third party (A) on or prior to the Closing Date or (B) attributable to products sold or 71 72 shipped, or Inventory purchased or manufactured, in each case in respect of the conduct of the Rolling Business on or prior to the Closing Date; or (xi) Liabilities under Environmental Laws relating to or arising out of (A) Hazardous Material transported from the Vernon Owned Real Property pre-Closing; (B) any off-site migration of Hazardous Material resulting from any pre-Closing off-site disposal or Release of such Hazardous Material; (C) any off-site migration of Hazardous Material from the Vernon Owned Real Property resulting from any pre-Closing disposal or Release at the Vernon Owned Real Property, except (I) in respect of matters set forth in Section 3.16(a) of the Disclosure Schedule, if the Purchaser's actions or inactions are the cause of such off-site migration or (II) in respect of any other pre-Closing disposal or Release at the Vernon Owned Real Property, if the Purchaser's negligence is the cause of such off-site migration; and (D) any on-site PCB contamination existing or occurring on or before the Closing at the Vernon Owned Real Property, or any off-site PCB contamination, whether existing or occurring before or after the Closing, resulting from or arising out of operations at the Vernon Owned Real Property on or before the Closing, in each case requiring investigation or remediation or other action under applicable Environmental Law; it being understood that for purposes of this clause 9.02(a)(xi)(D), "Environmental Laws" include regulations adopted by the State of California or a subdivision thereof after the Closing Date pursuant to statutes enacted before the Closing Date; or (xii) Indebtedness of Century CP, other than obligations under equipment leases that have, or should have, been recorded as capital leases. (b) To the extent that the Sellers' undertakings set forth in this Section 9.02 may be unenforceable, each Seller shall contribute the maximum amount that it is permitted to contribute under applicable Law to the payment and satisfaction of all Losses incurred by a Purchaser Indemnified Party. (c) The Sellers shall not be required to indemnify any Purchaser Indemnified Party under (1) Section 9.02(a)(i) (except to the extent a claim relates to or arises from the breach of any representation or warranty contained in Sections 3.01 (other than the second sentence thereof) or 3.31), (2) Section 9.02(a)(ii), (3) Section 9.02(a)(iii) (except to the extent a claim relates to or arises from the Excluded Liabilities set forth in Section 2.02(b)(vi) (other than Section 2.02(b)(vi)(C) or Section 9.02(a)(xi) (other than Section 9.02(a)(xi)(C)), for which there is no indemnity limit) and (4) Section 9.02(a)(v), unless (x) such claim or demand involves Losses in excess of $50,000 and (y) the aggregate amount of all Losses for which indemnity is due exceeds $2,000,000, after which (subject to Section 9.06) the Sellers shall be obligated for all Losses of the Purchaser Indemnified Parties in excess of such amount. Claims or demands which are based on the same or similar or related facts shall be treated as a single claim when determining whether the threshold set out in Section 9.02(c)(x) has been reached. Any indemnifiable liability with respect to any breach or non-performance by the Sellers of a representation, warranty or covenant shall be limited to the amount of damages sustained by a Purchaser Indemnified Party by reason of such breach or non-performance net of any reserves provided for such liability on the Reference Balance Sheet. 72 73 SECTION 9.03. Indemnification by the Purchaser. (a) Subject to Section 9.01, the Purchaser shall indemnify, defend and hold harmless the Sellers and their Affiliates (other than Century CP), officers, directors, employees, agents, successors and assigns (each a "SELLER INDEMNIFIED PARTY") for any and all Losses actually suffered or incurred by them, arising out of or resulting from: (i) the breach of any representation or warranty made by the Purchaser contained in this Agreement; or (ii) the breach of any covenant or agreement by the Purchaser contained in this Agreement (including, without limitation, any covenant in Article VII); or (iii) any liabilities or obligations resulting from or arising out of the conduct of the Business on or after the Closing Date, except for any liabilities or obligations with respect to which the Sellers are obligated to indemnify a Purchaser Indemnified Party; or (iv) any action taken by the PBGC relating to the New Defined Benefit Plans or to the Shares and Rolling Assets purchased hereunder; or (v) liabilities and obligations arising from employee claims described in Section 2.02(a)(iii) to the extent such claims do not exceed the amounts described in such Section. (b) To the extent that the Purchaser's undertakings set forth in this Section 9.03 may be unenforceable, the Purchaser shall contribute the maximum amount that it is permitted to contribute under applicable Law to the payment and satisfaction of all Losses incurred by a Seller Indemnified Party. SECTION 9.04. Notification of Claims. (a) A party that may be entitled to be indemnified pursuant to Section 9.02 or 9.03 (the "INDEMNIFIED PARTY") shall promptly notify the party liable for such indemnification (the "INDEMNIFYING PARTY") in writing of any pending or threatened claim or demand which the Indemnified Party has determined has given or could give rise to a right of indemnification under this Agreement (including a pending or threatened claim or demand asserted by a third party ("THIRD PARTY CLAIMS") against the Indemnified Party), describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Article IX except to the extent the Indemnifying Party is materially prejudiced by such failure. Subject to the Indemnifying Party's right to defend in good faith Third Party Claims as hereinafter provided, the Indemnifying Party shall (whether in respect of a claim which is not a third party claim or in respect of a Third Party Claim) satisfy or contest its obligations under this Article IX within 15 days after the receipt of written notice thereof from the Indemnified Party. (b) If the Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party hereunder against any Losses that may result from such Third Party Claim, then the Indemnifying Party shall be entitled to assume and control the defense of such Third Party Claim at its expense and through counsel of its choice if it gives notice of its 73 74 intention to do so to the Indemnified Party within 15 days of the receipt of such notice from the Indemnified Party; provided, however, that the Indemnified Party may participate in such defense and retain separate counsel at its own cost and expense, without prejudice to the rights of the parties to control the defense of their respective interests. In the event the Indemnifying Party exercises the right to undertake any such defense against any such Third Party Claim as provided above, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party's expense, all witnesses, pertinent records, materials and information in the Indemnified Party's possession or under the Indemnified Party's control relating thereto as is reasonably required by the Indemnifying Party. Similarly, in the event the Indemnified Party is, directly or indirectly, conducting the defense against any such Third Party Claim, the Indemnifying Party shall cooperate with the Indemnified Party in such defense and make available to the Indemnified Party, at the Indemnifying Party's expense, all such witnesses, records, materials and information in the Indemnifying Party's possession or under the Indemnifying Party's control relating thereto as is reasonably required by the Indemnified Party. No such Third Party Claim may be settled by the Indemnifying Party without the written consent of the Indemnified Party (which consent shall not be unreasonably withheld). SECTION 9.05. Limits on Environmental Indemnification. (a) The Purchaser and the Sellers, as the case may be, may investigate, or cause to be investigated, the existence or the nature or extent of any release of Hazardous Materials and conduct any Remedial Action at or from the Real Property if such investigation is required by applicable Environmental Laws. The Sellers and the Purchaser shall consult with a view to determining what Remedial Action, if any is required, and any Remedial Action and any compliance activities shall be designed to assure the most cost effective action possible, consistent with applicable Environmental Laws. Any payments or expenses expended as required by a Governmental Order, a written demand for remedial or compliance action or a written demand for payment by any Governmental Authority shall be deemed to be consistent with the exercise of reasonable business judgment. The Purchaser shall mitigate to the extent practicable, any environmental Loss for which indemnification is claimed. If the Purchaser, by expenditure of money, reasonably can mitigate or otherwise reduce or eliminate any environmental Loss for which indemnification otherwise would be claimed, the Purchaser shall take such action and shall be entitled to prompt reimbursement from the Sellers for such expenditures and all related expenses. (b) If the Purchaser and the Sellers are unable, after reasonable inquiry, to determine whether a particular environmental Loss falls within Section 9.02(a)(iii) ("SECTION 9.02(A)(III) LOSS") or Section 9.03 ("SECTION 9.03 LOSS"), the parties shall refer the matter to a mutually acceptable environmental lawyer (the "INDEPENDENT EXPERT"). The Independent Expert shall be experienced in the environmental issues involved in the dispute and shall not in the past have been engaged by either the Purchaser or the Sellers and shall not otherwise be affiliated with either the Purchaser or the Sellers. Within ten (10) Business Days following the selection of the Independent Expert the Purchaser and the Sellers shall each submit to such Independent Expert, in writing not to exceed ten (10) pages in length, such party's proposed resolution of the matter in question, together with reasonable documentary evidence supporting such proposed resolution. The Independent Expert shall have the authority to request additional facts or evidence from each of the parties, and if such Independent Expert so requires, a hearing to present the same. The Independent Expert, shall within 40 Business Days from his or her 74 75 appointment, make a determination as to whether, and to what extent, such Loss (i) is a Section 9.02(a)(iii) Loss, (ii) is a Section 9.03 Loss or (iii) in his or her expert opinion, cannot be clearly determined to be either a Section 9.02(a)(iii) Loss or a Section 9.03 Loss in whole or in part. The Independent Expert's determination shall be final and binding on the parties. The costs and expenses of the Independent Expert shall be shared equally by the parties. (c) If the Independent Expert cannot clearly determine whether a particular Loss is, in whole or in part, a Section 9.02(a)(iii) Loss or a Section 9.03 Loss, the Sellers and the Purchaser will indemnify each other so as to allocate responsibility between themselves, according to the time when such Loss occurs, as follows:
Time Loss Occurs Sellers' Share of Purchaser's Share of - ---------------- ----------------- -------------------- Responsibility Responsibility -------------- -------------- From the Closing Date through one year 100% 0% after the Closing Date Thereafter through two years after the 83.3% 16.7% Closing Date Thereafter through three years after 67.7% 33.3% the Closing Date Thereafter through four years after 50% 50% the Closing Date Thereafter through five years after 33.3% 67.7% the Closing Date Thereafter through six years after the 16.7% 83.3% Closing Date After six years of the Closing Date 0% 100%
SECTION 9.06. Limits on Indemnification. Notwithstanding anything to the contrary contained in this Agreement, the maximum amount of indemnifiable Losses which may be recovered from the Sellers arising out of or resulting from the causes enumerated in (a) Section 9.02(a)(i) (with the exception of any Losses relating to arising from the breach of any representation or warranty contained in Sections 3.01 (other than the second sentence thereof) or 3.31) or (b) Section 9.02(a)(iii) (with the exception of any Losses relating to or arising from the Excluded Liabilities set forth in Section 2.02(b)(vi) (other than Section 2.02(b)(vi)(C)) or Section 9.02(a)(xi) (other than Section 9.02(a)(xi)(C)) for which there is no indemnity limit) shall be an amount equal to $25,000,000. SECTION 9.07. Indemnification Agreements. The parties hereto agree that to the extent the Purchaser or any other Purchaser Indemnified Party may be entitled to indemnification pursuant to either the Vernon Indemnity Agreement or the Ravenswood Indemnity Agreement, 75 76 on the one hand, or this Agreement, on the other hand, the Purchaser or any other Purchaser Indemnified Party, as the case may be, shall be entitled to seek indemnification under any one or more of such agreements; provided that to the extent a claim is made under one or more of such agreements, the validity of such claim shall be determined separately under each such agreement and to the extent valid under more than one such agreement, the Purchaser may elect under which agreement or agreements the Sellers shall make such indemnification payment (and any amounts payable in respect of such claim shall be determined in accordance with the terms and conditions of the agreement or agreements designated by the Purchaser and such amounts paid shall not be taken into consideration for purposes of determining the deductible or the maximum amount recoverable under any other agreement), provided that any recovery in respect of such claim shall be limited to the amount of Loss in respect of such claim. SECTION 9.08. Exclusive Remedies. The parties hereto acknowledge and agree that following the Closing the indemnification provisions of this Article IX, the Vernon Indemnity Agreement and the Kaiser Indemnity Agreement shall be the sole and exclusive remedies of, on the one hand, the Sellers against the Purchaser, and on the other hand, the Purchaser against the Sellers, for any breach of the representations, warranties, covenants or agreements herein or therein (as applicable in accordance with the terms of the indemnity provisions of each such agreement), except (i) for performance of the obligations set forth in Article II and Sections 5.03, 5.07, and 5.12, (ii) for performance of the obligations set forth in Article VII, as to which the obligations of the parties with respect to indemnification shall be exclusively governed by Article VII, (iii) for injunctive relief or specific performance to the extent available at Law, and (iv) in the event of willful breach, willful misrepresentation or fraud. SECTION 9.09. Sellers' Indemnity Support. The parties hereto agree that for so long as and at such times as the consolidated net worth of Century is less than $200,000,000, at the Seller's option: (a) for so long as the Purchaser shall be entitled to be indemnified pursuant to Article VII or Article IX, the Vernon Indemnity Agreement or the Ravenswood Indemnity Agreement, upon delivery pursuant to Article VII or Section 9.04, the Vernon Indemnity Agreement or the Ravenswood Indemnity Agreement by a Purchaser Indemnified Party of a notice regarding an indemnification claim or potential claim, the Purchaser is hereby authorized at any time and from time to time, to the fullest extent permitted by Law, to set off (for so long as such claim is pending) against any and all amounts due and payable by the Purchaser to the Sellers under this Agreement, any Ancillary Agreement or otherwise an amount equal to the amount of such claim, but in no event shall any such set-off pursuant to this Section 9.09(a) exceed $5,000,000; provided that the Purchaser shall promptly return any amount set off (plus interest thereon accruing at the average of the prime rate applicable during the period of set off) if and to the extent a court or judicial body of applicable jurisdiction shall determine that the Sellers are not liable to the Purchaser Indemnified Party for such claim; or (b) the Sellers shall obtain (and maintain in effect for so long as the Purchaser shall be entitled to be indemnified pursuant to Article VII or IX, the Vernon Indemnity Agreement or the Ravenswood Indemnity Agreement) an insurance policy, in form and substance reasonably satisfactory to the Purchaser, issued in favor of the Purchaser and its Affiliates from an insurer acceptable to the Purchaser, in its reasonable judgment, 76 77 providing at least $5,000,000 of coverage for amounts that are payable by the Sellers to a Purchaser Indemnified Party pursuant to the indemnification provisions set forth in Article VII or IX, the Vernon Indemnity Agreement or the Ravenswood Indemnity Agreement; and the Sellers and the Purchaser agree that the Sellers, on the one hand, and the Purchaser, on the other hand, shall each pay one half of the premiums payable in connection with obtaining and maintaining such insurance policy; provided that in no event shall the Purchaser be required to pay more than $100,000 in the aggregate in premiums or other payments in connection with obtaining and maintaining such insurance policy. ARTICLE X TERMINATION AND WAIVER SECTION 10.01. Termination. This Agreement may be terminated at any time prior to the Closing: (a) by the Purchaser, if between the date hereof and the time scheduled for the Closing, any Seller or Subsidiary makes a general assignment for the benefit of creditors, or any proceeding shall be instituted by or against any Seller or Subsidiary seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up or reorganization, arrangement, adjustment, protection, relief or composition of its debts under any Law relating to bankruptcy, insolvency or reorganization and such proceeding is not dismissed within 90 days, provided that the Purchaser shall not be required to consummate the transactions contemplated by this Agreement until such proceeding has been dismissed; or (b) by the Sellers, if between the date hereof and the time scheduled for the Closing, the Purchaser makes a general assignment for the benefit of creditors, or any proceeding shall be instituted by or against the Purchaser seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up or reorganization, arrangement, adjustment, protection, relief or composition of its debts under any Law relating to bankruptcy, insolvency or reorganization and such proceeding is not dismissed within 90 days, provided that the Sellers shall not be required to consummate the transactions contemplated by this Agreement until such proceeding has been dismissed; or (c) by either the Sellers or the Purchaser if the Closing shall not have occurred by January 26, 2000; provided, however, that the right to terminate this Agreement under this Section 10.01(c) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date; or (d) by either the Purchaser or the Sellers in the event that any Governmental Authority shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this 77 78 Agreement and such order, decree, ruling or other action shall have become final and nonappealable; or (e) by the mutual written consent of the Sellers and the Purchaser. SECTION 10.02. Effect of Termination. In the event of termination of this Agreement as provided in Section 10.01, this Agreement (including, without limitation, Section 5.07) shall forthwith become void and there shall be no liability on the part of either party hereto except (a) as set forth in Sections 10.02(b), 11.01 and 11.03 and (b) that nothing herein shall relieve either party from liability for any breach of this Agreement. SECTION 10.03. Waiver. Either party to this Agreement may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered by the other party pursuant hereto or (c) waive compliance with any of the agreements or conditions of the other party contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition, of this Agreement. The failure of any party to assert any of its rights hereunder shall not constitute a waiver of any of such rights. ARTICLE XI GENERAL PROVISIONS SECTION 11.01. Expenses. Except as otherwise specified in this Agreement, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred, provided that Century shall pay all such costs and expenses incurred by the Sellers. SECTION 11.02. Notices All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service, by telecopy or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 11.02): 78 79 (a) if to the Sellers: Century Aluminum Company 2511 Garden Road Building A, Suite 200 Monterey, California 93490 Telecopy: (831) 642-9328 Attention: General Counsel and Chief Administrative Officer with a copy to: Curtis, Mallet-Prevost, Colt & Mosle 101 Park Avenue New York, NY 10178 Telecopy: (212) 697-1559 Attention: Matias A. Vega, Esq. (b) if to the Purchaser: Pechiney Rolled Products LLC 8770 West Bryn Mawr Avenue Telecopy: (773) 399-3527 Attention: Eileen Burns Lerum with a copy to: Pechiney 7, place du Chancelier Adenauer 75016 Paris France Telecopy: (33-1) 56 28 33 07 Attention: Mark L. Cohen and Shearman & Sterling 599 Lexington Avenue New York, NY 10022 Telecopy: (212) 848-7179 Attention: David W. Heleniak, Esq. Alfred J. Ross, Jr., Esq. SECTION 11.03. Public Announcements. Until a public announcement has been made pursuant to this Section 11.03, except as may be required by Law or stock exchange rules, no party to this Agreement shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated hereby or otherwise 79 80 communicate with any news media without the prior written consent of the other parties, and the parties shall cooperate as to the timing and contents of any such press release or public announcement. Notwithstanding the foregoing, where an announcement is required by Law or stock exchange rules, the party required to make such an announcement shall notify the other parties of such requirement (and provide a copy of such announcement to the other parties) as soon as practicable in advance of such announcement and, to the extent practical, take the views of the other parties in respect of such announcement into account prior to making such announcement. SECTION 11.04. Headings. The descriptive headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. SECTION 11.05. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. SECTION 11.06. Entire Agreement. This Agreement and the Ancillary Agreements constitute the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior agreements and undertakings, both written and oral, between the Sellers and the Purchaser with respect to the subject matter hereof. SECTION 11.07. Assignment. This Agreement may not be assigned without the express written consent of the Sellers and the Purchaser (which consent may be granted or withheld in the sole discretion of the Sellers and the Purchaser); provided, however, that prior to the Closing the Purchaser may assign this Agreement to an Affiliate of the Purchaser without the consent of the Sellers. SECTION 11.08. No Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person, including, without limitation, any union or any employee or former employee of the Sellers or Century CP, any legal or equitable right, benefit or remedy of any nature whatsoever, including, without limitation, any rights of employment for any specified period, under or by reason of this Agreement. SECTION 11.09. Amendment. This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, the parties hereto or (b) by a waiver in accordance with Section 10.03. 80 81 SECTION 11.10. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, applicable to contracts executed in and to be performed entirely within that state. All actions and proceedings arising out of or relating to this Agreement shall be heard and determined in any New York state or federal court sitting in the City of New York. SECTION 11.11. Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. 81 82 IN WITNESS WHEREOF, the Sellers and the Purchaser have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. CENTURY ALUMINUM COMPANY By /s/ Craig A. Davis ---------------------------- Name: Title: CENTURY ALUMINUM OF WEST VIRGINIA, INC. By /s/ Gerald J. Kitchen ---------------------------- Name: Gerald J. Kitchen Title: Vice President PECHINEY ROLLED PRODUCTS LLC By /s/ J.M. Schemm ---------------------------- Name: J.M. Schemm Title: Vice President 83
EXHIBITS - -------- A Assumption Agreement B Bill of Sale C Deed D Management Services Agreement E Molten Aluminum Purchase Agreement F Ravenswood Indemnity Agreement G Vernon Indemnity Agreement
SCHEDULES - --------- 1.01(a) Leased Real Property 1.01(b) Current Assets and Current Liabilities 1.01(c) Permitted Property Encumbrances 1.01(d) Senior Managers 1.01(e) Ravenswood Owned Real Property 1.01(f) Vernon Owned Real Property 8.02(r) Easements
EX-2.2 3 MANAGEMENT SERVICES AGREEMENT 1 Exhibit 2.2 EXECUTION COPY MANAGEMENT SERVICES AGREEMENT THIS AGREEMENT, dated as of September 20, 1999 by and between Century Aluminum Company, a Delaware corporation ("Century") and Pechiney Rolled Products LLC, a Delaware limited liability company ("PAV"). WHEREAS, simultaneously with the execution hereof, PAV has acquired, pursuant to the terms of a Stock and Asset Purchase Agreement dated as of July 26, 1999 among the parties hereto and certain other persons (the "Purchase Agreement"), the Rolling Business (as such term is defined in the Purchase Agreement). WHEREAS, the parties have determined that it would be appropriate for Century to provide certain consulting services of the individuals listed on Annex A attached hereto (the "Consultants") to PAV to facilitate a smooth transition of ownership of the Rolling Business upon the terms set forth herein; NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows: 1. Consultants. Consultants are senior executives of Century, and, as such, have and will continue to have, as their primary responsibility, the management of Century. Nevertheless, for so long as such individuals are employed by Century, and are capable of meeting their obligations hereunder consonant with their responsibilities to Century, Century agrees to make available the services of each of the Consultants to PAV in the capacities set forth opposite each such Consultant's name on Annex A attached hereto (the "Consulting Items"). In connection with their respective capacities, as set forth on Annex A, Century shall require that such Consultants perform such services as the designated representative of PAV (the "Designated Person") shall reasonably request and as further described in Section 3 below. Notwithstanding any other provision in this Agreement, the Consultants shall continue to be employees of Century and shall not be employees of PAV. (b) The Consultants shall make their services available in the manner agreed upon between the Consultant and the Designated Person and as provided for in Section 3 below. (c) Neither Century, its affiliates or subsidiaries, nor any Consultant (collectively, the "Protected Persons") shall be liable to PAV, its affiliates or subsidiaries, or any third party for losses, claims or damages (whether direct, indirect, special, consequential or otherwise), including, without limitation, loss of profits, incurred by any such person related to or arising from the consultancy services of the Consultants provided hereunder. PAV shall indemnify and hold Protected Persons harmless, on demand, in respect of any claim against, or -1- 2 expense, loss or damage (including reasonable attorney fees) incurred by, any Protected Person related to or arising from the consulting services of the Consultants provided hereunder. 2. Term of Agreement. The term of this Agreement shall commence on the date hereof (the "Effective Date") and shall terminate on the earlier of (i) December 31, 2002, or (ii) the date on which PAV or Century elects to terminate this Agreement pursuant to Section 5 (the "Termination Date"). 3. Services to be Provided. (a) For the period of time commencing on the Effective Date, each Consultant responsible for the Consulting Items described in Annex A shall meet with PAV personnel, as reasonably requested, subject always to their obligations and duties to Century. Meetings may be in person, or by conference call. Under no circumstances shall the consulting services exceed the times set forth in Annex B. In the event that PAV requires advice or special knowledge that call for the expertise of the Century Chief Executive Officer, Craig A. Davis, Mr. Davis agrees to make himself reasonably available to provide such advice or share such knowledge (it being understood that Mr. Davis will not have a predetermined number of hours relating to such service). (b) All in person meetings described above shall be conducted in the offices of Century located in Ravenswood, West Virginia, or at such other locations in the United States as PAV shall reasonably decide. 4. Compensation and Benefits. (a) Century shall be solely responsible for payment of each of the Consultants' compensation and benefits, and the Consultants shall not be entitled to any compensation or benefits from PAV for services performed for PAV. (b) PAV shall reimburse Century pro rata for Century's cost based on the total annual compensation (salary and bonus) of each Consultant as shown on Century's most recent Proxy Statement from time to time, plus 30% (the "Cost"), which shall be computed as set forth in Annex C attached hereto. PAV shall pay Century for travel time and expenses and if travel time is for purposes in addition to PAV consulting, theses travel costs will be fairly prorated. (c) Unless otherwise agreed by the parties, the reimbursed Costs payable under Section 4(b) shall be paid monthly after submission by Century to PAV of a detailed invoice showing the hours expended and the amount owed with respect to the applicable month. (d) PAV shall pay to Century a fee which shall be computed by multiplying (x) the average of the earnings before income tax, depreciation and amortization for PAV calendar years 2001 and 2002 with respect to the Rolling Business (the "EBITDA of the Rolling Business") and (y) 0.40, and subtracting from such product (z) $18 million (the "Fee"). The Fee shall be paid to Century as soon as practicable after January 1, 2003, but in no case later than July 1, 2003. The EBITDA of the Rolling Business shall be computed by an auditor selected by PAV (the "PAV Auditor"). Century may request a second computation of the EBITDA of the Rolling Business by an auditor of its choice (the "Century Auditor"), if Century reasonably believes that the EBITDA of the Rolling Business as computed by the PAV Auditor, is in error. In the event that the EBITDA of the Rolling Business, as computed by the Century Auditor, is -2- 3 within 10% of the EBITDA of the Rolling Business as computed by the PAV Auditor, the parties will agree that the EBITDA of the Rolling Business to be used to calculate the Fee shall be an average of the two. In the event that the EBITDA of the Rolling Business, as computed by the Century Auditor, is not within 10% of the EBITDA of the Rolling Business as computed by the PAV Auditor, the parties will agree on a third independent auditor to calculate the EBITDA of the Rolling Business. In such case the third auditor's calculation of the EBITDA of the Rolling Business shall be used to calculate the Fee. Century and PAV shall each pay all costs incurred by their respective auditors and shall each pay one-half of the costs incurred by the third auditor. (e) PAV shall, upon presentation of proper documentation with respect to any Consultant, pay Century on a current basis (or pay at Century's direction to the applicable Consultant) all reasonable business expenses incurred by the Consultants in performing their services hereunder, in accordance with Century's reimbursement policies generally applicable to senior executive employees including, but not limited to, expenses for travel and accommodations. (f) It is expressly understood between the parties that Century and the Consultants shall be independent contractors and not engaged as employees of PAV. It is also expressly agreed that Century shall be solely responsible for the withholding and payment of any and all taxes and other sums required to be withheld or paid by an employer pursuant to any and all laws applicable to the rendering of services by the Consultants hereunder. 5. Termination of this Agreement. (a) This Agreement or the services of any Consultant may be terminated by PAV at any time or by Century for any reason after Period 1 without penalty. In the event of the termination of this Agreement by PAV other than as a result of circumstances described in Section 5(b) or 5 (c) below, PAV shall (i) promptly pay all accumulated Costs hereunder for services performed prior to the date of termination, together with business expenses pursuant to Section 4(e), upon submission by Century to PAV of a detailed invoice showing the hours expended and the amount owed and (ii) shall pay to Century the Fee. (b) In the event that (i) this Agreement is terminated by Century on or before December 31, 2000 or (ii) on or before December 31, 2000, Gerald A. Meyers or his successor, and any one of the other Consultants or their successors are not available or materially fail to provide services hereunder, even if such failure is consonant with their responsibilities to Century, PAV may terminate this Agreement, and in either case, PAV shall promptly pay all accumulated Costs and expenses hereunder for services performed prior to the Termination date, upon submission by Century to PAV of a detailed invoice showing the hours expended and the amount owed and no other Fee shall be payable. (c) If the conditions or circumstances set forth in Section 5(b) occur after December 31, 2000, PAV shall promptly pay all accumulated Costs and expenses hereunder for services performed prior to the Termination date, upon submission by Century to PAV of a detailed invoice showing the hours expended and the amount owed and shall pay to Century a pro-rata portion of the Fee, which shall be determined by multiplying the total Fee by a fraction, the numerator of which is the number of days between the Effective Date and the Termination Date during which period Consultants were to have been available for consulting, pursuant to Annex B, or actually consulted, whichever is greater, and denominator of which is the total -3- 4 number of days Consultants were to have been available pursuant to Annex B for all periods shown on the schedule, provided, that in no event shall such fraction exceed one. (d) The Fees shall be paid as provided in Section 4(d). 6. Termination of Consultants. In the event of the termination of the services of any of the Consultants by PAV for any reason, PAV shall have no obligation for the payment of any Costs applicable to such Consultant after the date of such termination, and Costs allocable to services rendered by such Consultant prior to the date of termination shall be paid after the close of the relevant Period as described in Section 4(c) above. In the event any Consultant shall no longer be able to perform services hereunder for any reason, Century shall designate a substitute reasonably acceptable to PAV to perform services hereunder in substitution for the terminated Consultant. In the event PAV shall so approve a successor which Century has designated, Century agrees to provide the services of the successor Consultant on the same basis as the services of the predecessor, and as though the successor were named on Annex A in place of the predecessor, unless the parties otherwise agree. 7. Conflict of Interest and Insurance. (a) PAV hereby expressly and prospectively waives all claims of any conflict of interest that may arise in connection with the Consultants' performance of their services under this Agreement. (b) PAV shall arrange that the Consultants, while they are physically present on the premises owned by PAV, shall be covered for their activities hereunder under policies of liability insurance maintained by PAV on the same basis as officers and directors of PAV are covered. 8. Miscellaneous. (a) Any notice required or permitted under this Agreement shall be given in writing and shall be deemed to have been effectively made or given if personally delivered, or if mailed or faxed to the other party at its address and fax number set forth below in this Section 8(a), or at such other address or fax number as such party may designate by written notice to the other party hereto: if to PAV: Pechiney Rolled Products LLC 8770 West Bryn Mawr Avenue Chicago, IL 60631-3542 Fax: (773) 399-3527 Attention: Eileen Burns Lerum with a copy to: Shearman & Sterling 599 Lexington Avenue New York, NY 10022 Fax: (212) 848-7179 Attention: David W. Heleniak, Esq. Alfred J. Ross, Jr., Esq. -4- 5 if to Century: Century Aluminum Company 2511 Garden Road Building A, Suite 200 Monterey, CA 93940 Fax: (831) 642-9328 Attention: General Counsel (b) This Agreement shall be binding upon and inure to the benefit of, and shall be enforceable by Century and PAV; provided, however, that this Agreement shall not be assignable by either Century or PAV, and Century may not substitute any Consultant hereunder without the written consent of PAV, and such consent shall not be unreasonably withheld. (c) This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and may not be amended or modified except by an instrument in writing signed by PAV and Century. Waiver of any term or condition of this Agreement shall only be effective if in writing and shall not be construed as a waiver of any subsequent breach or waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. (d) This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts executed in and to be performed in that State. (e) This Agreement may be executed in one or more counterparts, and by the parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. 9. Dispute Resolution. (a) In the event that any dispute, claim or controversy shall arise as to whether either party hereto shall have fulfilled its respective obligations under this Agreement, the parties agree that within five (5) days after notification thereof authorized representatives of the parties shall meet to resolve such dispute, claim or controversy. If, within ten (10) days after the authorized representatives first began such meetings the parties have not agreed to a resolution, a PAV representative and a Century representative (other than, in the case of each party, the aforementioned authorized representatives) shall meet within five (5) days to resolve such dispute, claim or controversy. If, within ten (10) days after such designated representatives first began such meetings, the parties have not reached agreement, the dispute, laim or controversy shall be determined in the manner set forth in Section 9 (b) hereof. (b) If, within five (5) business days after the date referred to in the last sentence of Section 9 (a) hereof the dispute, claim or controversy in question remains unresolved, such dispute, claim or controversy shall be finally resolved by arbitration in New York City pursuant to the Rules of Conciliation and Arbitration of the International Chamber of Commerce, and any award rendered by an arbitral panel in accordance therewith shall be final and binding on the parties and nonappealable. By execution of this Agreement each of the parties consents to the jurisdiction of such arbitral panel for itself and in respect of its properties. Any costs of the proceedings described in this Section 9 (b) shall be borne by the parties equally. -5- 6 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. CENTURY ALUMINUM COMPANY By: /s/ Gerald J. Kitchen ----------------------- Name: Gerald J. Kitchen Title: Executive Vice President PECHINEY ROLLED PRODUCTS LLC By: /s/ J.M. Schemm ----------------------- Name: J.M. Schemm Title: Vice President -6- EX-2.3 4 MOLTEN ALUMINUM PURCHASE AGREEMENT 1 EXHIBIT 2.3 CENTURY ALUMINUM 8-K MOLTEN ALUMINUM PURCHASE AGREEMENT THIS MOLTEN ALUMINUM PURCHASE AGREEMENT (this "AGREEMENT") is entered into as of September 20, 1999 ("EFFECTIVE DATE"), by and between CENTURY ALUMINUM OF WEST VIRGINIA, INC., a Delaware corporation ("SELLER"), and PECHINEY ROLLED PRODUCTS, LLC, a Delaware limited liability company ("BUYER"). RECITALS A. Seller has sold to Buyer the assets consisting of an aluminum rolling mill (the "ROLLING MILL") and cast house (the "CAST HOUSE") located in Ravenswood, West Virginia (the Rolling Mill and the Cast House together being the "FABRICATION PLANT"). B. Seller produces molten primary aluminum at the aluminum reduction plant located adjacent to the Fabrication Plant in Ravenswood, West Virginia (the "REDUCTION PLANT"). C. Seller wishes to sell to Buyer and Buyer wishes to purchase from Seller certain quantities of Molten Aluminum (as hereinafter defined) produced at the Reduction Plant. NOW, THEREFORE, the Parties, intending to be legally bound by this Agreement, agree as follows: 1. DEFINITIONS. 1.1. DEFINED TERMS. For purposes of this Agreement each of the following terms shall have the meaning specified below and may be used in the plural or singular form. "AFFILIATE" of any person or entity shall mean any other person or entity directly or indirectly controlling, controlled by, or under common control with, such person or entity, whether through the ownership of voting securities, by contract or otherwise. For purposes of this definition, "control" (including with correlative meanings, the terms "controlling", 2 "controlled by", and "under common control with") as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that person or entity. "ANNUAL FORECAST" shall have the meaning set forth in Section 2.2. "APPLICABLE LAWS" shall mean any or all of the following to the extent applicable in the context: (i) federal, state, county and municipal or other local laws, codes, rules and regulations; (ii) judgments, decrees, writs and injunctions of any court, arbitration panel, arbitrator or Regulatory Authority; and (iii) orders, licenses, permits, directives or other actions of any Regulatory Authority. "BANKRUPTCY LAWS" shall have the meaning specified in Section 12.2. "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day on which banking institutions in New York City are required or permitted by law to close. "CAST HOUSE" shall have the meaning set forth in Recital A hereof. "CASTING CHARGE" shall have the meaning set forth in Section 8.2 "CENTURY INDEMNITEES" shall have the meaning set forth in Section 15.7. "DELIVERY POINT" shall have the meaning set forth in Section 3.1. "DOLLARS" and "$" shall mean the legal currency of the United States of America. "EXCESS METAL" shall have the meaning set forth in Section 8.1. "FABRICATION PLANT" shall have the meaning set forth in Recital A hereof. "FACILITY" shall mean the Reduction Plant and the Fabrication Plant. -2- 3 "FORCE MAJEURE" shall have the meaning specified in Section 13.1. "FORCE MAJEURE PARTY" shall have the meaning specified in Section 13.2. "HIGH IRON ALUMINUM" shall mean unalloyed molten primary aluminum metal having an iron content greater than 0.50% but a monthly average iron content of 1% or less and otherwise meeting the Molten Aluminum Specifications. "LIEN" shall mean any mortgage, pledge, lien, charge, encumbrance, lease, security interest or claim. "MAXIMUM QUANTITY" shall have the meaning set forth in Section 2.1. "MINIMUM QUANTITY" shall have the meaning set forth in Section 2.1. "MOLTEN ALUMINUM" shall mean unalloyed molten primary aluminum metal conforming to the Molten Aluminum Specifications. "MOLTEN ALUMINUM PRICE" shall have the meaning set forth in Section 6(a). "MOLTEN ALUMINUM SPECIFICATIONS" shall mean the specifications set forth in Section 1 of Exhibit C hereto. "MONTH" shall mean a calendar month. "MONTHLY DECLARATION" shall have the meaning set forth in Section 2.3. "MONTHLY QUANTITY" shall mean the quantity of Molten Aluminum to be delivered during a Month, as specified in the Monthly Declaration delivered with respect to such Month in accordance with Section 2.3. "NON-TERMINATING PARTY" shall have the meaning set forth in Section 12.2. "NOTICES" shall have the meaning specified in Section 15.10. -3- 4 "P4050" shall mean unalloyed primary molten aluminum metal with an iron content greater than 0.30% but less than 0.50% and with silicon content not greater than 0.40%, and otherwise meeting the Molten Aluminum Specifications. "PECHINEY INDEMNITEES" shall have the meaning set forth in Section 15.6. "POUND" shall mean a unit of weight equal to sixteen ounces avoirdupois. "POWER CONTRACT" shall mean Seller's existing contract for the supply of electric power, dated July 1, 1996, between Seller and American Electric Power (f.k.a. OPC Power Company) which expires on July 31, 2003. "QUALITY SHORTFALL" shall have the meaning set forth in Section 3.2(b). "QUARTERLY FORECAST" shall have the meaning set forth in Section 2.2. "RECEIVING PARTY" shall have the meaning specified in Section 13.2. "REDUCTION PLANT" shall have the meaning set forth in Recital B hereof. "REGULATORY AUTHORITY" shall mean any federal, state, municipal, local or other governmental department, commission, board, agency, taxing authority, possession, territory or instrumentality. "ROLLING MILL" shall have the meaning set forth in Recital A hereof. "SOW" shall mean unalloyed primary aluminum metal in sow form conforming to the Sow Specifications. "SOW DELIVERY POINT" shall have the meaning set forth in Section 8.4. "SOW SPECIFICATIONS" shall have the meaning set forth in Exhibit D. "TAC" or "TAC SYSTEM" shall mean the patented equipment designed for treatment of molten primary aluminum in crucible. "TERMINATING PARTY" shall have the meaning specified in Section 12.2. -4- 5 1.2. GENERAL PROVISIONS. In this Agreement, unless the context otherwise requires: 1.2.1. References to a Section, Schedule or Exhibit not otherwise identified in this Agreement shall be construed as references to that specified Section of, or that Exhibit or Schedule to, this Agreement. 1.2.2. References to a document (including this Agreement), or to any particular provision of a document, shall be construed as references to that document or provision as amended or supplemented from time to time. 2. SALE AND PURCHASE; FORECASTS. 2.1. OBLIGATION TO PURCHASE AND SELL. Subject to the provisions of this Section 2 and, to the extent applicable, Section 12.1, Buyer shall purchase from Seller and Seller shall sell to Buyer a minimum of [Confidential Information filed separately with the SEC] Pounds of Molten Aluminum per Month ("MINIMUM QUANTITY") and a maximum of [Confidential Information filed separately with the SEC] Pounds of Molten Aluminum per Month ("MAXIMUM QUANTITY"). Seller shall make deliveries of the Monthly Quantity for each Month in approximately even daily amounts. It is understood that the Minimum Quantity and the Maximum Quantity as stated above have been fixed on the basis of a Month consisting of thirty (30) days and that such amounts are to be adjusted pro rata in respect of any Month consisting of more or fewer days. 2.2. ANNUAL AND QUARTERLY FORECASTS. Between October 1 and October 15th of each calendar year, Buyer shall deliver to Seller a non-binding, good faith written forecast of Buyer's requirements for Molten Aluminum at the Fabrication Plant during each Month of the immediately following calendar year (the "ANNUAL FORECAST"). No later than forty-five (45) -5- 6 days prior to the first day of each calendar quarter, Buyer shall deliver to Seller a revised forecast of Buyer's requirements for Molten Aluminum (the "QUARTERLY FORECAST") for each Month of such calendar quarter. The quantity forecast for each Month in the Quarterly Forecast shall not be less than the Minimum Quantity or more than the Maximum Quantity. 2.3. MONTHLY DECLARATION. Within the last five (5) days of each Month, Buyer shall deliver to Seller in writing a declaration (the "MONTHLY DECLARATION") of the quantity of Molten Aluminum which it will purchase from Seller during the Month beginning on the first day of the second Month immediately following the Month in which the Monthly Declaration is required to be delivered. (Example: the Monthly Declaration delivered within the last five (5) days of December will fix the quantity for the following February.) The quantity fixed in a Monthly Declaration shall not (i) vary by more than two percent (2%) from the quantity forecast for such Month in the Quarterly Forecast, or (ii) be less than the Minimum Quantity or more than the Maximum Quantity. Once delivered to Seller, each Monthly Declaration shall be final and binding upon the parties as to the quantities specified therein for the applicable Month. 2.4. INITIAL FORECASTS. The Monthly Declarations for the Months of September and October, 1999 are attached as Exhibit A hereto. The Quarterly Forecast for the calendar quarter ending December 31, 1999 is attached as Exhibit B hereto. 3. DELIVERY. 3.1. QUANTITY MAKEUP. (a) If at the end of a Month Buyer shall determine that Seller has failed to deliver to Buyer the Monthly Quantity required to be delivered for such Month, Buyer shall so notify Seller within five (5) Business Days following the end of such Month, by notice ("BUYER'S NOTICE") given in writing to the Reduction Plant manager, with a copy to Seller, and, within twenty-four (24) hours of receipt of Buyer's Notice, Seller shall give -6- 7 notice ("SELLER'S NOTICE") in writing to the Fabrication Plant manager, with a copy to Buyer, as to whether or not Seller shall remedy such shortfall by delivering Sows cast for Seller pursuant to Section 8. Buyer's Notice hereunder shall specify the amount by which the Molten Aluminum delivered by Buyer during the relevant Month is less than the Monthly Quantity for such Month. If Seller shall so elect, Seller shall deliver Sows from Seller's inventory, sufficient on a Pound for Pound basis to remedy such shortfall, within five (5) days of delivery of Seller's Notice. (b) To the extent that (i) Seller shall not elect to remedy a quantity shortfall by delivery of Sows pursuant to Section 3.1(a) above or shall have failed to deliver Seller's Notice as specified therein, and (ii) the total quantity of Molten Aluminum and/or Sows delivered by Seller to Buyer during such Month is less than ninety-eight percent (98%) in amount of the Monthly Quantity for such Month, then Seller shall indemnify Buyer in an amount equal to the product of (x) [Confidential Information filed separately with the SEC] and (y) the amount in Pounds by which the total quantity of Molten Aluminum and/or Sows delivered by Seller to Buyer during such Month is less than the Monthly Quantity for such Month. Such indemnity shall be payable irrespective of any amounts of molten or solid aluminum effectively purchased by Buyer from third parties to compensate for such shortfall. The indemnity payable hereunder shall be deducted from the amount that is to be paid by Buyer to Seller with respect to the relevant Month, as provided in Section 7.2 (or, in the event that the amount payable by Seller to Buyer shall be in excess of the amount payable by Buyer to Seller with respect to such Month, then Seller shall pay to Buyer the balance thereof not later than the fifteenth (15th) day of the Month immediately following the Month in which the quantity shortfall occurred). 3.2. SELLER'S INDEMNITY FOR QUALITY SHORTFALL. (a) If, at any time during a Month or to the extent practicable within one (1) day, but in no event more than three (3) Business -7- 8 Days, following the end of such Month, Buyer determines that molten primary aluminum delivered by Seller to Buyer during such Month will not meet or has not met the Molten Aluminum Specifications, and such failure to meet the Molten Aluminum Specifications will result or has resulted in a Quality Shortfall (as hereinafter defined), then Buyer shall so notify Seller promptly upon such determination and, to the extent practicable within one (1) day, but in no event more than three (3) Business Days, following the end of such Month, by notice ("BUYER'S QUALITY SHORTFALL NOTICE") given in writing to the Reduction Plant manager, with a copy to Seller. Within twenty-four (24) hours of receipt of Buyer's Quality Shortfall Notice, Seller and Buyer shall confer, in good faith, to determine the least cost solution to remedy such Quality Shortfall. In the event that Seller and Buyer shall so agree on such least cost solution, then such solution shall be utilized to remedy the Quality Shortfall and Seller shall indemnify Buyer for the cost thereof, provided that in no event shall such cost be in excess of the Shortfall Penalty which would otherwise be payable in respect of such Quality Shortfall. In the event that Seller and Buyer shall fail to agree on such least cost solution within such twenty-four (24) hour period, then no later than five (5) days following receipt of Buyer's Quality Shortfall Notice, Seller shall give notice ("SELLER'S QUALITY SHORTFALL NOTICE") to Buyer in writing as to whether it shall (i) compensate for such Quality Shortfall by delivery of Sows or (ii) pay the Shortfall Penalty, as determined in accordance with Section 3.2(b) below. The amount payable by Seller to Buyer with respect to the least cost solution utilized to remedy a Quality Shortfall or for a Shortfall Penalty, as the case may be, shall be deducted from the amount that is to be paid by Buyer to Seller with respect to the relevant Month, as provided in Section 7.2 (or, in the event that the amount payable by Seller to Buyer shall be in excess of the amount payable by Buyer to Seller with respect to such Month, then Seller shall pay to Buyer the balance thereof not later -8- 9 than the fifteenth (15th) day of the Month immediately following the Month in which the Quality Shortfall occurred). (b) To the extent that a Quality Shortfall is not remedied by utilization of the least cost solution determined by Seller and Buyer as specified in Section 3.2(a) or by delivery of Sows, Seller shall indemnify Buyer in an amount equal to the product of (x) [Confidential Information filed separately with the SEC] and (y) the amount of the remaining Quality Shortfall, in Pounds (the "SHORTFALL PENALTY"). (c) For purposes of this Section 3.2, a "QUALITY SHORTFALL" shall mean the quantity expressed in Pounds by which the amount of Molten Aluminum delivered by Seller to Buyer during such Month is less than the Monthly Quantity with respect to such Month by virtue of the delivery by Seller to Buyer of molten primary aluminum which failed to meet the Molten Aluminum Specifications. For purposes of calculation of a Shortfall Penalty in accordance with Section 3.2(b), the Quality Shortfall for the relevant Month shall not include any amounts of molten primary aluminum not conforming to the Molten Aluminum Specifications which were delivered by Seller during such Month and are retained by Buyer and not cast by Buyer, other than for reason of lack of available capacity, for the account of Seller and delivered to Seller in accordance with Sections 3.3 and 8.4 hereof. 3.3. SHORTFALL TO BE CAST. Subject to Buyer's available capacity to cast as provided in Section 8.1, Buyer shall cast for the account of Seller all molten primary aluminum not conforming to the Molten Aluminum Specifications which is delivered to Buyer by Seller during any Month. 3.4. REMEDIES EXCLUSIVE. Notwithstanding anything to the contrary set forth in this Agreement, during the term of this Agreement, the remedies for a quantity shortfall and a -9- 10 Quality Shortfall set forth in Sections 3.1 and 3.2, respectively, shall constitute Buyer's exclusive remedies therefor. 3.5. TITLE AND RISK OF LOSS. Seller shall deliver Molten Aluminum to Buyer hereunder in crucibles at the scale in the hot metal tunnel between the Reduction Plant and the Cast House (the "DELIVERY POINT"). Title and risk of loss to Molten Aluminum other than Excess Metal, (provided that the parties acknowledge that the Molten Aluminum and Excess Metal shall be commingled and Seller shall not remove any Excess Metal from the commingled inventory until it has been identified as Excess Metal) shall pass to Buyer at the Delivery Point. Deliveries shall be made from time to time as Molten Aluminum is tapped by Seller accordance with Seller's normal practices. If Seller substitutes Sows for Molten Aluminum pursuant to Section 2.5, the delivery of such Sows shall be at such location at the Facility as Seller and Buyer shall agree. Employees of Century WV shall retain control of the physical delivery of the Molten Aluminum beyond the Delivery Point into the Cast House. Neither Century WV nor any of such employees shall have any liability to Pechiney with respect to such activities, except to the extent that any damage to the property of Pechiney (including the Molten Aluminum) which may arise therefrom shall be caused by the gross negligence, recklessness or willful misconduct of any of such employees; provided that, without limiting the foregoing, repeated violations by employees of Century WV of procedures in place on the date hereof that have been notified to Century WV in writing by Pechiney shall be deemed gross negligence. 3.6. TAC. As soon as practical and in any event within twenty (20) Months following the Effective Date, Seller shall install a TAC System or comparable equipment, and associated up-to-date skimming equipment, for use in the production of all molten primary -10- 11 aluminum. Such equipment shall be installed on Seller's property. The TAC System shall be operated by Seller. 3.7. OPERATION OF EQUIPMENT; DROSS. Until such time as Seller shall have installed a TAC System, upon delivery of Molten Aluminum Buyer shall skim bath and dross from each crucible and promptly return such bath and dross to Seller. Following installation of a TAC System, Seller shall operate the TAC System and skim bath and dross, prior to delivery of the Molten Aluminum. Bath and dross skimmed from each crucible shall at all times be and remain the exclusive property of Seller. Following installation of a TAC System, Buyer may sample and test the Molten Aluminum in accordance with Section 5.2 during the operation of the TAC System. Remaining bath and dross content shall be determined as specified in Exhibit C. The percentage of remaining bath and dross ("PCT") shall be deducted for invoicing purposes in accordance with Section 7.1. 4. MOLTEN ALUMINUM WEIGHT. The weight of Molten Aluminum delivered to Buyer hereunder shall be determined by Buyer using the scale in the hot metal tunnel at the Delivery Point. Not less frequently than monthly, Buyer will ensure that the scale is certified as a commercial scale in accordance with customary industry standards by an independent contractor mutually acceptable to Buyer and Seller, and Buyer will promptly furnish Seller with the resulting certifications and test results. 5. MOLTEN ALUMINUM QUALITY. 5.1. SPECIFICATIONS. Seller warrants that all Molten Aluminum sold to Buyer hereunder shall meet the Molten Aluminum Specifications, and all Sows delivered to Buyer pursuant to Section 3.1(a) or 3.2(a) shall meet the Sow Specifications, in each case as such -11- 12 specifications may be adjusted or revised from time to time by written agreement of the parties. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 5, SELLER MAKES NO REPRESENTATION OR WARRANTY AS TO THE MOLTEN ALUMINUM OR SOWS TO BE SOLD BY SELLER TO BUYER HEREUNDER, AND SELLER HEREBY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY, USAGE OR FITNESS FOR ANY PARTICULAR PURPOSE. 5.2. SAMPLING. Buyer shall sample and test the Molten Aluminum contained in each crucible delivered by Seller hereunder using a method mutually acceptable to the parties, and shall furnish the test results to Seller on a daily basis. Buyer shall label and retain all samples taken for a period of no less than thirty (30) days after delivery. 5.3. UMPIRES. If Buyer determines in accordance with Section 5.2 that molten primary aluminum delivered by Seller does not conform to the Molten Aluminum Specifications, or determines that sows delivered by Seller pursuant to Section 3 do not conform to the Sow Specifications, Buyer shall, no later than two (2) Business Days after delivery of the relevant molten primary aluminum or sows, deliver written notice of such failure to the Reduction Plant manager, with a copy to Seller, describing the failure in reasonable detail. If Seller disagrees with Buyer's determination that the molten primary aluminum or sows do not meet the Molten Aluminum Specifications or Sow Specifications, as the case may be, Seller shall have the right, exercisable by written notice delivered to Buyer within five (5) Business Days after receipt of Buyer's notice, to require an analysis of the relevant samples retained as provided for in Section 5.2 by an independent umpire (applying, for purposes of rounding off, the principles set forth in the "Standard Practice for Using Digits in Test Data to Determine Conformance with Specifications" of ASTME 29), mutually acceptable to the parties, whose determination shall be -12- 13 final and binding upon the parties. Without prejudice to any other remedies of Buyer or Seller hereunder, if the molten primary aluminum or sows, as the case may be, are found by the independent umpire to be not within the Molten Aluminum Specifications or the Sow Specifications, as the case may be, then Seller shall pay for the costs of the umpire's analysis and the non-conforming quantity shall be excluded for purposes of determining compliance with the Monthly Quantity, and if the molten primary aluminum or sows, as the case may be are found to be within the Molten Aluminum Specifications or the Sow Specifications, as the case may be, then Buyer shall pay for the costs of the umpire's analysis and the conforming quantity shall be taken into account in determining compliance with the Monthly Quantity. 5.4. LIENS. Seller warrants that all Molten Aluminum and all Sows sold to Buyer hereunder shall be free from any lawful security interest or lien thereon. 6. PRICE. (a) The price for each Pound of Molten Aluminum sold by Seller to Buyer hereunder shall be the [Confidential Information filed separately with the SEC] price expressed in cents per Pound for P1020 aluminum as reported for the Month immediately preceding the Month of delivery by [Confidential Information filed separately with the SEC] ("MOLTEN ALUMINUM PRICE"), such Molten Aluminum Price being net of sales taxes (if any) payable with respect to such sale. The price may be subject to further adjustment as provided in Exhibit C hereto. The price for each Pound of Sows delivered by Seller to Buyer pursuant to Section 3.1(a) or 3.2(a) shall be the Molten Aluminum Price, [Confidential Information filed separately with the SEC] per Pound. If [Confidential Information filed separately with the SEC] ceases reporting the [Confidential Information filed separately with the SEC] price, Buyer and Seller will in good faith seek to determine a substitute publication or reference that most nearly -13- 14 approximates the price data reflected in [Confidential Information filed separately with the SEC]. Failing agreement within three (3) days after the date on which [Confidential Information filed separately with the SEC] ceased reporting, Buyer and Seller will within three (3) additional days each designate an independent expert and such independent experts will in good faith seek to determine such a substitute publication or reference. If such independent experts are unable to agree on such a substitute publication or reference within ten (10) Business Days, the determination of a substitute publication or reference price will be made by an arbitral panel appointed pursuant to the procedures set forth in Section 15.3(b), in which case the arbitrators appointed pursuant to such Section will be instructed to render their decision no later than four (4) months from the date on which the arbitration procedure was initiated. During any period in which no published price or other reference price has been agreed or determined, the interim price for each Pound of Molten Aluminum sold by Seller to Buyer hereunder shall be the sum of: (i) the average per Pound in Dollars of the [Confidential Information filed separately with the SEC] price for P1020 aluminum as published on [Confidential Information filed separately with the SEC] for the Month prior to the Month of delivery plus (ii) the amount per Pound in Dollars by which the last average [Confidential Information filed separately with the SEC] price per Pound used as a basis for pricing by the parties hereunder exceeded the average per Pound in Dollars of the [Confidential Information filed separately with the SEC] Price for the Month used to determine the last average [Confidential Information filed separately with the SEC] price per Pound less (iii) [Confidential Information filed separately with the SEC] per Pound. When the parties have agreed upon a substitute reference price or such price has been determined by independent experts or pursuant to Section 15.3, the parties will promptly make appropriate -14- 15 adjustments and payments in respect of Molten Aluminum for which an interim price applied pursuant to the immediately preceding sentence. (b) Notwithstanding the foregoing, the price for the specified quantities of Molten Aluminum scheduled to be produced by Seller during the Months specified on Exhibit A hereto shall be as set forth on such Exhibit. 7. INVOICING AND PAYMENT. 7.1. INVOICING. Invoicing for Molten Aluminum sold hereunder during each Month shall be made according to the following formula: (i) Molten Aluminum weight determined as per Section 4 of this Agreement ("W") multiplied by (x) one (1) minus (-) Pct as per Section 3.7 of this Agreement multiplied by (x) the Molten Aluminum Price ("P"). Such formula can be summarized as follows: W x (1-Pct) x P minus (ii) Casting Charge as defined in Section 8.2 for molten primary aluminum cast in sow form (Sows and/or sows not conforming to the Sow Specifications): the Casting Charge shall be equal to the weight of cast aluminum in sow form (Sows and/or sows not conforming to the Sow Specifications) multiplied by (x) [Confidential Information filed separately with the SEC]. 7.2. PAYMENT. Payment for all Molten Aluminum sold hereunder during each Month (including Sows substituted by Seller pursuant to Section 3.1(a) and 3.2(a)) shall be due -15- 16 from Buyer to Seller not later than the fifteenth (15th) day of the Month immediately following the Month of delivery. Payment shall be made by wire transfer of immediately available Dollars to such bank account as Seller may designate from time to time by written notice to Buyer no later than five (5) Business Days prior to the applicable payment date. 8. EXCESS MOLTEN ALUMINUM. 8.1. BUYER'S OBLIGATION TO CAST. Unless Seller, in its sole discretion, chooses to develop its own casting capability, all Molten Aluminum in excess of the quantities purchased by Buyer hereunder and all other molten primary aluminum not conforming to the Molten Aluminum Specifications produced by Seller at the Reduction Plant during the term of the Agreement ("EXCESS METAL") shall be cast by Buyer into Sows or sows and delivered to Seller. Notwithstanding the foregoing and the obligations of Buyer under Section 9, whether or not Buyer exercises its option to reduce the quantities to be purchased hereunder in accordance with the provisions of Section 12.1, Buyer's obligation to cast Excess Metal into Sows and/or other sows for Seller shall be limited to the extent of Buyer's available capacity to cast such Sows and/or other sows at the Cast House at the time Seller produces the applicable molten primary aluminum; it being understood that (i) Buyer shall maintain the casting capacity existing as of the date hereof, and (ii) there shall be no obligation on Buyer to increase such casting capacity. Buyer shall not cast any form of primary aluminum at the Cast House for sale by Buyer to third parties unless Buyer has first cast all Excess Metal produced during such Month into Sows and/or other sows for the account of Seller. 8.2. CASTING CHARGE. Any Excess Metal cast by Buyer for Seller shall be subject to a casting charge (the "CASTING CHARGE"), payable by Seller to Buyer, of [Confidential Information filed separately with the SEC] of molten primary aluminum cast as Sows and/or -16- 17 other sows cast and delivered to Seller, such Casting Charge being net of sales taxes (if any) payable with respect to such activity. If the Casting Charge is not offset against amounts owed in respect of Molten Aluminum as provided in Section 7.1 for any reason whatsoever, then the Casting Charge for all Excess Metal cast for Seller during each Month which has not been so offset shall be paid by Seller to Buyer no later than fifteen (15) days after the end of such Month. Payment shall be made by wire transfer of immediately available Dollars to such bank account as Buyer may designate from time to time by written notice to Seller no later than five (5) Business Days prior to any payment date. 8.3. SOW WEIGHT. The weight of Sows and other sows cast for Seller from Excess Metal shall be determined by Buyer, in cold form, using the certified casting scale located in the M-1 bay in the Cast House or another commercially certified scale acceptable to the parties. Not less frequently than monthly, Buyer will ensure that such scale will be certified as a commercial scale in accordance with customary industry standards by an independent contractor mutually acceptable to Buyer and Seller, and Buyer will promptly furnish Seller with the resulting certifications and test results. 8.4. SOW DELIVERY. Unless otherwise agreed by the parties, all Sows and other sows cast by Buyer for the account of Seller during any Month shall be delivered to Seller to the extent practicable within one (1) day, and in no event more than five (5) days, after the end of such Month at the outside primary sow storage pad or such other delivery point as may be agreed from time to time (the "SOW DELIVERY POINT"). Buyer shall store such Sows and other sows at no charge to Seller, and Buyer shall exercise such care of Seller's Sows and other sows as Buyer would exercise if such Sows or other sows belonged to Buyer. All Sows and other sows stored for Seller hereunder shall be stored by Buyer as bailee, for the account of Seller, as bailor, and -17- 18 Buyer shall have no ownership rights or interests in such Sows or other sows. Buyer agrees to comply with all reasonable requests of Seller from time to time to evidence Seller's ownership of the Sows and/or other sows, including without limitation, (i) physical segregation of the Sows and/or other sows from Buyer's property, (ii) conspicuous marking or posting to reflect Seller's ownership, (iii) delivery of holding certificates, (iv) execution and delivery of UCC-1 financing statements to be filed for notice purposes, and (v) acknowledging Seller's ownership of such Sows and/or other sows in such documents and instruments as may from time to time be reasonably required by Seller. 8.5. LOADING AND REPORTING SERVICES. In further consideration for the Casting Charge, Buyer shall load Seller's Sows and/or other sows for shipment from the Facility in accordance with Seller's contracts for sale to its customers, prepare bills of lading and other shipping documents and furnish written reports to Seller in such detail and at such times as Buyer and Seller shall agree. Buyer shall maintain the Sow and other sow inventory records by grade employing Seller's existing metal grade system. Buyer shall continue Seller's existing practice of checking the weight of Sows and/or other sows by a second weighing on the main gate scales, and if the second weighing indicates a weight discrepancy of more than one percent (1%), Buyer shall reweigh any such Sows or other sows on the scale in the M-1 bay in the Cast House. The weight thus determined will be the basis for the weight shipped to Seller's customers and reported by Buyer to Seller's invoicing system. 9. CARE OF SELLER'S PROPERTY. The parties recognize that Buyer will have possession and use of Seller's property and equipment from time to time, including, without limitation, crucibles, sow molds, and other equipment. Buyer shall exercise such care of Seller's property and equipment as Buyer would -18- 19 exercise if such property and equipment belonged to Buyer. Buyer shall be liable to Seller for all repair and/or replacement costs for damage to Seller's property and equipment caused by acts or omissions of Buyer, including, without limitation, repair or replacement of crucibles damaged by freezing of Molten Aluminum contained therein. Buyer shall return all crucibles and other equipment to Seller in sufficient time so that production at the Reduction Plant is not delayed or interrupted due to lack of such equipment. Subject to Section 10, Buyer shall indemnify and reimburse Seller for any damages, expenses and liabilities arising from Buyer's failure to timely return any such property and equipment to Seller; provided, however that Buyer shall be relieved of any liability for such damages, expenses and liabilities to the extent these arise out of Seller's failure to perform any of its obligations hereunder. Each of Seller and Buyer shall, in accordance with good industry practices, maintain, repair and/or replace all equipment that may, from time to time, be in possession of the other party. 10. LIMITATION OF LIABILITY. Neither party shall be liable to the other for special, punitive or consequential damages (including but not limited to loss of profits and loss of production that could arise out of Buyer's actions under Section 9) resulting from breach of warranty, delay of performance or other default hereunder. 11. SETOFF. Either Buyer or Seller may setoff amounts then due to the other hereunder against amounts then due to it from the other hereunder. 12. TERM; TERMINATION. 12.1. TERM. The initial term of this Agreement shall commence on the Effective Date and shall continue in effect until July 31, 2003. If Seller determines, in its sole -19- 20 discretion, that it will not extend or replace the Power Contract, Seller may terminate this Agreement upon not less than twelve (12) months prior written notice to Buyer, provided that the termination date specified in such notice shall not be earlier than July 31, 2003. If Seller extends or replaces the Power Contract or otherwise obtains electrical power through alternative sources, this Agreement shall automatically be extended until the earlier of (A) the date of termination of the extended or replacement Power Contract (or the date on which the Reduction Plant will no longer be in operation for reason of lack of electricity supply) and (B) July 31, 2007. Buyer shall have the right, upon not less than twelve (12) months prior written notice to Seller, to reduce the Minimum Quantity and the Maximum Quantity by fifty percent (50%) each, for the then remaining term of this Agreement, provided that the effective date of reduction may not be earlier than July 31, 2003. If Buyer exercises its option to reduce the Minimum Quantity and Maximum Quantity, all other provisions of this Agreement shall remain in full force and effect. Notwithstanding the foregoing provisions of this Section 12.1, this Agreement may be terminated at any time pursuant to Section 12.2. 12.2. TERMINATION. Either Buyer or Seller (the "TERMINATING PARTY") may terminate this Agreement by notice to the other party or parties (the "NON-TERMINATING PARTY") after the occurrence of any of the following events: 12.2.1. A Non-Terminating Party in any material respect fails to perform or breaches any material provision of this Agreement on its part to be performed (other than any failure or breach excused under Section 13), and such failure or breach continues unremedied for a period of (i) in the case of an obligation to make payment, thirty (30) days, and (ii) in the case of any other material provision, ninety (90) days, after notice from the Terminating Party. Notwithstanding indemnity payments by Seller under Section 3.1(b) and Section 3.2(b), -20- 21 consistent material failure by Seller to comply with its obligations to deliver Molten Aluminum hereunder shall be deemed to be a breach by Seller under this Section 12.2.1. 12.2.2. A Non-Terminating Party: (i) consents to the appointment of a receiver, trustee or liquidator of itself or of a substantial part of its property, or admits in writing its inability to pay its debts generally as they become due, or makes a general assignment for the benefit of creditors; (ii) files a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization under any bankruptcy or insolvency law (as now or hereafter in effect) or any other now existing or future law providing for the reorganization or winding-up of corporations, or providing for an agreement, composition, extension or adjustment with its creditors (collectively, for purposes of this Section 12.2, "BANKRUPTCY LAWS"); or (iii) is a defendant in an action or proceeding under any bankruptcy law which action or proceeding is not withdrawn or dismissed within sixty (60) days after filing of the petition or other paper initiating such action or proceeding. 12.2.3. Any material provision of this Agreement shall at any time for any reason cease to be legal, valid and binding on or enforceable against a Non-Terminating Party, or shall be declared to be null and void, or the validity or enforceability thereof shall be contested by a Non-Terminating Party, or the Non-Terminating Party shall deny that it has any further liability or obligation under this Agreement; -21- 22 12.2.4. The Power Contract, or any extension thereof or replacement contract pursuant to which Seller purchases electrical power for use at the Reduction Plant, shall be terminated for any reason other than voluntary agreement of Seller or Seller's breach of such contract; 12.2.5. An event constituting Force Majeure which prevents the performance by a party (for purposes of this Section 12.2.5, a Force Majeure Party) of its obligations under this Agreement shall have continued for a continuous period in excess of six (6) consecutive months. 12.3. EFFECT OF TERMINATION. Termination of this Agreement for whatever reason shall not affect Seller's warranty obligations under Section 5, Buyer's warranty obligations under Section 8.4, the indemnification obligations under this Agreement, or any other duties of either party which by their nature are to be performed after termination of this Agreement or which were due to be performed or accrued as of the date of termination. Nothing in this Section 12.3 shall limit any remedies which are expressly provided to Buyer in this Agreement for any breach by Seller of any covenant or agreement herein. The parties hereby acknowledge and agree that, upon a termination of the Agreement by Buyer, as Terminating Party, pursuant to Section 12.2.1, 12.2.2 or 12.2.3, in the event of a failure by Seller to fulfill its obligations to deliver Molten Aluminum, Buyer shall be entitled to liquidated damages equal to the product of (x) [Confidential Information filed separately with the SEC] and (y) the Minimum Quantity, per Month, for each Month during the period commencing with the date of termination and expiring on (i) the date of termination of the initial term of this Agreement as set forth in the first sentence of Section 12.1 or (ii) if this Agreement has been extended as provided for in the third sentence of Section 12.1, the date to which the term is extended as so provided in such third sentence. -22- 23 13. FORCE MAJEURE. 13.1. FORCE MAJEURE EVENTS. Except to the extent caused by the negligence, recklessness or willful misconduct of the party asserting Force Majeure, the following shall constitute "FORCE MAJEURE" for purposes of this Agreement: (i) an act of God or the public enemy, fire, explosion, lightning, perils of the sea, flood, drought, war, riot, sabotage or embargo; (ii) interruption of or delay in transportation, interruption of electrical power supply (including due to exercise by the applicable power company of its contractual rights to interrupt power supply), inadequacy or shortage or failure of supply of raw materials, breakdowns of key equipment at the Reduction Plant or the Fabrication Plant, and labor disputes from whatever cause arising and whether or not the demands of the employees involved are reasonable and within the affected party's power to concede; (iii) compliance with any order, action, injunction, decree, law or regulation of any Regulatory Authority or with any other Applicable Laws; (iv) without limiting the foregoing, any circumstances of like or different character beyond the reasonable control of the affected party; or (v) a Force Majeure affecting the other party. 13.2. EFFECT OF FORCE MAJEURE. If a party is prevented from, or delayed in, performing any obligation on its part under this Agreement by reason of Force Majeure, the party -23- 24 so affected (the "FORCE MAJEURE PARTY"), upon prompt written notice to the other party (the "RECEIVING PARTY") shall be excused from making or taking such delivery to the extent and for the duration of the period that the same is prevented or delayed and, at the sole option of the Receiving Party exercised by notice to the Force Majeure Party, the total quantity of Molten Aluminum (or substitute Sows) to be sold and purchased hereunder or the total quantity of Sows to be converted by Buyer for Seller hereunder, as the case may be, at such time shall be reduced by the quantity so affected. If the Force Majeure affects the Fabrication Plant but not the Cast House, Buyer shall continue, to the extent reasonably feasible and subject to Buyer's available casting capacity, to cast molten primary aluminum for the account of Seller pursuant to Section 8.1. 13.3. NOTICE; EFFORTS TO REMEDY. If a party's performance is affected, or may be affected, by Force Majeure, that party shall give notice thereof to the other party as soon as practicable after the occurrence of such Force Majeure, which notice shall include, insofar as known, a statement of the probable extent to which the affected party will be unable to perform or will be delayed in performing its obligations hereunder. Each party shall exercise due diligence to eliminate or remedy any such Force Majeure and to prevent the same from unnecessarily delaying and interrupting its performance hereunder, and shall give the other party prompt written notice when such Force Majeure causes shall have been eliminated or remedied. 13.4. MONTHLY QUANTITY REDUCTION. Any quantity of primary aluminum purchased by Buyer from third parties as a substitute for Molten Aluminum and/or Sows not delivered by Seller during an event of Force Majeure shall be deducted from the relevant Monthly Quantity that otherwise would have been required to be delivered by Seller to Buyer during the period of a Force Majeure. -24- 25 14. ASSIGNMENT; MERGER. 14.1. ASSIGNMENT. Seller may assign this Agreement or any of its rights hereunder to one or more of its secured lenders as collateral. Either Buyer or Seller may assign this Agreement to any Affiliate of such party for so long as the assignee remains an Affiliate of such party and provided that such party shall remain liable for all obligations of the assignee hereunder. The parties agree that, (i) in the case of a direct or indirect sale of substantially all the assets of the Reduction Plant to a non-Affiliate of Seller, Seller shall assign all its rights and obligations hereunder to the purchaser of such assets and the purchaser shall assume all such rights and obligations and Seller shall have no further rights or obligations hereunder, and (ii) in the case of a direct or indirect sale of substantially all the assets of the Fabrication Plant to a non-Affiliate of Buyer, Buyer shall assign all of its rights and obligations hereunder to the purchaser of such assets and the purchaser shall assume all such rights and obligations and Buyer shall have no further rights or obligations hereunder. Except for the foregoing permitted assignments, neither party shall assign this Agreement or any of its rights hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld. 14.2. MERGER. In the event of a merger between either party hereto and a third party, the party hereto entering into such merger shall cause the surviving party (if other than the party hereto) of such merger to assume all the rights and obligations hereunder of the party hereto entering into such merger. 15. MISCELLANEOUS PROVISIONS. 15.1. ENTIRE AGREEMENT; AMENDMENT. This Agreement (including its Exhibits) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes any prior expressions of intent or understandings with respect to such -25- 26 subject matter. This Agreement may only be amended, modified, supplemented, released, discharged or abandoned by an instrument in writing signed by a duly authorized officer of each of the parties. 15.2. WAIVER. The failure or delay of either party to require performance by the other of any provisions of this Agreement shall not affect such party's right to require performance of that provision unless and until performance has been waived in writing. 15.3. GOVERNING LAW; DISPUTES. (a) This Agreement shall in all respects be governed by, and construed in accordance in accordance with, the laws of the State of New York without application of the principles of conflicts of laws of such state. (b) All disputes arising in connection with this Agreement shall be finally settled by arbitration under the Rules of Conciliation and Arbitration of the International Chamber of Commerceby a panel of three (3) arbitrators appointed in accordance with such rules, and any award or decision rendered by such arbitral panel shall be final and binding on the parties and nonappealable. The arbitration shall take place in New York, New York. The parties submit to the jurisdiction of any court in the United States having jurisdiction over a party or such party's assets for the purposes of granting interim or conservatory measures prior to the constitution of the arbitral tribunal in any dispute arising hereunder. After such consitution of the arbitral tribunal, applications for interim or conservatory measures must be made to the arbitral tribunal, to the exclusion of any court or other judicial authority. (c) Prior to submission to arbitration, Buyer and Seller shall first attempt to resolve any dispute hereunder informally at the lowest possible level of authority. If Buyer and Seller fail to promptly agree through such normal channels and procedures, then Buyer and -26- 27 Seller each shall designate an authorized representative from senior management who does not devote substantially all of his or her time to performance under this Agreement and whose task it will be to meet and negotiate in good faith for the purpose of resolving the dispute. If the authorized representatives of Buyer and Seller cannot resolve the dispute within twenty (20) days after the initial request to negotiate, either Buyer or Seller may require that the dispute be finally resolved by arbitration as provided above. 15.4. TAXES. Buyer shall bear all sales taxes (if any) on Molten Aluminum sold to Buyer hereunder (including Sows substituted by Seller pursuant to Section 3.1(a) or 3.2(a)) now imposed or hereafter becoming effective during the term of this Agreement. Seller shall bear all sales taxes (if any) in respect of casting work done for Seller by Buyer hereunder now imposed or hereafter becoming effective during the term of this Agreement. Each of Seller and Buyer shall accept from the other a West Virginia direct pay permit in lieu of collecting sales taxes from such other party. Neither Buyer nor Seller shall be liable for any other governmental taxes, duties, charges or imposts, including, without limiting the generality of the foregoing, any federal, state or local taxes on corporate income incurred by the other party with respect to payment from Buyer or Seller, as the case may be. 15.5. INDEPENDENT CONTRACTORS. Each party's duties and performance under this Agreement shall be those of an independent contractor, and nothing in this Agreement shall be deemed to make either party a partner, joint venturer or otherwise liable for the performance of the other party's obligations under this Agreement or otherwise. Without limiting the generality of the foregoing: 15.5.1. Subject to Section 13, each of the parties shall provide, at its own cost and risk, the requisite electrical power and materials, and all requisite labor, to (i) produce -27- 28 Molten Aluminum sold under this Agreement in the case of Seller, and (ii) to convert Molten Aluminum into Sows, in the case of Buyer; 15.5.2. Each party shall be solely responsible for its employee's compensation, benefits and well-being, and the functioning and maintenance of the Reduction Plant (in the case of Seller) and the Fabrication Plant (in the case of Buyer), in accordance with all Applicable Laws and any contractual arrangements which each party may have or hereafter enter into. Without limiting the foregoing, neither party shall have any responsibility for salaries or wages payable to employees of the other party or any withholding with respect to such salaries or wages, for any claims by employees of the other party for workers' compensation, for any acts or negligence of employees or agents of the other party, or for any acts or negligence of the other party (including, without limitation, disposal of all residue, slag, dross, bath and process by-products); and 15.5.3. Each party shall be exclusively responsible for, and hereby covenants that it will comply with, all Applicable Laws relating to its ownership or other interest in, or operation of, (i) the Fabrication Plant in the case of Buyer, and (ii) the Reduction Plant in the case of the Seller, including, without limitation, disposal of all residue, slag, dross, bath and process by-products by the applicable party. 15.6. INDEMNITY BY SELLER. Subject to the provisions of Section 5.1 and Section 10 hereof, Seller shall indemnify Buyer, its successors and assigns, and its shareholders, directors, officers, employees, agents and customers (collectively, the "PECHINEY INDEMNITEES"), against, and agrees to protect, save and keep harmless each Pechiney Indemnitee from, any and all liabilities, obligations, losses, damages, claims (including without limitation claims based on warranty, breach of contract, negligence or strict liability in tort), penalties, -28- 29 actions, suits, costs, expenses and disbursements (including without limitation legal fees and expenses) of whatsoever kind and nature, imposed on, incurred by or asserted against any Pechiney Indemnitee by any third party to the extent that any such third party claim relates to or arises out of a breach by Seller of its obligations under this Agreement. 15.7. INDEMNITY BY BUYER. Subject to Section 10 hereof, Buyer shall indemnify Seller, its successors and assigns and its shareholders, directors, officers, employees, agents and customers (collectively, the "CENTURY INDEMNITEES"), against, and agrees to protect, save and keep harmless each Century Indemnitee from, any and all liabilities, obligations, losses, damages, claims (including without limitation claims based on warranty, breach of contract, negligence or strict liability in tort), penalties, actions, suits, costs, expenses and disbursements (including without limitation legal fees and expenses) of whatsoever kind and nature, imposed on, incurred by or asserted against any Century Indemnitee by any third party to the extent that any such third party claim relates to or arises out of a breach by Buyer of its obligations under this Agreement. 15.8. PROCEDURES FOR INDEMNIFICATION. If any action, suit or proceeding shall be commenced against an indemnified party or parties by a third party, or any claim, demand or assessment shall be asserted against an indemnified party or parties by a third party, in each case resulting from or arising out of the circumstances described above, which may result in liability with respect to which the indemnified party or parties intends to seek indemnification pursuant to Sections 15.6 or 15.7, the party from whom indemnification is sought shall be notified as soon as practicable and shall have the right to assume the entire control of the conduct, defense, compromise and settlement thereof, at their own expense, including employment of counsel, and, in connection therewith, each indemnified party shall cooperate fully in such defense and make -29- 30 available to the indemnifying party (at the indemnifying party's own expense) all relevant information under its control; provided that nothing herein shall authorize an indemnifying party to assume the conduct, defense, compromise or settlement of any matter involving a criminal proceeding or to agree on behalf of any indemnified party to any non-monetary compromise or settlement 15.9. CONFIDENTIALITY. Except as required by Applicable Law, neither party shall use or disclose to others at any time, except as is necessary to its performance hereunder, any information regarding the other party's plans, programs, plants, process, products, prices, costs, equipment, operations, customers or the like. Each party shall restrict the knowledge of all such information to as few as possible of its employees and, upon request of the other party hereto, shall deliver to such other party secrecy agreements executed by such employees in form and substance reasonably satisfactory to such other party. 15.10. NOTICES. 15.10.1. Any and all notices, demands or other communications (collectively, "NOTICES") required or permitted to be given by either party to the other party under this Agreement shall be in writing and shall be delivered by hand to the recipient party at that party's address set forth below (other than (i) a Buyer's Notice pursuant to Section 3.1(a) or a Buyer's Quality Shortfall Notice pursuant to Section 3.2(a), which shall be delivered by hand or by telephonic facsimile transmission confirmed by telephone to Seller's Reduction Plant manager, or (ii) a Seller's Notice pursuant to Section 3.1(a) or a Seller's Quality Shortfall Notice pursuant to Section 3.2(a), which shall be delivered by hand or by telephonic facsimile transmission confirmed by telephone to Buyer's Fabrication Plant manager), or sent by postage prepaid certified mail (return receipt requested) or by telephonic facsimile transmission, to the -30- 31 recipient party's address or facsimile number set forth below, and shall be effective on the date the hand delivery or telephonic facsimile transmission is received by the other party or, in the case of a Notice by mail, five days after deposit in the mail. Any Notice given by telephonic facsimile transmission shall be confirmed by postage prepaid certified mail (return receipt requested). Notices shall be sent: If to Seller: Century Aluminum of West Virginia, Inc. 2511 Garden Road Building A, Suite 200 Monterey, CA 93940 Attention: President Facsimile No.: (831) 642-9082 with a copy to: Century Aluminum Company 2511 Garden Road Building A, Suite 200 Monterey, CA 93940 Attention: General Counsel Facsimile No.: (831) 642-9328 If to Buyer: Pechiney Rolled Products, LLC 8770 West Bryn Mawr Avenue Chicago, IL 60631-3542 Attention: Eileen Burns Lerum Facsimile No.: (773) 399-3527 with a copy to: Shearman & Sterling 599 Lexington Avenue New York, NY 10022 Attention: David W. Heleniak, Esq. Alfred J. Ross, Jr., Esq. Facsimile No.: (212) 848-7179 -31- 32 15.10.2. Any change in a party's address or telex or facsimile transmission number for the purposes of notice under this Section 15.10 shall be communicated to the other parties in the manner set forth in this Section 15.10 for providing notice. 15.11. ILLEGALITY; SEVERABILITY. 15.11.1. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Applicable Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. 15.11.2. If any provision of this Agreement is prohibited or unenforceable in any jurisdiction, any such prohibition or non-enforceability shall not by that fact alone render such provision invalid or unenforceable in any other jurisdiction. 15.11.3. To the extent permitted by Applicable Law, each of Seller and Buyer hereby waives any provisions of any Applicable Law which render any provision of this Agreement prohibited or unenforceable in any respect. 15.12. NO BROKERS. Each of Seller and Buyer warrants that neither it nor any of its Affiliates has engaged any broker or finder with respect to the transactions under this Agreement, and each agrees to indemnify the other against, and agrees to protect the other from, any and all liabilities, obligations, losses, damages, claims, penalties and disbursements -32- 33 (including without limitation legal fees and expenses) of whatsoever kind and nature arising out of any breach by the indemnifying party of the foregoing warranty or incurred by the other with respect to or resulting from any claims of any broker or finder engaged by the indemnifying party or any of its Affiliates. 15.13. HEADINGS. Headings used in this Agreement are for convenience of reference only, and shall not limit or otherwise affect the scope or interpretation of any provision. 15.14. COUNTERPARTS. This Agreement may be signed in any number of counterparts, and any single counterparts or a set of counterparts signed, in either case, by all the parties hereto shall constitute a full an original agreement for all purposes. -33- 34 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their duly authorized representatives as of the date first above written. CENTURY ALUMINUM OF WEST VIRGINIA, INC. By /s/ Gerald J. Kitchen -------------------------------------- Name: Gerald J. Kitchen ------------------------------------ Title: Vice President ----------------------------------- PECHINEY ROLLED PRODUCTS, LLC By /s/ Thomas Sliker -------------------------------------- Name: Thomas Sliker ------------------------------------ Title: Vice President and Treasurer ----------------------------------- 35 EXHIBIT A 1. SEPTEMBER MONTHLY DECLARATION (2.4) The Monthly Quantity for September 1999 has been fixed at [Confidential Information filed separately with the SEC] Lbs. 2. OCTOBER MONTHLY DECLARATION Notwithstanding the provisions of Section 2.3, Buyer shall deliver to Seller the October Monthly Declaration within 15 days after the Closing Date (as defined in the Stock and Asset Purchase Agreement dated as of July 26, 1999 among Century Aluminum Company, Seller and Buyer). 36 EXHIBIT B Notwithstanding the provisions of Section 2.2, Buyer shall deliver to Seller the Quarterly Forecast for the calendar quarter ending December 31, 1999 within 15 days after the Closing Date. 37 EXHIBIT C MOLTEN ALUMINUM SPECIFICATIONS 1. All Molten Aluminum sold by Seller to Buyer hereunder shall be unalloyed molten primary aluminum produced at the Reduction Plant, and having for each Month an average composition (such average for a Month shall be the weighted average of the analysis of each crucible delivered during the Month) in compliance with P1020A specifications as published by the Aluminum Association, subject to a Gallium content not in excess of 0.08% and a Vanadium content not in excess of 0.05%, and subject to the further provision below: Sodium - maximum Sodium daily average not more than 40 parts per million; provided, that before installation and operation of the TAC System or comparable equipment as stipulated in Section 3.6 of this Agreement, the acceptable maximum Sodium monthly average shall be 80 parts per million. 2. IRON CONTENT. (a) The quantity of High Iron Aluminum contained in the Molten Aluminum delivered hereunder in any Month shall not exceed 2% thereof. Buyer shall cast all High Iron Aluminum delivered in any Month in excess of the percentage specified above for the account of Buyer pursuant to Section 8.1. (b) The quantity of P4050 contained in the Molten Aluminum delivered hereunder in any Month shall not exceed 12% thereof. Buyer shall cast all P4050 delivered in any Month in excess of the percentage specified above for the account of Buyer pursuant to Section 8.1. The average composition of the Molten Aluminum delivered for each Month determined for purposes of Section 1 of this Exhibit C shall include the High Iron Aluminum and P4050 delivered during such Month up to the percentage thresholds set forth in subsections (a) and (b), respectively, of this Section 2. 3. CRUCIBLE DELIVERIES Temperature of Molten Aluminum delivered to the scales in the hot metal tunnel shall be equal to or greater than 900(Degrees)C. 38 The average weight of the crucibles calculated on a calendar week basis will be approximately 7,500 pounds, but may range as low as 5,000 pounds. In no event will a crucible be overfilled (closer than six inches to the top). It is understood that Molten Aluminum, even after skimming at the Cast House tunnel scale, may contain some drosses and electrolytic bath. In order to reduce Sodium and such content of drosses and electrolytic bath, Seller shall purchase, install and operate TAC System and associated skimming equipment as per Section 3.6 hereof. The remaining quantity of drosses and electrolytic bath will be determined every Month by difference of weight between the sows cast for Seller during the given Month and the molten primary aluminum used for this purpose and shall be expressed as a percentage of the molten primary aluminum ("Pct"). The Pct shall be used for the given Month as Pct in the invoicing formula as per Section 7.1(i) hereof. 4. QUALITY If Seller foresees any change in raw material (alumina, coke, pitch, cast iron, cryolite, bath) Seller will inform the Buyer by written notice as soon as practical, typically at least 30 days prior notice except in the case of emergencies, in which case Seller shall give notice as soon as practical in light of the emergency. In the case of a significant change, Seller and Buyer may agree to conduct a trial, processing a trial amount of material to ensure the material so changed will not result in molten primary aluminum or sows, as the case may be, not meeting the Molten Aluminum Specifications or Sow Specifications, as the case may be. If it is demonstrated by Buyer that the raw material change being evaluated causes a material adverse impact on its processing, despite the fact that the molten primary aluminum or sows, as the case may be, comply with the Molten Aluminum Specifications or the Sow Specifications, as the case may be, Seller will discontinue use of that raw material, provided reasonable alternatives exist. Seller will keep track of all significant process parameters for a period of five years. Seller will develop and keep an up-to-date quality survey plan, which will be discussed with Buyer. Buyer and Seller will put together a "customer/supplier" committee whose purposes will be to foster positive customer/supplier communications, provide an environment for continuous improvement in both areas, and who will perform process quality audits (to include reduction and sowing, and other related process steps). It is understood that such quality audits may be restricted from certain areas or items due to confidentiality issues. 5. WEEKLY AND MONTHLY REPORTS To monitor quality and to provide a basis for adjustments to the price according to the provisions of this Exhibit C, Buyer will prepare and deliver to Seller weekly and monthly reports showing: Quantity of Molten Aluminum delivered by Seller. Percentage of drosses and electrolytic bath in Molten Aluminum. Weekly average analysis of molten primary aluminum composition. Average composition of Molten Aluminum and basis for any rebates related to average composition. - -2- 39 Distribution of composition by grade, depicting percentage of purchased Molten Aluminum meeting the P4050 specifications and purchased Molten Aluminum with an iron content exceeding the P4050 specifications. - - Quantity of molten primary aluminum poured as sow. Quantity of Sows and sows poured - to be weighed on certified scales (such scales are currently available in the Cast House). Average analysis of Sows. Individual analysis of heats (one heat equals one crucible, which may produce up to five or six Sows). Distribution of trace elements by grade of Molten Aluminum (e.g. P1020A, P1020B, P1020C and P1020D) depicting the percentage of Molten Aluminum by grade and the basis for any castings of offgrade Molten Aluminum pursuant to this Exhibit C. Any other relevant information as may be agreed by the parties. 6. RELATED MATTERS Buyer and Seller agree to develop further procedures for the handling of Molten Aluminum, treatment of mobile equipment, Sow molds, crucibles, and other such procedures as may be necessary to operate efficiently and cooperatively under this Agreement. - -3- 40 EXHIBIT D SOW SPECIFICATIONS COMPOSITION SPECIFICATIONS: All Sows cast by Buyer for Seller in any Month hereunder shall be unalloyed primary aluminum having for each Month an average composition in compliance with P1020A specifications as published by the Aluminum Associations, subject to a Gallium content not in excess of 0.08% and a Vanadium content not in excess of 0.05% (the "SOW SPECIFICATIONS"), subject to the further provisions below. All sows (other than Sows) cast by Buyer for Seller shall be unalloyed primary aluminum having for each Month the same average specifications as the molten primary aluminum (other than Molten Aluminum) delivered by Seller to Buyer during such Month. WEIGHT AND SHAPE: Sows and sows weighing the nominal standard weight of 1,500 Pounds each, in Seller's molds and marked in accordance with P1020A specifications. OTHER QUALITY REQUIREMENTS: 1. Each Sow and each sow shall be skimmed and poured so that the surface is free of surface and/or entrained salts, excessive skim, surface contamination, corrosion, or seams and folds caused by multiple pours. 2. Buyer shall cast Sows and/or sows for Seller with the same care and to the same standards it uses in casting sows for its own use. 3. Each Sow and sow shall clearly display the heat number on its side. 4. Every shipment shall be accompanied by chemical analysis for each heat. Each shipment shall be accompanied with a sample button for each heat. 5. Each Sow and sow shall be poured level so it can be stacked properly. 6. There will be no excessive splashing on the sides of Sows or sows. 4 EX-2.4 5 SHARED FACILITIES AND SERVICES AGREEMENT 1 Exhibit 2.4 AMENDED AND RESTATED SHARED FACILITIES AND SERVICES AGREEMENT AGREEMENT ("Agreement"), made this 20th day of September 1999 by and between Century Aluminum of West Virginia, Inc. ("Century"), and Pechiney Rolled Products LLC ("Pechiney"). WHEREAS Century owns and operates a reduction facility, a casting house, a multi-purpose rolling mill and related assets and property in Ravenswood, West Virginia (collectively, the "Ravenswood Complex"); WHEREAS the various components of the Ravenswood Complex have been operated by Century as a single integrated facility; WHEREAS the Ravenswood Complex will be divided into two separately operated and managed facilities, to be known as the Pechiney Site and the Century Site (each a "Site"); WHEREAS Century Aluminum Company, Century and Pechiney have entered into a Stock and Asset Purchase Agreement dated July 26, 1999 (the "Purchase Agreement"), pursuant to which Pechiney has agreed to acquire the Pechiney Site; WHEREAS there are certain services, facilities and related physical assets that will be shared between the two Sites and the parties provided therefor in the Shared Facilities and Services Agreement dated as of July 26, 1999 (the "July Agreement"), and WHEREAS, the committee established pursuant to the July Agreement has met and the parties have determined as a result thereof that it is in their best interest to amend and restate the July Agreement in its entirety to reflect the recommendations of that committee. NOW THEREFORE, in consideration of one dollar and other valuable consideration and in consideration of the mutual covenants herein contained, the parties do hereby agree as follows: The July Agreement is amended and restated to read in its entirety as follows: 1. Division of Premises. Pursuant to the Purchase Agreement, a division of the Ravenswood Complex has been agreed upon by Century and Pechiney as shown on the site plan entitled Survey of Century Aluminum of West Virginia Operating Fabrication Plant located in Union District of Jackson County on the waters of the Ohio River, State of West Virginia, prepared by Point Surveying and Mapping, Delbert F. Bratcher W.V.P.S. No. 867 and dated May 18, 1999, revised September 17, 1999, which has been duplicated and recorded in the Jackson County Registry of Deeds. A reduced photocopy of such plan is attached hereto as Exhibit A. The parties shall cooperate with each other in taking such other action as is necessary in dividing the Ravenswood Complex in a way that results in compliance with existing zoning, land use, environmental and similar laws and regulations and (b) seeking such permits, variances and changes to such existing laws and regulations as are necessary to accomplish such division. 2 2. [Intentionally left blank] 3. Shared Services. Set forth in Exhibit B hereto is a list of shared services and facilities that will be utilized by each of the Century Site and the Pechiney Site (the "Facilities") in the normal course of operations, and the services to be provided by the Facilities and certain human services departments (each a "Shared Service") of Pechiney or Century, as owner of a Facility, to Pechiney or Century, as the case may be, with respect to such Facility. Exhibit B further specifies the owner and manager of each Facility. Annex A to Exhibit B describes the Facilities, shared services, and the allocations of responsibilities and costs agreed with respect thereto, and Annex A to Exhibit B is incorporated herein in its entirety and made a part of this Agreement. Attached as Exhibits C, D, E, F, G and H hereto are agreements between the parties to more fully effect certain of the agreed allocations described in Annex A and other matters relating to the Shared Services (the "Further Agreements"). 4. Limitations. (a) Except as specifically provided in (x) this Agreement (including Exhibit B), or (y) any Further Agreement, this Agreement does not and shall not be deemed to constitute a lease or a conveyance of any real property or premises, or to confer upon any party any right, title, estate or interest in the Ravenswood Complex or any part thereof, including any equipment or other assets. (b) Except as otherwise expressly provided in (y) this Agreement (including Exhibit B), or (y) any Further Agreement, no party shall permit the whole or any portion of a Facility owned by the other party to be occupied or utilized by any other person or entity, other than its officers, directors and employees in the performance of their duties in the ordinary course of business and operation of the Century Site and the Pechiney Site, as the case may be. 5. Committee. Promptly upon execution of this Agreement, the parties will appoint a committee ("Committee"), composed of not more than four representatives consisting of two representatives selected by Century and two representatives selected by Pechiney, the function of which is to: (a) establish the contingency guidelines provided for in Section 10(e) hereof; (b) make recommendations regarding the Shared Facilities and Shared Services to the extent contemplated in Annex A to Exhibit B; and (c) make recommendations regarding such other items as shall be referred to it by the parties. The Committee shall not have the right or power to bind the parties hereto, but shall forward its recommendations for consideration by the parties promptly upon completion. The Committee shall complete its activities within ninety (90) days from the date hereof, subject to extension of such period by the parties hereto. 6. Easements. On the date hereof, the parties hereto granted to each other certain easements as contemplated in the July Agreement and as set forth in further detail in the 3 Reciprocal Easement Agreement attached hereto as Exhibit H (the "Reciprocal Easement Agreement"). 7. Standards; Payment. Unless otherwise expressly provided in this Agreement, or in a Further Agreement, the following shall apply from and after the Closing with respect to all Shared Services provided pursuant to this Agreement: (a) A party obligated to perform a service under this Agreement shall do so using standards of care and levels and manner of performance consistent with good industry practice. All Facilities to be operated by either party shall be operated and maintained in a manner consistent with the obligations of that party to perform hereunder and so as not to discriminate against the other party hereto. Unless otherwise agreed, all costs and expenses of operating and maintaining a Facility shall be paid by the party owning that Facility, subject to allocations and reimbursements as provided herein or in any Further Agreement. Each party shall perform its obligations with respect to a Shared Service without undue delay and shall keep its respective equipment and Facilities which are necessary or useful to the performance of its obligations in good working condition. (b) (i) Except as otherwise specifically provided herein or in any Further Agreement, all Shared Services shall be provided for an amount equal to the providing party's Direct Costs for providing such Shared Service. Direct Costs shall include, without limitation, wages and employee benefits of personnel that are directly providing the Shared Service, as well as actual supply, maintenance and other expenses of the providing party incurred in providing the Shared Service and any and all other costs which are directly generated by, and related to, the operation and maintenance of the relevant Facility and the provision of the Shared Service ("Direct Costs"). Direct Costs shall not include depreciation expense. (ii) Except as otherwise specified herein or in any Further Agreement, Direct Costs shall be allocated to the recipient of the Shared Service based upon such recipient's actual usage. (c) Each party shall render to the other a monthly statement for amounts due for Shared Services or in any Further Agreement for the immediately preceding calendar month, setting forth in reasonable detail the services provided and Facilities used and the Direct Costs thereof. The recipient shall pay the provider the invoiced amount in immediately available funds within thirty (30) days after delivery of the invoice. Payments due on a day other than a business day shall be made on the next succeeding business day. Amounts due from Pechiney to Century, and from Century to Pechiney, hereunder or under the Further Agreements, may be netted or set off one against the other. (d) If an error is made in the calculation of any amount payable by the recipient under this Agreement or in any Further Agreement, the invoice to such recipient for the month immediately succeeding the month in which such error was finally determined shall be increased or decreased, as the case may be, by an amount equal to the amount of such overpayment or underpayment, as the case may be. 4 (e) If a party disputes the amount of any charge, notwithstanding the provisions of Section 15 hereof, it shall pay the undisputed amounts and shall set forth in writing those amounts to which it objects with a reasonably detailed explanation of the basis for its objections. The parties shall act in good faith and promptly resolve any such disputed amounts. Any such dispute not so resolved shall be subject to the provisions of Section 15 hereof. (f) Notwithstanding any other provision of this Agreement or in any Further Agreement, interest shall accrue on any overdue amount payable thereunder at a rate equal to one and one-half percent (1-1/2%) per month, prorated for the number of days such overdue amounts are outstanding. (g) Each party shall provide the other with such reasonable information as the other may request to review and confirm the accuracy of the monthly statements provided under Section 7(c) above. Each party shall keep complete and accurate books and records of account relating to the cost of Shared Services in accordance with Section 13(b) hereof. (h) The recipient shall pay to the provider for each Shared Service that is the subject of any sales or use tax imposed by any Governmental Authority (as defined in Section 20), within fifteen (15) days after demand therefor, an amount equal to the recipient's pro rata portion of the aggregate amount of such sales and use taxes. Notwithstanding the foregoing, the recipient shall use reasonable efforts to provide exemption certificates where available and to calculate any applicable sales and use taxes and to make payment thereof directly to the appropriate taxing authority. 8. Term and Termination. (a) Unless otherwise provided herein or in a Further Agreement with respect to a specific Shared Service, this Agreement shall have a term of eight (8) years commencing the date hereof with respect to each Shared Service, provided that either party shall be entitled to extend the term of this Agreement for one (1) additional term of eight (8) years with respect to each Shared Service, upon notice thereof to the other given not less than six (6) months prior to the expiration of the initial term. (b) Unless otherwise provided herein or in a Further Agreement with respect to a specific Shared Service, each of Century and Pechiney may, at any time, terminate this Agreement as to any specific Shared Service it is the recipient of hereunder on not less than six (6) months' prior written notice to the providing party, unless such providing party is also a recipient of such Shared Service and such cancellation would have the effect of depriving the provider of the use or benefit of such Shared Service; provided, however, for purposes of this Section 8, the loss or reduction of financial support alone shall not be deemed to deprive the provider of the use or benefit of the Shared Service. (c) Except as otherwise provided herein or in a Further Agreement, either party may terminate this Agreement as to any specific Shared Service on not less than six (6) months' prior written notice if the non-terminating party has not used such Shared Service during the twelve (12) months immediately prior to the date of such notice. Termination of a specific Shared Service shall become effective only upon receipt by the terminating party of a written consent to such termination, which consent shall not be unreasonably delayed or denied. 5 (d) This Agreement may be terminated with respect to any specific Shared Service but solely with respect to such Shared Service at the option of: (i) the recipient thereof, if the provider thereof fails to supply the Shared Service in question or to perform in accordance with the terms of this Agreement or any Further Agreement relating to such Shared Service any other material term, covenant or agreement contained in this Agreement or such Further Agreement on its part to be performed or observed with respect to such Shared Service, if such failure shall remain unremedied for sixty (60) days after notice thereof shall have been given by the recipient or, if the failure is of a type that cannot reasonably be cured within sixty (60) days, failure to initiate within such sixty (60) day period such action as reasonably can be taken toward curing the same and/or failure to prosecute such action as promptly as is reasonably possible after such action is initiated; or (ii) the provider thereof, if the recipient thereof shall fail to pay to the provider any amount due to the provider hereunder with respect to the Shared Service in question, when the same becomes due and payable under this Agreement, and any such failure shall remain unremedied for a period of thirty (30) days after notice thereof shall have been given by the provider to the recipient. The foregoing termination rights set forth in 8(d)(i) and 8(d)(ii) shall be in addition to all other rights and remedies that the non-breaching party may have against the breaching party with respect to such Shared Service under this Agreement. (e) Upon the discontinuation or termination of a Shared Service hereunder, this Agreement shall be of no further force and effect for such Shared Service except as to obligations accrued prior to the date of discontinuation or termination. The party providing the Shared Service shall, within thirty (30) days after discontinuation or termination of a Shared Service, deliver to the other Party all property of the other party in the possession of the servicing party, including, but not limited to, all books, records, contracts, leases, receipts for deposits, and all other papers or documents which are maintained by the servicing party and which pertain solely to providing such service to the benefiting party. In addition, the servicing party shall furnish to the benefiting party all such information and take all such other actions as the benefiting party shall reasonably require to effectuate an orderly and systematic transfer of the servicing party's duties and activities, provided that the reasonable costs of the same shall be properly reimbursed to the servicing party by the benefiting party with respect to the Shared Service. 9. Level of Services. Subject to the terms and conditions of this Agreement or any Further Agreement, services provided with respect to a Shared Service shall be as follows: (a) The party providing a Shared Service to the other party, through its employees, agents, contractors or independent third parties, shall provide to the other party the basic level of service reasonably necessary to perform the tasks specified for such Shared Service. At all times during the performance of Shared Services, all persons performing Shared Services who shall be in the employ and/or under the control of the party providing the service (including agents, temporary employees and consultants) shall be construed as being independent 6 from the benefiting party and not as employees of the benefiting party and shall not be entitled to any payment, benefit or perquisite directly from the benefiting party on account of such services. (b) The servicing party shall not be required to perform services hereunder, or under a Further Agreement that conflict with any applicable legal requirement. (c) The benefiting party shall provide timely decisions and reasonable written policy guidelines as required for the performance of Shared Services by the party providing a Shared Service to the benefiting party. (d) From time to time, a party may desire services in excess of the level of basic Shared Services that may have been agreed to by the parties. A party shall have the right to request such services by providing the other party with written notice ("Requested Services"); provided, however, that no such request relating to services provided for in a Further Agreement may be made except as provided in such Further Agreement. To the extent that it can reasonably do so, the servicing party shall provide the Requested Services on the basis requested by the benefiting party and for a fee agreed upon by the parties pursuant to the terms and conditions of this Agreement or any Further Agreement. (e) In the event that a servicing party shall deem it necessary in the performance of a service hereunder or under a Further Agreement to obtain the services of any third party or to obtain additional leased equipment or other facilities in connection therewith, that will result in an additional cost to the benefiting party, the servicing party shall obtain the written approval of the benefiting party prior to obtaining any such third party services or additional leased equipment or other facilities. Each of the parties agrees that any such third party agreement shall be terminable upon written request by the benefiting party subject to any outstanding commitments. The cost of such additional third party services and/or additional equipment and facilities shall be billed to and paid for by the benefiting party in the manner set forth in Section 7 hereof, or in a Further Agreement. Notwithstanding the foregoing, the prior written approval shall not be required in cases of emergency where the failure to obtain such third party services or equipment or other facilities, in the best judgment of the servicing party, will cause economic harm to the benefiting party in excess of the cost to be incurred in obtaining such third party services and/or additional equipment. Oral or written notice and an estimate of the costs shall be provided to the benefiting party within twenty-four (24) hours after an emergency. 10. Force Majeure. (a) Upon the occurrence and during the continuance of an Event of Force Majeure (as defined in Section 20), the obligation of a party to provide one or more Shared Services or the obligation of a party to accept one or more Shared Services, as the case may be, shall be temporarily suspended; provided, however, that: (i) such suspension shall relate solely to that portion of the Shared Services that the party seeking to rely on such Event of Force Majeure is unable to perform or accept, as the case may be; and (ii) such suspension shall be in effect only for such period during which such Event of Force Majeure shall be continuing. If such Event of Force Majeure results in a partial rather than a total inability on the part of the provider to perform or the recipient to receive the Shared Service, the recipient or the provider, 7 respectively, shall be entitled to receive or provide the pro rata portion of any available quantity or level of such Shared Service. (b) Upon the occurrence of an Event of Force Majeure, the party claiming such event shall provide prompt written notice to the other party that specifically describes the circumstances causing the Event of Force Majeure, the Facilities affected by such Event of Force Majeure and the Shared Services suspended on account of each Event of Force Majeure, provided that any failure to provide such notice shall not affect the rights of the party claiming such event except to the extent that the other party has suffered actual prejudice thereby. (c) If an Event of Force Majeure prevents a party from fully performing its obligations under this Agreement or a Further Agreement, such party shall diligently attempt to remove the cause of its inability to perform fully and shall keep the other party advised on a regular basis of its progress in removing the cause of its inability to perform fully its obligations hereunder. (d) Upon the occurrence and during the continuance of an Event of Force Majeure, the recipient of a Shared Service which is affected by such Event of Force Majeure shall be entitled to obtain substitute services or facilities on a temporary basis. If an Event of Force Majeure continues for not less than sixty (60) days, the recipient may elect to obtain any substitute service or facility on a permanent basis, and if such election is made, then on the later of: (i) the thirtieth (30th) day after the date on which the recipient notifies the provider that it intends to exercise its right to obtain permanent substitute services or facilities, and (ii) any date of termination specified in such notice, the provider will have no further obligation to provide and the recipient shall have no further obligation to accept such Shared Services and all costs associated with such Shared Services shall cease to accrue; provided, however, that if the provider also is a recipient of the Shared Service in question and such cancellation would have the effect of depriving the provider of the use or benefit of such Shared Service, then the recipient shall only be entitled to obtain substitute services or facilities on a permanent basis after receiving the prior written consent of the provider, which consent shall not be unreasonably withheld. (e) In the event that a party which is providing a Shared Service pursuant to the terms of this Agreement or a Further Agreement becomes unable to operate the relevant Facility and provide such Shared Service due to a work stoppage or other Event of Force Majeure (an "Interruption"), the other party shall have the right to assume operation of the affected Facility for so long as the party otherwise responsible for providing the Shared Service shall remain unable to operate the relevant Facility, provided such assumption of operation shall not have material adverse consequences to the affected provider. The Committee shall establish contingency guidelines applicable to an Interruption with respect to the Shared Services which will set forth the procedures pursuant to which the employees of the other party will operate the affected Facility during the Interruption. To that effect, a party will provide to employees of the other party training and access to information sufficient to allow such employees to operate the Facilities providing Shared Services safely and efficiently during an Interruption. The parties hereby undertake to use commercially reasonable efforts in the event of an Interruption to allow the employees of the other to operate an affected Facility or Shared Service. 8 (f) The parties hereto acknowledge and agree that, absent the provisions of Section 10(e) they would not have entered into this Agreement and that irreparable damage may occur in the event that such provisions are not performed in accordance with their terms. The parties hereto agree that each party shall be entitled, in addition to any other remedy at law or in equity, to equitable relief, including injunctive relief and specific performance of the terms of such provisions, in the event of a breach by the other party of any of the provisions of any of such sections. 11. Temporary Suspension of Shared Services for Repairs and Improvements. (a) To allow the party that owns a Facility and provides a Shared Service to maintain and/or make necessary repairs or improvements to the Facility, such party may elect to reduce, interrupt, allocate, alter or change (each activity a "Change") the relevant Shared Services that it is required to provide under this Agreement or a Further Agreement, provided that: (i) The party desiring to make the Change shall give notice of such action, describing in reasonable detail such Change and the reasons therefor, to the other party, pursuant to Section 19(h) hereof; and (ii) The party that is the recipient of the Shared Service in question provides prior written consent for the Change, which consent shall not be denied unreasonably. Prior written consent shall not be required with respect to Changes that are (x) required by any applicable law, rule, regulation or Governmental Order (as defined in Section 20), or (y) in the reasonable opinion of the party effecting the Change, required to preserve the safety or environmental standards at the relevant Site or Facility or required by any other contractual undertakings in existence on the date of the Closing to which such party is subject. (b) Except as the parties may otherwise agree in writing, a party that desires to undertake a Change, as described in Section 11(a) hereof, shall be responsible for any costs associated with effecting the change; provided, however, that (i) a portion of the costs of any Change which shall be required by any applicable law, rule, regulation or Governmental Order or required to preserve safety or environmental standards as provided for in Section 11(a)(ii)(x) and (y) above shall be allocated to the party receiving the relevant Shared Service pro rata to its usage of the relevant Facility, and (ii) this Section 11(b) shall not apply to costs related to activities that are part of a standard periodic maintenance program. In the event of an inconsistency in application between the provisions of this Section 11(b) and of Section 12(b), the provisions of Section 12(b) shall govern. (c) The party undertaking any Change described in Section 11(a) hereof shall use all reasonable efforts to allocate the effects of such Change in a manner so that each party receives its pro rata portion of any available quantity or level of any affected Shared Service. (d) Upon the occurrence and during the continuance of any Change referred to in this Section 11, the parties shall cooperate to attempt to arrange for Shared Services to be furnished in an alternate manner, to minimize or reduce the effect on their operations of such Change of a Shared Service, and to otherwise engage in a course of conduct intended to enable 9 the provider thereof to provide and the recipient thereof to receive the suspended Shared Service, in each case without imposing any obligations on either party in addition to those otherwise imposed by this Agreement or a Further Agreement as may be the case, including, without limitation, obligations that would increase the costs that are to be borne by the parties. 12. Alteration of Facilities. (a) Except as provided herein, or in a Further Agreement, no party shall make any alteration to its Site or to any Facility without prior written consent of the other party if such alteration would materially adversely affect such party's ability to provide Shared Services to such other party on the terms and conditions of this Agreement or a Further Agreement or that would materially increase the amounts that are payable by such other party in connection with Shared Services; provided that the restrictions of this Section 12(a) shall not apply to any alteration: (i) that is required by any law, rule, regulation or Governmental Order; (ii) that, in the reasonable opinion of the party making the alteration, is required to preserve safety or environmental standards at the Site or Facility or is required by any other contractual undertakings in existence on the date of the Closing to which the party making the alteration is subject; or (iii) if the amounts that are payable by such other party in connection with Shared Services provided to such other party would not be materially increased as a result of such alteration. (b) Should a party determine that alterations and/or improvements are needed or desirable on a Facility, then such party shall notify in writing the other party, specifying the nature and scope of the work to be performed and the reason therefor. Costs for such alterations and/or improvements will be borne by the demanding party, unless (i) the alterations or improvements are required in order to maintain the then-existing capabilities of the relevant Facility, in which case the costs shall be allocated among the parties pro rata according to their usage of the relevant Facility, (ii) the non-demanding party agrees to pay a portion of such costs, in which case such non-demanding party shall be entitled to receive such portion of the benefits of the alteration and/or improvement as corresponds to its portion of the costs, or (iii) the work to be performed is required by, or for compliance with, any law, rule, regulation or Governmental Order, in which case the parties shall share the costs of such alteration and/or improvement pro rata according to their usage of the relevant Facility. 13. Additional Covenants. (a) Inspection, Access and Testing. At scheduled times and intervals to be agreed upon by the parties, each of Century and Pechiney shall: (i) permit either the other party or, at such other party's option, independent public accountants mutually acceptable to the parties, to inspect the books and records of such other party relating to the Shared Services furnished pursuant to this Agreement, provided that such inspection and audit shall be conducted for the sole purpose of determining whether the costs charged have been assessed in accordance with the terms of this Agreement and the Further Agreements, and the cost of such inspection shall be borne by the requesting party; and (ii) permit the other party or any of such other party's agents or representatives to visit its Site in order to: (A) consult with those agents of the requested party 10 designated by such party regarding Shared Services to be provided hereunder and the Further Agreements, and (B) require that meter calibration and/or other tests be conducted to verify the accuracy of equipment used to determine the quantity or quality of Shared Services provided hereunder and the Further Agreements, provided that: (y) no party shall be entitled to require meter calibration and/or other tests permitted by clause (B) above any more frequently than every thirty (30) days; and (z) each party shall cause its employees, agents and representatives to comply with all of the other party's rules and regulations pertaining to security, safety and property protection and follow the route or routes designated by such party. (b) Books and Records. Each party shall keep proper books of record and account, in which full and correct entries shall be made of all financial transactions related to Shared Services and the performance of its obligations under this Agreement and the Further Agreements, including, without limitation, recording the levels or quantities of Shared Services provided by or on behalf of that party to the other party under this Agreement and the Further Agreements, the costs and expenses associated therewith and amounts paid by or on behalf of such party. In addition to the obligations set forth in Section 13(a), each party shall make such books and records available to the other party for inspection upon reasonable request. (c) Authorizations and Permits. (i) Except as otherwise specified herein, each party shall maintain in full force and effect all authorizations, waivers, consents, permits (including all Environmental Permits (as defined in Section 20)), orders and approvals and make or cause to be made all registrations, filings, permit modifications or transfers (including any Environmental Permit modifications or transfers) and notices with or to all third parties and Governmental Authorities necessary or appropriate for such party to provide the Shared Services with respect to which it is the provider and to maintain all Facilities owned by it; and (ii) with respect to such authorizations, waivers, consents, permits, orders and approvals that will materially affect the manner in which a party operates its Site, such party shall consult with and allow the other to participate in discussions with any Governmental Authority or third party regarding compliance with any such authorizations, waivers, consents, permits, orders or approvals and in the making of any such registration, filing, permit transfer or notice now or hereafter in effect or to obtain, modify or renew any such authorizations, waivers, consents, permits, orders or approvals. 14. Reporting. Each party shall furnish to the other party: (a) promptly, and in any event (except for emergency situations or Events of Force Majeure) not later than thirty (30) days prior to the commencement of a suspension or a reduction of a Shared Service, a statement describing the nature, extent, effect and the anticipated duration of such suspension or reduction of Shared Service; (b) promptly upon receipt thereof, copies of any statement or report to or notice from any Governmental Authority or third party that relates to any authorization, waiver, consent, permit (including any Environmental Permit), order or approval that relates to any Shared Service to be provided by or on behalf of such party and that materially affects the manner in which the other operates its Site; 11 (c) promptly upon becoming aware thereof, notice of any event or occurrence that results in any noncompliance by it with any applicable law, rule, regulation, permit or authorization including, without limitation, any Environmental Law or Environmental Permit insofar as such noncompliance will adversely affect any Shared Service to be provided by or on behalf of it to the other party or the performance of any of its other obligations under this Agreement; (d) within a reasonable period after becoming aware thereof, notice of any event or contingency that may significantly increase the other party's share of costs under this Agreement and any proposals to avoid or reduce such cost increase; and (e) promptly, and in any event not later than three (3) business days prior thereto, notice of the date and time of all meter calibrations or other tests conducted to verify the accuracy of the equipment used to determine the quality, quantity or level of Shared Services. 15. Dispute Resolution. (a) In the event that any dispute, claim or controversy shall arise as to whether either party hereto shall have fulfilled its respective obligations under this Agreement or a Further Agreement, the parties agree that within five (5) days after notification thereof authorized representatives of the parties shall meet to resolve such dispute, claim or controversy. If, within ten (10) days after the authorized representatives first began such meetings the parties have not agreed to a resolution, a Pechiney representative and a Century representative (other than, in the case of each party, the aforementioned authorized representatives) shall meet within five (5) days to resolve such dispute, claim or controversy. If, within ten (10) days after such designated representatives first began such meetings, the parties have not reached agreement, the dispute, claim or controversy shall be determined in the manner set forth in Section 15(b) hereof. (b) If, within five (5) business days after the date referred to in the last sentence of Section 15(a) hereof the dispute, claim or controversy in question remains unresolved, such dispute, claim or controversy shall be finally resolved by arbitration by three arbitrators in New York City pursuant to the Rules of Conciliation and Arbitration of the International Chamber of Commerce, and any award rendered by an arbitral panel in accordance therewith shall be final and binding on the parties and nonappealable. By execution of this Agreement each of the parties consents to the jurisdiction of such arbitral panel for itself and in respect of its properties. Any costs of the proceedings described in this Section 15(b) shall be borne by the parties equally. (c) Notwithstanding the other provisions of this Section 15, if a Further Agreement establishes a dispute resolution procedure, such procedure shall be used by the parties to resolve any dispute, claim or controversy between them which arises solely under such Further Agreement. If a dispute, claim or controversy arises under both this Agreement and a Further Agreement, the provisions of this Section 15 shall apply thereto. 16. Liability Generally. Neither party shall be responsible for special or consequential or incidental damages (including lost profits) of the other party arising out of such party's performance or non-performance of this Agreement or a Further Agreement, provided 12 that nothing herein shall limit a party's liability for damages (other than the exclusion of special, consequential or incidental damages), including costs of repair and remediation, to its or the other party's Site. Each party shall use all reasonable efforts to minimize its damages caused by the other party. 17. Indemnification. (a) Subject to the limitations set forth in Section 16 and Sections 17(c) and (d) below, Century hereby agrees to indemnify, hold harmless and defend Pechiney and Pechiney's Affiliates against and in respect of any and all Losses (including reasonable attorneys' fees and litigation expenses) incurred by Pechiney and Pechiney's Affiliates caused by or arising from (i) acts of Century in connection with the performance of (or failure to perform) any of Century's obligations under this Agreement and the Further Agreements that would constitute negligence, recklessness or willful misconduct of Century and (ii) any condition, event or act caused or contributed to by Century at or affecting a Facility owned by Pechiney. (b) Subject to the limitations set forth in Section 16 and Sections 17(c) and (d) below, Pechiney hereby agrees to indemnify, hold harmless and defend Century and Century's Affiliates against and in respect of any and all Losses (including reasonable attorneys' fees and litigation expenses) incurred by Century and Century's Affiliates caused by or arising from (i) acts of Pechiney in connection with the performance of (or failure to perform) any of Pechiney's obligations under this Agreement and the Further Agreements that would constitute negligence (or, in the case of the provision of fire protection, security and alarm services, as provided for in Section 17 of Annex A to Exhibit B hereto, gross negligence), recklessness or willful misconduct of Pechiney and (ii) any condition, event or act caused or contributed to by Pechiney at or affecting a Facility owned by Century. (c) A party seeking indemnification pursuant to this Section 17 (the "Indemnified Party") shall give prompt notice to the party from whom such indemnification is sought (the "Indemnifying Party") of the assertion of any claim, or the commencement of any action, suit or proceeding, in respect of which indemnity may be sought hereunder, and will give the Indemnifying Party such information with respect thereto as the Indemnifying Party may reasonably request, but failure to give such notice shall not relieve the Indemnifying Party of any liability hereunder, except to the extent that the Indemnifying Party has suffered actual prejudice thereby. The Indemnifying Party shall have the right to undertake the defense of any such claim asserted by a third party and the Indemnified Party shall cooperate in such defense and make available all records and materials requested by the Indemnifying Party in connection therewith at the Indemnifying Party's expense. The Indemnified Party shall be entitled to participate in such defense, but shall not be entitled to indemnification with respect to the costs and expenses of such defense if the Indemnifying Party shall have assumed the defense of the claim with counsel reasonably satisfactory to the Indemnified Party. The Indemnifying Party shall not be liable for any claim settled without its consent, which consent shall not be unreasonably withheld or delayed. The Indemnifying Party may settle and claim without the consent of the Indemnified Party, but only if the settlement involves solely monetary damages. (d) No owner of a Site shall be responsible for Losses suffered by the other party or its Affiliates or their officers, directors, employees or agents arising out of or in 13 connection with Shared Services provided on such owner's Site, except to the extent (but subject to Section 16) such Losses resulted from the negligence, recklessness or willful misconduct of the owner of such Site. 18. Insurance. During the term of this Agreement, each of Century and Pechiney shall, at its own cost and expense: (a) provide and keep in force commercial general liability insurance against liability for death, personal injury and property damage in amounts, including without limitation in respect of injuries to any one person and injuries from any one occurrence and in respect of property damage from any one occurrence that are no less than those customarily maintained by companies similarly situated to the parties in respect of their operation of facilities similar to the Sites. (b) provide and keep in force insurance providing against loss by fire, lightning, the perils of extended coverage and malicious mischief covering its assets at the Ravenswood Complex and any other alterations, improvements, equipment, furnishings, fixtures, property and contents on its Site (collectively, "Insured Property"), in amounts that are no less than those customarily maintained by companies similarly situated to the parties in respect of their operation of facilities similar to the Sites. Each of Century and Pechiney shall cause each policy carried by it insuring, as to itself, its Site and Insured Property against loss, damage, or destruction by fire or other casualty, to be written in a manner so as to provide that the insurance company waives all rights of recovery by way of subrogation against Century or Pechiney, as the case may be, in connection with any loss or damage covered by any such policy. All policies of insurance required hereunder shall be written and signed by solvent and responsible insurance companies reasonably satisfactory to the parties. Unless otherwise provided herein, certificates of insurance for insurance coverages required hereunder shall be deposited with the parties prior to occupancy of any Facility. Not less than fifteen (15) days prior to the expiration dates of said insurance coverages, renewal certificates shall be deposited with the parties. If a party fails to deposit with the other any certificate of insurance required hereunder, after thirty (30) days advance notice and prior to the provision of such certificate, such other party may, at its option, obtain the insurance coverages in respect of which the required policy or certificate was not provided, at the expense of the breaching party, and the cost thereof shall be paid to the non-breaching party upon written demand. 14 19. Miscellaneous. (a) Assignment. No party may assign or delegate this Agreement, any Further Agreement or the rights and obligations created hereunder and thereunder without the prior written consent of the other, whether by way of transfer, merger with or into such party, consolidation, reorganization or otherwise, except in connection with a sale or transfer of the assigning party's entire interest in its Site, in which event such assignment of this Agreement and any Further Agreement then in effect to the transferee of the property shall be required. Any purported assignment without such consent shall be void and shall constitute a breach of this Agreement. Upon the sale or conveyance of all or any portion of a Site, the Site owner shall cause the purchaser or transferee to expressly assume the obligations of the Site owner hereunder in respect of the agreements made herein. Subject to the foregoing, all of the terms and provisions of this Agreement and Further Agreements shall be binding upon, and inure to the benefit of, and shall be enforceable by, the respective successors and assigns of the parties hereto. (b) Waiver. No failure or delay on the part of either party in the exercise of any power, right or privilege arising hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. (c) Severability. If any provision of this Agreement is for any reason found to be ineffective, unenforceable or illegal, such condition shall not affect the validity or enforceability of any of the remaining portions hereof; provided, further, that the parties shall negotiate in good faith to replace any ineffective, unenforceable or illegal provision with an effective replacement as soon as is practical. (d) Multiple Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together constitute one and the same instrument. (e) No Partnership or Agency Created. Nothing contained herein or done in pursuance of this Agreement or any Further Agreement shall constitute the parties as entering upon a joint venture or partnership, or shall constitute either party the agent for the other party for any purpose or in any sense whatsoever. Neither party shall hold itself out to any third party as a partner or agent of the other party hereto contrary to the terms of this Section and neither party shall be or become liable for any representation, act or omission of the other party which is contrary to the terms of this Section. (f) Choice of Law. This Agreement shall be construed in accordance with and governed by the laws of the State of New York, without reference to the conflict of laws provisions thereof. 15 (g) Effect of Headings. The headings of the sections and subsections contained herein are for convenience of reference only and are not intended to be and shall not be construed as part of or to affect the meaning or interpretation of this Agreement. (h) Notices. All notices, requests, demands and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by telecopy, electronic or digital transmission method; two business days after it is sent, if sent for expedited delivery by recognized international delivery services (e.g., Federal Express); and upon receipt, if sent by certified or registered mail, return receipt requested. In each case notice shall be sent to: If to Century, addressed to: 2511 Garden Road Building A, Suite 200 Monterey, CA 93940 Attention: Gerald J. Kitchen, Esq. Executive Vice President, General Counsel and Chief Administrative Officer Tel: (831) 642-9300 Fax: (831) 642-9328 With a copy to the manager of the Reduction Plant at the Ravenswood. Site. If to Pechiney, addressed to: Pechiney Rolled Products, LLC 8770 West Bryn Mawr Avenue Chicago, IL 60631 Attention: Eileen Burns Lerum, Esq. Tel: (773) 399-8695 Fax: (773) 399-3527 With a copy to the manager of the Fabrication Plant at the Ravenswood Site. or to such other place and with such other copies as such party may designate as to itself by written notice to the others. (i) Entire Agreement; Controlling Documents. This Agreement is intended to be a complete and integrated agreement with respect to the subject matter thereof, superseding all prior agreements (except for the Purchase Agreement and the Ravenswood Indemnity Agreement (as defined in the Purchase Agreement)) and understandings with respect thereto. This Agreement may not be amended or modified except by an instrument in writing signed by 16 the parties hereto. Any other provision of this Agreement to the contrary notwithstanding (other than Section 15(c)), in the event of any inconsistencies between any provisions of this Agreement and any of the Further Agreements, the provisions of the relevant Further Agreement shall be controlling. With respect to the provisions regarding indemnification contained in Section 17 hereof, in the event of any inconsistencies between any of such provisions and the provisions regarding indemnification set forth in the Purchase Agreement, the provisions of the Purchase Agreement shall be controlling. (j) Waiver of Jury Trial. Each party hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or any Further Agreement or the actions of any party in the negotiation, administration, performance and enforcement thereof. (k) Relationship of Parties. In all matters relating to this Agreement or any Further Agreement, both parties will be contractors and will be solely responsible for the acts of their employees, officers, directors and agents including any third parties providing Shared Services or Shared Facilities on a party's behalf. Employees, agents or contractors of a party shall not be considered employees, agents or contractors of the other party. Neither party shall have the right, power or authority to create any obligation, express or implied, on behalf of the other party. (l) Survival. Without prejudice to the survival of the other agreements of the parties hereunder, the agreements of the parties pursuant to Sections 7 (to the extent applicable), 16 and 17 hereof shall survive the termination of this Agreement. (m) Estoppel Certificate. Each party agrees to furnish to the other party within ten (10) days of the request therefor, at the request of the other party, an executed certificate signed by such party containing a list of the Shared Services and Facilities provided by such party under this Agreement that are then in effect, and confirming the accuracy of such list. (n) Business Interference. Neither party shall take any action which would violate the other's labor contracts, if any, affecting the Ravenswood Complex or its Site, or create any unreasonable building construction interruption, work stoppage, picketing, labor disruption or dispute, or take any action which is likely to interfere with the business of the other party at the Facilities without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. (o) Further Assurances. From time to time, each party agrees to execute and deliver such additional documents and to provide such additional information and assistance as the other party shall reasonably require in order to carry out the terms of this Agreement and any Further Agreement. (p) Regulations. All employees of each party when on the property of the other party in connection with this Agreement and any Further Agreement and the easements to be granted pursuant thereto and the services to be provided hereunder will conform to the rules and regulations concerning health, safety and security of such other party with respect to its Site. 17 (q) Compliance with Laws. The parties hereto shall use reasonable efforts to comply fully with all applicable requirements of law in connection with the performance of its obligations and the receipt of services hereunder and any Further Agreement. 20. Certain Definitions. As used in this Agreement, the following terms have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Affiliate" means, as to any person or entity, any other person or entity that, directly or indirectly, controls, is controlled by or is under common control with such person or entity or is a director or officer of such person or entity. For purposes of this definition, the term "control" (including the terms "controlling", "controlled by" and "under common control with") of a person or entity means the possession, direct or indirect, of the power to vote 50% or more of the voting stock of such person or entity or to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting stock, by contract or otherwise. "Environmental Law" means any federal, state or local law, statute, ordinance, rule, regulation or common law, and any legally binding judicial or administrative interpretation thereof, including any judicial or administrative order, consent order, consent decree or judgment, in each case in effect and as amended as of the date hereof or at any time while this Agreement remains in effect, regulating the generation, use, handling, transportation, treatment, storage, disposal, release or discharge of any Hazardous Material. "Environmental Permits" means all permits, approvals, regulations and other governmental consents of any Governmental Authority necessary for the use, occupancy or operation of the Sites and required by any applicable Environmental Law. "Event of Force Majeure" means, for any person or entity, any event, circumstance or condition that is beyond the control of such person or entity and that prevents such person or entity from performing, in whole or in part, its obligations under this Agreement or any Further Agreement. Without limiting the generality of the foregoing, the following occurrences shall be deemed to be Events of Force Majeure: (a) Acts of God, fire, explosion, accident, flood storm or other natural phenomenon; (b) war (whether declared or undeclared), riot, blockade, sabotage or acts of public enemies; (c) national defense requirements; (d) compliance with any law, rule, regulation or Governmental Order that (i) becomes effective after the date of the Closing and (ii) is binding on the person or entity seeking to rely on such law, rule, regulation or Governmental Order to excuse performance and such person's or entity's compliance therewith is not voluntary or optional; (e) strikes, lockouts or injunctions (it being understood that nothing herein shall require a person or entity to settle such or any other kind of labor dispute except on such terms as shall be satisfactory to such person or entity); (f) unavailability (for reasons other than the cost thereof) of adequate fuel, power, raw materials, labor or transportation facilities; and (g) breakage or failure of key machinery or key equipment. 18 "Governmental Authority" means any United States federal, state or local or any foreign government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body. "Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority. "Hazardous Material" means petroleum and petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls and any other chemicals, materials or substances, in each case and to the extent regulated under any applicable Environmental Law. "Losses" means any and all liabilities, losses, damages, claims, costs, interests, judgments, fines, amounts paid in settlement and expenses actually incurred by a party. 19 IN WITNESS WHEREOF, the parties hereto have had this Agreement executed by their respective authorized officers as of the date first written above. CENTURY ALUMINUM OF WEST VIRGINIA, INC. By: /s/ Gerald J. Kitchen ----------------------------------------- Its: Vice President ----------------------------------------- PECHINEY ROLLED PRODUCTS, LLC By: /s/ J.M. Schemm ----------------------------------------- Its: Vice President ----------------------------------------- 20 EXHIBITS A - Site Plan B - List and Description of Shared Services C - Power Subcontract D - Partial Assignment Agreement with respect to Gas Contracts E - Environmental Services Agreement F - Tank Farm Lease Agreement G - Met Tower License Agreement H - Reciprocal Easement Agreement 21 EXHIBIT A SITE PLAN 22 EXHIBIT B
SHARED SERVICE OWNER MANAGER - -------------- ----- ------- Well Water Pechiney Pechiney Fire Water Each Each Drinking Water Each Each Secondary Wastewater Treatment Century Century Steam Century Century Transmission Facility - Century Century Except Single Circuit Lines that feed Pechiney Site and Substation thereat Transmission Facility - Single Circuit Pechiney Pechiney Lines that feed Pechiney Site and Substation thereat Dust Waste Facility Pechiney Pechiney Solid Waste Facility Pechiney Pechiney Aluminum Scrap Each Each Rail lines - Century Site Century Century Rail lines - Pechiney Site Pechiney Pechiney River Dock Century Century Gas Facilities Pechiney Site Pechiney Pechiney Gas Facilities Century Site Century Century Compressed Air Each Each Stores Pechiney Pechiney (Century to construct own within 18 months) Outfalls/Blocking Wells Managed by agreement under Exhibit E Metal Analysis Lab Pechiney Pechiney Fire, Medical, Security, Alarm System Pechiney Pechiney (if and until split) Administrative Offices Pechiney Pechiney (Century to construct own within 6-12 months) Administrative Services Pechiney Pechiney (HR/Accounting/Purchasing) (Century to establish own within 3-6 months) Parking Each Each
23 Training Facility Pechiney Pechiney Janitorial Each Each Fencing-Common Shared Shared Truck Scale Pechiney Pechiney (Century to install own within 18 months) Recreation Center Century Century Shared Software As provided in Annex A
EX-99.1 6 PRESS RELEASE 1 Exhibit 99.1 PECHINEY COMPLETES PURCHASE OF CENTURY'S FABRICATION BUSINESSES Monterey, CA, September 21, 1999 - Pechiney, Century Aluminum Company and Century Aluminum of West Virginia, Inc. (CAWV) have completed the transaction for Pechiney to purchase Century's two aluminum fabrication businesses. Completion of the acquisition follows the signing of a definitive agreement on July 28 and the obtaining of standard governmental and regulatory approvals. The businesses, with revenues of $562 million in 1998, consist of: -The Rolled Products unit of CAWV at Ravenswood, West Virginia that has capacity to produce up to 600 million pounds (270,000 metric tons) of rolled aluminum products a year on some of the largest rolling equipment in the aluminum industry. The Ravenswood facility is a leading North American supplier of premium sheet and plate products for the aerospace and transportation markets. It is also a major North American producer of brazing sheet used to manufacture radiators for passenger cars and trucks. -Century's Cast Plate unit at Vernon, California that has capacity to produce 15 million pounds (7,000 metric tons) a year of cast aluminum plate in the broadest range of sizes in the world. The unit is the world's second largest producer of these products. Cast plate is used principally in the machinery and equipment market. PECHINEY 7, place du Chancelier Adenauer CENTURY 75218 Paris Cedex 16 2511 Garden Road Suite 200 Building A Contact: Monterey, CA 93940 Francois-Jose Bordonado Tel. 33-6 08 10 05 72 Contact: Catherine Paupelin A. T. Posti Tel. 33-1 56 28 25 08 Tel. 831/642-9364 Fax 33-1 56 28 33 38 Fax 831-642-9328 e-mail: investor-relations@pechiney.com e-mail: posti@centuryaluminum.com Internet: http://www.pechiney.com -----END PRIVACY-ENHANCED MESSAGE-----